Information for 16512IIED
Climate change and agriculture: can market governance mechanisms reduce emissions from the food system fairly and effectively?
Issue paper, 70 pages
Climate and agriculture are inextricably linked: the climate affects agricultural production and is itself affected by agricultural emissions. Agriculture is responsible for 30 per cent of global greenhouse gas emissions. How agriculture is practised therefore has significant potential for mitigating climate change, for providing food security and for improving the livelihoods of millions of food producers worldwide.
There is growing interest in the use of market governance mechanisms for tackling climate change by giving the financial incentives to make the kinds of changes that are required. But how widely are these mechanisms being used in agriculture, and are they effective in reducing emissions? What impact do they have on adaptation and other aspects of sustainable development? Are they able to balance the competing demands of producers and consumers, the environment and food security?
The key messages emerging from this study are that economic measures have a vital part to play within this regulatory context, but they need to be designed with care. To be effective, emissions from food production and consumption must be addressed together. If not, emissions reduced in one region will simply be displaced elsewhere. A balance needs to be struck by applying a mix of approaches – regulatory, economic, voluntary, and information: no single measure will be effective in achieving emissions reductions on its own. ‘Soft’ measures, such as voluntary agreements and information have a part to play in providing an enabling context for action, but they must be backed up by ‘harder’ regulatory or economic measures. Regulation, in the form of a cap on emissions, is a prerequisite for other market governance measures to function well. To be effective, MGMs need to consider the social, cultural and economic context within which they operate.
Shaping Sustainable Markets is a research initiative that explores how the formal and informal rules used to govern markets – called market governance mechanisms (MGMs) – are designed, and how they impact on people, the planet and the economy.
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Shaping Sustainable markets