Effects for global agriculture of country-specific climate policy regimes with a focus on methane

Abstract

While countries have agreed in the Paris-agreement on common rules to report GHG emissions, the design of domestic climate policy regimes remains in the national domain. This may cause different carbon prices for climate gasses across countries, between a country's emission sectors, and within the same sector. Our focus is on methane, which is a major emitter from agriculture, but also linked to livestock farming which is a core activity in agriculture worldwide. We analyse the potential effects of domestic carbon pricing regimes for agriculture in a non-cooperative game theoretic setting using a global agricultural sector model. Our results indicate no ‘race to the bottom’ to apply carbon pricing regimes that result in lowest implicit carbon prices for methane. Enforcing a uniform regime can reduce additional global warming with up to 0.02 °C, but runs the risk of agreeing to lower emission cuts than a nationally determined choice would suggest.