Research

Abstract

To achieve the European bioenergy objectives, member states are likely to implement support policies targeting the use of lignocellulosic biomass for advanced bioenergy. Such policies could increase prices. In this study, we argue that with higher prices and new market opportunities for lignocellulosic biomass, farmers will account for crop residues in their choice of production and use of inputs. We test this hypothesis in an economic model of the EU agricultural supply coupled with a crop model to assess the effect of crop residue prices on residue supply, land allocation, yields, fertiliser use, and nitrogen pollution. We find that 120 million tonnes dry matter (tDM) of crop residues are co-produced when they are unpriced. The price-induced additional supply is elastic to price but limited to 8% at €100/tDM and 13% at €200/tDM of the unpriced production. However, the increase in residue prices induces farmers to increase their crop areas and yields, which leads to significantly higher fertiliser consumption and nitrous oxide emission. These results indicate to policy makers that supporting prices would not substantially increase crop residue potential but could have collateral effects on the environment. They raise issues of coordination between bioenergy and agri-environmental policies in the EU.

Reducing animal-based food production would not only reduce agricultural greenhouse gas emissions but also free land that could sequester carbon. We examine the efficiency of a subsidy to cattle farmers for setting aside land for natural ecosystem regeneration. We develop a partial equilibrium model of the cattle sector that integrates land use, greenhouse gas emissions, and animal feeding. We compare the subsidy to alternative policies: a meat tax and a standard on animal feeding. We identify conditions under which the subsidy is the best alternative to these other second-best policies. The efficiency of the subsidy lies in its effects on both the extensive margin (reduced quantity of meat) and the intensive margin (production intensification, which reduces both the emissions and land-use intensities of meat). An empirical application to France, where spontaneous regeneration corresponds mostly to forest regrowth, shows that the subsidy dominates the other alternative policies considered for a wide range of parameter values but is sensitive to carbon leakage when the economy is open to trade.

Grass-based beef cattle production systems are generally perceived as beneficial to the environment. However, the climate impact of extensive grass-based systems compared to intensive systems based on energy-dense feeds remains controversial. While extensive systems require less feed from crops, the production of which emits carbon dioxide and nitrous oxide, they generate more enteric methane emissions. Here, we provide a meta-analysis of cradle-to-farm-gate life cycle assessments of beef cattle production systems to estimate the effect of cattle diet on the carbon footprint of beef. Panel regressions indicate that every 10-percentage-point increase in grazing or hay intake at the expense of energy-dense feeds in cattle diets, based on dry matter intake, increases the carbon footprint of beef by 1 kg CO2e per kg live weight. The findings highlight trade-offs between climate goals and other objectives (e.g., biodiversity) that justify the promotion of extensive grass-based systems. 

Tax aversion often hinders the implementation of Pigouvian policies. As an alternative, authorities use information campaigns to induce prosocial behaviors. In this paper, I analyze how they should be optimally designed. I develop a model where, in addition to material consumption, moral agents derive utility from their self-image, which is determined by the distance between their actual consumption and their perception of the ideal consumption of a dirty good. To regulate externalities, the regulator can implement a tax or an information campaign to modify agents' perception of the ideal behavior. Two types of agents emerge from the model: (i) those who are averse to being too far away from their ideal and value the first efforts to get closer are the self-forgiving, and (ii) those who are averse to not behaving exactly like their ideal are the self-demanding. I show that a lower perceived ideal reduces consumption of the dirty good for self-forgiving agents while it increases it for strongly self-demanding agents through a discouragement effect. I then study optimal information campaigns, especially when taxes are inefficiently low. I find that their design crucially depends on the type of agent, the tax level, and whether the regulator pursues moral or material efficiency.