Macroeconomic impacts of reducing greenhouse gas emissions from Canadian agriculture

Abstract

Canada's commitment under the Kyoto Protocol is to reduce its greenhouse gas (GHG) emissions by 6% of its 1990 levels. Each industrial sector is investigating alternative technologies, production and management practices that can decrease their GHG emissions. The macroeconomic impacts of four mitigation strategies to reduce GHG emissions from Canada's agriculture sectors were measured using an input-output model. The size of the GHG reduction from each mitigation strategy depended on whether agricultural soils were included as a carbon (C) sink. Including agricultural soils as a C sink impacts on the absolute amount of GHG emissions that must be reduced and the relative importance of the various mitigation strategies. This will be a key factor in policy development. Only one strategy, improving forage quality by 15%, had positive macroeconomic impacts in all situations. It was projected that this strategy would increase industrial output by $392.17 M and employment by 6155 jobs. The strategy decreased GHG emissions by 1.73% below the BAU situation.