Mitigation technologies in the EU economic assessment of GHG mitigation policy options

for EU agriculture

EcAMPA-2 - World Outlook Conference, Amsterdam

10/06/2016

Ignacio Pérez Domínguez European Commission, Joint Research Center

2

Background

to update and give an overview of the evolution of agricultural GHG

emissions in Europe

to understand how model-calculated GHG emissions would evolve in

a reference scenario (i.e. medium-term projections to 2030)

to understand which technological mitigation options could be

applied and at which costs by EU Member States (i.e. analysis of a

mix of policy options regarding emission reduction targets,

mitigation options and technological development)

to understand whether the existing CAP budget and existing policy

instruments would be adequate to guarantee net emission reduction

in EU agriculture over the medium term (i.e. subsidies for adoption)

Motivation

Counterfactual scenarios & drivers

Emission reduction

target

Voluntary Subsidies

for adoption

Mandatory implementation of technologies

(additional)

Tech. progress

HET15 15%

HET20 20%

HET25 25%

SUBV80 20% 80%

SUBO80 20% 80% Yes *

SUBV80-noT 80%

SUBV80-TD 20% 80% ** Rapid

* For Anaerobic digestion, Variable Rate Technology and increased share of legumes on temporary grasslands ** Including Nitrate ad feed additive and vaccionation against methanogenic bacteria in rumen

Specific features:

endogenous tech. mitigation technologies (12-14)

endogenous response of tech. adoption to subsidization (ad-hoc calibration, early vs. late adopters)

dynamic representation "emission leakage" (i.e. efficiency developments)

Methodology: CAPRI

Main impacts: outline

Emissions

Prices

Supply

Technologies

Demand Trade

Leakage

Subsidies

Welfare

Sensitivity Analysis

Agricultural supply details

Cereals Beef meat

0

1

HET15

HET20

HET25

SUBV80SUBO80

SUBV80_noT

SUBV80_TD

Production Yield Herd size Max

0

1

HET15

HET20

HET25

SUBV80SUBO80

SUBV80_noT

SUBV80_TD

Production Yield Area Max

Technology adoption: share in total mitigation

* Does not include the mitigation effects from the measures related to genetic improvements (as it is not possible to disentangle the mitigation from the production effects).

HET15 HET20 HET25 SUB80V

_noT SUB80V SUB80O

SUB80V_TD

Share in total GHG reduction

Mitigation technologies* 64% 56% 47% 99% 68% 68% 77%

Change in production levels and production shifts

36% 44% 53% 1% 32% 32% 23%

* The mitigation effects linked to genetic improvement measures cannot be analysed in isolation and are added to mitigation achieved by changes in production.

Technology adoption: share in total mitigation by technology

0

10

20

30

40

50

60

70

80

90

100

Mill

ion

to

nn

es C

O2

eq

mit

igat

ed

Production effects*

Vaccination

Feed additives: nitrate

Feed addtives: linseed

Low nitrogen feed

Fallowing histosols

Rice measures

Higher legume share

Variable Rate Technology

Precision farming

Nitrogen inhibitors

Fertilizer timing

Anaerobic digestion

Agricultural producer prices

HET15 HET20 HET25 SUB80V SUB80O SUB80V_

TD

SUB80V_

noT

%-difference to REF

Cereals 1.0 1.8 3.8 1.8 1.8 0.9 0.6

Oilseeds 1.3 2.2 4.0 0.5 0.5 -1.1 -1.0

Other arable field crops 1.7 3.0 5.3 2.3 2.3 1.2 0.7

Vegetables and

Permanent crops 0.5 1.0 1.7 1.1 1.1 1.0 0.5

Beef 13.3 25.8 43.6 16.6 16.8 9.8 -1.6

Pork meat 4.4 8.7 15.4 2.7 2.8 0.6 -2.7

Sheep and goat meat 5.8 11.5 17.5 8.5 8.7 5.6 -0.6

Poultry meat 2.1 4.0 6.8 1.7 1.7 0.5 -1.0

Cow and buffalo milk 6.6 12.2 19.6 1.9 2.0 -3.1 -6.6

Sheep and goat milk 4.5 9.1 15.0 3.5 3.5 -0.3 -4.1

Eggs 2.1 4.0 6.7 2.6 2.6 1.4 0.0

Emission leakage

Emission leakage by origin

Emission leakage in meat markets

-5

0

5

10

15

20

BEEF PORK SHEEP AND GOAT

Mill

ion

CO

2 t

on

ne

s Eq

Change in ROW emissions by commodity

HET15 HET20 HET25 SUBO80 SUBv80 SUBV80TD SUBV80noT

Limitations

• Comparative static analysis (e.g. no capital investment flows, no

market disruptions, normal weather conditions)

• Cost-effectiveness of agriculture in isolation (e.g. no multiplier

effects from other non-ETS sectors)

• Limited set of technologies and still not thoroughly tested in

isolation, very limited knowledge about adoption

• Baseline: limited information (EU Outlook only to 2025), not always

a perfect fit, no explicit climate payments… but good coverage of

pillar 1 and 2 payments

• Technology transfer for leakage calculations only based on historical

trends

Thank you for your attention

ignacio.perez-dominguez@ec.europa.eu

Joint Research Centre

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