Climate-environment-economy model to inform Denmark´s agricultural climate policy

Successful implementation of the recent Danish Green Tripartite Agreement requires carefully designed ex ante model-based analyses of its domestic and international impacts, including emission leakage and land use change effects. For example, will a shift in Danish land use from agriculture to forests and open nature trigger deforestation and increased emissions in other countries as some agricultural production moves abroad? If so, how could such leakage effects be minimized?

A combined modeling framework

This project develops an integrated climate-environment-economy modeling framework that can answer such questions by quantifying local-to-global land use effects, also accounting for trends in worldwide food consumption patterns, emission abatement technologies, and global climate policy trajectories. It combines theoretical economic analysis and agricultural sectoral modeling expertise, integrating an economic theoretical model with a global model with very granular details of the land-use, environment and climate aspects of the agriculture sector. The framework allows for implementation in the existing Danish national climate-economy model GreenREFORM, ensuring a better understanding of leakage effects of future Danish environmental policies.

International spillover effects

Using this modeling framework, we construct detailed baseline scenarios by including projections of GDP, population, climate policy, trade policy, and other key factors. Against the baseline, we formulate and simulate scenarios of the Green Tripartite Agreement in conjunction with agricultural and non-agricultural climate policies at the EU level and plausible agricultural emission trajectories in the rest of the world.

This project serves as an important first step in developing integrated solutions for informing relevant Danish public authorities and the society-at-large about the international spillover effects of Danish climate policies. Additionally, the project's infrastructure can facilitate the analysis of multiple Planetary Boundaries, such as GHG emissions and land-use changes, supporting the development of policies that address interconnected environmental challenges in an interconnected world.