The trade-off between food production and greenhouse gas mitigation in Norwegian agriculture

Abstract

Agriculture in Norway makes a significant contribution to the country's emissions of greenhouse gases (GHG). Although it accounts for only 0.3 percent of the country's gross domestic product, it is estimated to account for roughly 9 percent of total GHG emissions. Norwegian agriculture is dominated by livestock production; ruminants (cattle and sheep) are particularly important. There are opportunities for GHG mitigation under existing technology, both through changes in agricultural practices and through sequestration activities, particularly agro-forestry. Using a detailed economic model based on representative farms we assess the impact of a targeted reduction of 30 percent in GHG emissions on agricultural activity—the continuation of which is a key policy objective in Norway. Implications of mitigation are examined both for a representative dairy farm and for the sector as a whole.The imposition of a CO2 tax on agricultural activity would result in a reduction of agricultural production in Norway, particularly for GHG-intensive commodities such as beef and sheepmeat. Focusing on a representative dairy farm we conclude that measures that facilitate higher intensity and yields in Norwegian milk production would make it possible to cut emissions per unit of milk. For the agricultural sector as a whole, there would be an extensification of production and emissions per hectare would decline. In contrast, if farmers were rewarded for carbon sequestration activities (specifically agro-forestry) this would lead to intensification, as more inputs are applied to the land remaining in agriculture. Emissions per unit of agricultural land would increase but would decline per unit of output. For a given targeted reduction in agricultural GHG emissions, overall production can be kept highest under an intensification strategy.Although the numerical results are specific to the Norwegian setting, they are illustrative of issues facing other countries whose agriculture is dominated by ruminants. They are also supportive of arguments made by others that if global agriculture is to meet the needs of an expanding world population while simultaneously contributing to mitigation of GHG emissions, changes in the structure of production and intensification will be required.