Australia's consumption‐based greenhouse gas emissions

We use data from the World Input‐Output Database in a multiregional input–output model to analyse Australian consumption‐based greenhouse gas emissions for the years 1995 to 2009. We find that the emission content of Australian macroeconomic activity has changed over the 15‐year period. Consumption‐based emissions have been growing faster than production‐based emissions since 2001. We show that emissions embodied in Australian imports are increasingly becoming a significant source of emissions. We investigate emissions in Australian imports and find that increased trade with China contributed substantially to the increase in Australia's consumption emissions. China was the largest exporter of emissions to Australia and accounted for almost half of emissions embodied in Australian imports since 2002. The growth of trade with China coincides with the increase in imported emissions as well as the increase in aggregate consumption emissions. Our results suggest that tracking consumption emissions together with production emissions provides a more complete picture of Australian emissions.     

Trade liberalisation and greenhouse gas emissions: the case of dairying in the European Union and New Zealand*

The link between trade and the environment has aroused considerable interest both in terms of the impact of trade liberalisation on the environment, and also the impact of environmental policy on production and trade. Of key environmental concern at present is global warming and its association with greenhouse gas emissions. Agriculture is a sector of the economy that both contributes to, and will be affected by, climate change. This paper models the impact of agricultural trade liberalisation on greenhouse gas emissions from agriculture around the world, focusing particularly on the effects on New Zealand, a small economy highly dependent on agricultural trade. A partial equilibrium agricultural multicountry, multicommodity trade model is used for the analysis, extended to include physical production systems and their greenhouse gas emissions. Two simulations are performed: removal of agricultural policies in the EU and in all OECD countries. The results indicate that although producer returns in New Zealand increase, greenhouse gas emissions also increase significantly. EU producers face lower returns but also lower greenhouse gas emissions.     

Measurement of greenhouse gas emissions from agriculture: economic implications for policy and agricultural producers*

If agriculture were to be included in Australia’s carbon price scheme, a key decision for government would be how to estimate greenhouse gas emissions. We explore the consequences of three different methods for measuring on‐farm emissions: national accounting methods, an amended version of those methods and use of best‐available local data. Estimated emissions under the three methods can vary widely; for example, on a case study farm in Western Australia, local data indicated 44 per cent lower emissions than did the national accounts method. If on‐farm emissions are subject to an emissions price, the impact on farm profit is large and varies considerably with different measurement methods. For instance, if a price of $23/t of CO2‐e applies then farm profit falls by 14.4–30.8 per cent depending on the measurement method. Thus, the choice of measurement method can have large distributional consequences. On the other hand, inaccurate measurement results in relatively minor deadweight losses. On‐farm sequestration through reafforestation may lessen the impact of an emissions price on farm businesses, although it will require a high carbon price to be viable, especially if sequestration rates are underestimated or low.     

Impacts of regulating greenhouse gas emissions on livestock trade flows

Policies regulating greenhouse gas (GHG) emissions are expected to create a significant burden on emitting industries as well as final consumers, which can lead to a strong influence on international trade flows of commodities. This study examines whether the regulation of GHG emissions affects livestock trade flows. A commodity‐specific gravity model approach is employed to estimate and test the impact of regulating GHG emissions on livestock trade flows. The results show that regulation of GHG emissions has a negative effect on livestock trade flows from countries restricting GHG emissions to countries without GHG restriction, from restricting countries to restricting countries, and unrestricting countries to restricting countries.     

Tax mix change to reduce greenhouse gas emissions*

A pollution tax or emissions trading scheme places a price on greenhouse gas emissions. This price also is an additional indirect tax and a government revenue windfall. To restore distributional equity, to avoid compounding the efficiency costs of existing distorting taxes and to maintain macroeconomic stability, it is argued that most of the revenue windfall be recycled to households as lower income tax rates and higher social security payments. As the carbon price rises over time, new and larger tax mix change packages will be required.     

