Agriculture, trade, and environmental policy

Abstract

Agriculture plays a pivotal role in shaping global land use, with nearly half of the world's habitable land dedicated to agricultural activities. While essential for meeting humanity's food needs, agriculture also exerts considerable pressure on local and global environments. Addressing these environmental externalities presents an urgent challenge for policymakers. This thesis comprises three papers that aim to inform policy by examining the sources behind agricultural pollution trends and exploring how shifting food preferences and different emissions policy strategies impact agricultural land use, emissions, trade flows, consumption patterns, and social welfare.

Paper I uses index decomposition methods to decompose nitrogen and phosphorus leakage trends from Swedish arable land. Importantly, we find only modest leakagedecreasing technique effects, mainly driven by increased yields per hectare rather than reductions in per-hectare nutrient leakage. We argue that lax regulation of agricultural pollutants is a key factor behind these results.

Paper II studies the use of strategic trade policy by high-income countries to reduce global emissions, providing theoretical definitions and quantitative evidence on the relevance of ‘Environmental Comparative Advantage’ (ECA). Our results show that if a region has a global ECA in a pollution-intensive good whose production emits a transboundary pollutant, there may be a role for subsidising that good to displace even dirtier production elsewhere. We test policy alternatives quantitatively using a novel Ricardian EU–South America trade model, focusing on beef and GHGs.

Paper III uses a structural trade model calibrated to food and feed crop production in the Global South and the Global North to analyse the quantitative implications of a hypothetical decline in wealthier consumers' relative preference for meat. The results suggest that a five percent decline increases the share of global cropland allocated to food crops, and net meat consumption falls by one percent, with some shifting from the North to the South. These changes benefit all consumers but reduce landowners' rents due to lower crop prices. The limited impacts suggest that making the food system more resource-efficient will require additional targeted policy.

Keywords

agriculture; local and global pollution:land use; strategic trade policy; environmental comparative advantage; emissions regulations; meat consumption

Published in

Acta Universitatis Agriculturae Sueciae
2025, number: 2025:14
Publisher: Swedish University of Agricultural Sciences

SLU Authors

• Wahtra, Julia

  • Department of Economics, Swedish University of Agricultural Sciences
    

UKÄ Subject classification

Agricultural Economics and Management and Rural development
Environmental Sciences and Nature Conservation

Publication identifier

• DOI: https://doi.org/10.54612/a.390od59imo
• ISBN: 978-91-8046-449-9
• eISBN: 978-91-8046-499-4

Permanent link to this page (URI)

https://res.slu.se/id/publ/132954