Agriculture's role in climate change is undeniable, contributing significantly to greenhouse gas emissions through land-use changes and production practices. The global scale of agricultural subsidies, reaching approximately US$600 billion annually, raises concerns about their potential impact on emissions. While anecdotal evidence suggests a link between these subsidies and high-emission farming systems, a rigorous quantitative analysis has been lacking. This research addresses this gap by investigating the relationship between agricultural subsidies and global GHG emissions, aiming to quantify the influence of various support mechanisms on overall emission levels. Understanding this relationship is crucial for developing effective policies to mitigate climate change while maintaining food security. The study examines the impact of different subsidy types, considering their influence on both production and consumption patterns, and explores the complexities of indirect effects on emission intensity. The importance of this work lies in its potential to inform the design of more sustainable agricultural policies that balance climate change mitigation with food security goals. The study's comprehensive approach, utilizing a global computable general equilibrium (CGE) model, allows for a detailed analysis encompassing diverse factors such as regional variations in emission intensity, the effect of different subsidy types, and shifts in production patterns.

The existing literature highlights the significant contribution of agriculture to greenhouse gas emissions, with studies quantifying the proportion attributable to different agricultural practices and land-use changes. However, the literature on the specific impact of agricultural subsidies on global GHG emissions is limited. While some studies have explored the effects of individual subsidy programs or policies in specific regions, a comprehensive global analysis considering the diverse forms of agricultural support and their interactions remains scarce. Previous research often focuses on the impact of specific subsidies or agricultural policies on emissions in a limited geographical context, neglecting the interconnectedness of global agricultural markets and the potential for indirect effects. This study aims to address these limitations by employing a global CGE model to capture the broader influence of agricultural support on emission levels worldwide. The researchers also critically evaluate the existing literature, examining different subsidy designs and their influence on output decisions and environmental outcomes.

The study utilizes a rigorous model-based approach to quantify the impact of agricultural subsidies on GHG emissions. It employs IFPRI's global computable general equilibrium (CGE) model, MIRAGRODEP, augmented with emission modules to capture the impacts of changes in agricultural outputs and inputs on emissions from various sources (enteric fermentation, manure management, synthetic fertilizers, etc.). The model accounts for complexities such as regional variations in emission intensities, different types of support (coupled subsidies, border measures, decoupled subsidies, general services support), and shifts in commodity production due to policy changes. The analysis involves comparing the current emission levels with a counterfactual scenario where government support is absent. The model simulates changes in agricultural output and GHG emissions under different scenarios by country and commodity. A new database was created, mapping GHG emissions by source, location, commodity, production stage, and technology. This detailed database, combined with the MIRAGRODEP model, allows for a comprehensive assessment of the impacts of various support mechanisms on GHG emissions. The model incorporates economic assumptions to isolate the effect of agricultural support policies from other macroeconomic factors, providing a clearer picture of the direct impact on emissions. The analysis considered the combined impact of coupled subsidies and border measures, evaluating both their individual effects and their aggregate outcome on GHG emissions. The researchers also analyzed the impact of potential reforms focusing on research and development (R&D) aimed at emission reductions and productivity improvements. Two scenarios were modeled: one focusing on emission-intensity reduction without significant productivity changes, and another where innovations reduce both emission intensity and input costs, capturing the potential rebound effect of increased demand.

The study's key findings reveal a complex relationship between agricultural subsidies and global GHG emissions. While coupled subsidies, which directly stimulate agricultural production, lead to increased global agricultural output (0.9%) and GHG emissions (0.6%), border measures (market price support through trade barriers) have a surprisingly different impact. Border measures increase global agricultural output minimally (0.1%) while actually reducing GHG emissions by approximately 2%. This counterintuitive result is attributable to the rise in consumer prices within protected countries, decreasing overall demand and shifting production from high-emission to lower-emission regions. When combined, coupled subsidies and border measures result in a small net increase in global farm output (1.1%) but a net reduction in GHG emissions of about 1.7%. This reduction highlights the significant role of emission intensity differences across countries and commodities. The most emission-intensive commodities (beef and dairy) experience production shifts away from high-emission countries, contributing to the net reduction. The analysis further indicates that simply abolishing current agricultural subsidies and trade protection may not lead to substantial emission reductions and could potentially result in a slight increase. Significant emission reduction requires a substantial policy overhaul, shifting support toward measures directly targeting emission reductions such as R&D for climate-smart technologies and practices. Simulations examining the impacts of 30% emission intensity reductions revealed a substantial potential for GHG reduction; however, the benefit was reduced by a rebound effect if those same technologies increased productivity leading to higher demand.

The findings challenge the conventional view that simply eliminating agricultural subsidies will automatically reduce GHG emissions. The complex interplay between subsidy types, consumer demand, and regional differences in emission intensity creates a nuanced picture. The study's success in quantifying the effect of agricultural support on GHG emissions provides valuable insights for policymakers. While current policies have a modest overall impact, the small net emission reductions are not sufficient to address the significant challenge posed by agriculture's contribution to climate change. The research strongly supports a shift towards policies that directly incentivize emission reduction and invest in research and development of climate-smart technologies. The rebound effect highlights the need for a careful consideration of policies that increase productivity, as increased demand can partially offset emission reduction gains. The study's limitations concerning land use change necessitate further research in that area.

This study provides a crucial quantitative assessment of the impact of existing agricultural subsidies on global GHG emissions. The findings indicate a more complex picture than previously assumed, showing that simply removing subsidies might not lead to significant emission reductions. The study highlights the need for a comprehensive restructuring of agricultural support policies, focusing on direct emission reduction measures, R&D investments in climate-smart technologies, and incentives for adopting such practices. Future research should explore more detailed scenarios integrating land-use change, focusing on additional reforms sensitive to climate mitigation and adaptation, and incorporating multiple policy instruments to balance economic efficiency, emission reduction, food security, and poverty reduction.

The study's analysis focuses primarily on emissions from agricultural production, excluding land-use change and carbon sequestration impacts. The exclusion of these factors limits the comprehensive assessment of the overall impact of agricultural support policies on the climate. The model also relies on assumptions about production technologies and consumer behavior, which could influence the accuracy of the simulated outcomes. The study's findings therefore present a lower bound on the potential effect of policy changes; future research should include these additional factors for a more holistic understanding.