Greenhouse gas reduction policies and agriculture: implications for production incentives and international trade disciplines

Aug 2009

Climate change legislation is currently being discussed in the Congress of the United States of America (USA). The extent to which agriculture will be included in the provisions is still under debate. Farm groups, concerned about a rise in input prices, want to ensure that the contribution that agriculture can make towards mitigation of climate change is recognized and rewarded.
Meanwhile, the trade rules for agriculture in the World Trade Organization (WTO) are still under review in the Doha Round of trade talks. Subsidies to agriculture in industrial countries will need to be restrained if these talks reach a conclusion. It is therefore useful to consider the implications of policies designed to reduce greenhouse gas (GHG) emissions from agriculture and to enhance the role of agriculture in GHG mitigation in the context of existing and future WTO disciplines. The primary focus is on domestic policies that are likely to affect agriculture directly, although they may not be targeted exclusively at the sector.
This paper is composed of four main sections:
• a discussion of policy approaches to the reduction of GHG emissions from agricultural production and enhancement of the role of agriculture in GHG mitigation;
• an assessment of the potential implications of these policies for agricultural production incentives and for international trade;
• an analysis of the issues that may arise in the context of WTO constraints on subsidies and other rules that may influence the choice of policy instrument;
• a conclusion suggesting some of the more contentious farm policy and agricultural trade policy issues that may arise as countries pursue GHG reduction and other climate change policies.

By: D. Blandford, T. Josling (ICTSD – IPC)

 
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