France is the top agricultural producer in the European Union (EU), and agriculture plays a prominent role in the country’s foreign trade and intermediate exchanges. Reflecting production volumes and methods, the sector, however, also generates significant negative environmental and public health externalities. Recent model simulations show that a
well-designed shift in production and consumption to make the former sustainable and align the latter with recommended values can curb these considerably and generate large macroeconomic gains. I propose a policy toolkit in line with the government’s existing sectoral policies that can support this transition.
, polyculturefarmingactivities or farms with a higher labor-to-acre ratio vis-á-vis large, monoculture, highly-mechanized farms, which tend to follow less sustainable production methods. 44
43. Likewise, various options are available to modify the allocation of CAP subsidies in support of more sustainable production . While the overall envelope and general guidelines governing CAP subsidies depend on the EU’s collective policy decisions, 45 the CAP offers considerable flexibility in the allocation of subsidies to member countries in the context of both Pillar 1—funded
Nicoletta Batini, Ian W.H. Parry, Mr. Philippe Wingender, and Miguel A. Segoviano
Farm size (lowering the fiscal burden for smaller, polyculturefarmingactivities or farms with a relatively high labor-to-acre ratio relative to large, monoculture, and highly mechanized farms).
Land use beyond farming. Reconverted land during the transition that ends up no longer being used for grazing, horticulture or crops could receive subsidies for carbon sequestration based on sequestration services and reconversion costs.
On the demand side, a (Pigouvian) tax could be applied to foods (notably meat and dairy) associated with high negative
Nicoletta Batini, Ian Parry, and Mr. Philippe Wingender
Denmark has a highly ambitious goal of reducing greenhouse gas emissions 70 percent below 1990 levels by 2030. While there is general agreement that carbon pricing should be the centerpiece of Denmark’s mitigation strategy, pricing needs to be effective, address equity and leakage concerns, and be reinforced by additional measures at the sectoral level. The strategy Denmark develops can be a good prototype for others to follow. This paper discusses mechanisms to scale up domestic carbon pricing, compensate households, and possibly combine pricing with a border carbon adjustment. It also recommends the use of revenue-neutral feebate schemes to strengthen mitigation incentives, particularly for transportation and agriculture, fisheries and forestry, though these schemes could also be applied more widely.