Interest in promoting a 2-price system regarding efficient abatement of CH4 and N2O emissions sourced by agriculture in the European Union
Pierre-Alain Jayet  1@  , Ancuta Isbasoiu  2@  
1 : INRAE
Institut National de la Recherche Agronomique - INRA (FRANCE)
2 : INRA
Institut National de la Recherche Agronomique - INRA (FRANCE)

The implementation of public policies designed to support agricultural greenhouse gas (GHG) emissions mitigation needs an in-depth study of a cost-effectiveness analysis of mitigation opportunities. This paper addresses the reduction of GHG emissions in the European Union from an innovative and interesting perspective that involves the dissociation of the prices of the two main gases emitted in the agricultural sector, methane and nitrous oxide, respectively. The objective is to examine the impacts of a multi-gas approach within the framework of climate policies. The starting point refers to change in relative radiative powers of the gas when considering a change in time horizon. A system of differentiated prices of the two GHGs could redefine the climate policy, offering flexibility in reducing the cost of emission abatement and taking into account the "climate urgency" which consists of being projected on a time horizon much shorter than the horizon generally used to measure the equivalence of the radiative power of gases, 100 years. The European agro-economic model AROPAj is used, given its ability to take into account all sources of agricultural GHG emissions and to conduct abatement cost estimates. Using simulations results, we estimate a 2-dimension abatement function depending on two GHG prices. We analyze the price elasticities of abatement around different levels of GHG prices. We study the combination of prices allowing an effective reduction of GHG emissions. We show that given the significant variation of the Global Warming Potential from the 100-year reference horizon to a 20-year horizon, the weight of methane will become more important in the agricultural sector, which means that its weight will increase for the entire economy with a GWP multiplied by about 3 times. Results indicate that the change of GWP according to the "climate emergency" modifies in a significant manner the abatement rate for a set of given differentiated gas prices.


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