China's changing diet and its impacts on greenhouse gas emissions: an index decomposition analysis

With increasing awareness of agriculture's contribution to global greenhouse gases (GHGs) and China's position as the world's top GHG emitter, there is heightened attention to the embodied emissions in China's food consumption. China's diet has shifted to include more fruit, vegetables, meat and dairy. Not surprisingly, GHG emissions from food consumption have also increased substantially. This analysis links China's food consumption with the emissions of food production industries in China and its trade partners to determine the effects of dietary change on GHGs since 1989. We utilise high‐resolution food production and emissions data to perform a logarithmic mean Divisia index decomposition to attribute changes in GHG emissions to the scale, supply structure, demand structure and efficiency effects resulting from Chinese dietary changes over a 20‐year period. This study finds that while countries supplying food to China contribute little to China's food‐related GHGs, demands for meat and dairy play a much larger role, driving up emissions. The overall scale of increased consumption of all food further propels growth in GHG emissions. Results indicate, however, that while food consumption in China more than doubles between 1989 and 2009 improvements in technological efficiency limit the rate of increase.     

Impact of foreign direct investment on greenhouse gas emissions in agriculture of developing countries

This research analyses the impact of foreign direct investment on greenhouse gas emissions in the agriculture sector of developing countries. Panel data from 63 developing countries for the period 2005 to 2014 was used to estimate a dynamic econometric model by applying a system‐generalised method of moments. The empirical results indicate a positive impact of foreign direct investment in agriculture on the carbon dioxide equivalent emission intensity in developing countries. The results provide weak support for the pollution havens hypothesis and imply the importance of coordination between foreign direct investment and environmental policies.     

A detailed greenhouse gas budget for palm oil production

We have evaluated the global warming impact of palm oil production in a model that simulates the operations of a typical palm oil mill that processes fruit from a nucleus estate and outgrowers. It estimates carbon sequestration in the crop and in mill products and by-products, and balances this against the major sources of greenhouse gases (GHGs), all converted to carbon dioxide equivalents (CO₂-e) over the 25-year lifespan of the crop. The model shows that most carbon sequestration occurs in the standing crop, with smaller amounts in mill products and by-products. Land-use conversion plays a dominant role in the GHG budget, with planting of oil palm after logged forest or rubber leading to a net loss of carbon, and to a net gain following grassland. In the default oil-palm-to-oil-palm case the carbon lost from cleared palms is balanced by sequestration in the current crop. Methane from mill effluent and nitrous oxide from N fertilizers are the next most important emission sources. The default replant case gives net emissions of 0.86t CO₂-e per t crude palm oil, but these can be reduced to very low values, mainly through conversion of methane and surplus fuel in the mill to energy.     

The right place to grow rice for the Japanese market: comparative analysis of greenhouse gas emissions of rice cultivation in Japan and the United States

One consequence of increasing agricultural trade is a shift of geographic location of agricultural activity to more economically productive countries. Whether or not the economic efficiency translates to environmental efficiency for agricultural goods is an open question. To examine environmental implications of shifting agricultural location, we analysed the life-cycle greenhouse gas (GHG) emissions of rice production in Japan and the US for the Japanese market in a comparative manner. This paper presents the life-cycle assessment of brown japonica rice. Our computation of GHG emissions of rice production in Japan and the US were 3.54 and 2.99?kgCO₂-eq kg-rice^?1, respectively. With respect to harvested area, the emissions were 18.4 in Japan and 27.8?tCO₂-eq ha^?1 in the US. For Japan to be environmentally competitive with the US production, fundamental restructuration of field size is necessary to increase yield. In conclusion, economic efficiency does not translate to environmental efficiency with the case of rice production. Importing rice is both economically and environmentally viable option for the Japanese market.     

Effects of changes in forestland ownership on deforestation and urbanization and the resulting effects on greenhouse gas emissions

This study analyzes the extent to which greenhouse gas (GHG) emissions may be affected by a plan to purchase private forestland for the expansion of carbon sinks, focusing on how changes in forestland ownership affect deforestation and urbanization and how subsequent changes in deforestation and urbanization affect GHG emissions, using South Korea as a case study. The results from ex ante simulations imply that carbon dioxide equivalent emissions could increase between 17.4 and 19.2 million tons with private forestland purchases from a constrained budget of $750 million, compared with an increase of 34.5 million tons without the purchasing plan.