The impact of the reform of the milk quota regime on the Italian dairy sector

This paper analyses the impact of the milk quota regime reform, actually under discussion, on the European countries with a detailed focus on the Italian milk and dairy sector. The dismantling of the milk quota regime is already on the EU agenda, but how and when to do it is still matter of debate. A possibility is to enlarge gradually the size of the national quotas, up to the full dismantling in 2015 (“soft landing”). Meanwhile, the discussion on Health Check of the CAP is under way. In this work we analyse the possible impacts of the reform of the milk quota regime on the basis of a Computable General Equilibrium (CGE) approach, using two models in sequence: the Global Trade Analysis Project (GTAP) model is used to evaluate the impacts of different scenarios of milk quota reform on the EU market and to compute the price changes outside Italy; these, in turn, are used as inputs for the MEG-D model, that focuses on the Italian milk and dairy market. The two models were run together with two specific objectives: the first was to avoid, in evaluating the impacts of reform of the milk sector regime in Italy, running the model with rough price estimates taken for secondary sources; the second, to have more specific results on the outcome at the national level. Particularly, the model takes in account the particular relevance of quality products (GDO) in Italian diary sector. In order to evaluate the impact of the “soft landing” reform scenario, we run a “comparison” scenario where the milk quotas are fully abolished in the 2009.Milk and dairy sector, Quota production, EU Agri-Food Market, PAC, Agricultural and Food Policy, Livestock Production/Industries,

Energy price shocks: sweet and sour consequences in developing countries

This paper discusses the effects of recent energy price changes on developing countries. It reviews the transmission channels between energy prices and growth and distribution in developing countries based on the most recent literature; employs a Computable General Equilibrium (CGE) model to identify the most vulnerable countries; and presents three brief country case studies analysing policy responses to oil shocks in more detail (Nigeria, Malawi and Ghana). The issue of energy shocks is crucial, as oil prices affect growth. Since Brent oil prices hit a 2011 high of $127 a barrel in April 2011, as the conflict in Libya shut down its supplies, the International Energy Agency (IEA) has repeatedly said that oil prices pose a threat to growth. In 2011, the IEA estimated nominal oil prices of$114 a barrel in 2015, revising its 2010 estimate of $104 a barrel upward. / Oil prices and developing country growth: An increase in oil prices has a negative effect on oil-importing countries making their input costs are greater. Meanwhile, it is commonly thought that oil prices will benefit oil exporters through improved terms of trade, at least in the short run. However, if we take into account the decrease in world gross domestic product (GDP) induced by higher oil prices and the competitiveness (production costs) of nonoil sectors in oil-exporting country, higher oil prices may eventually lower incomes in all developing countries. We estimate that, in terms of real GDP, African countries may suffer up to a 3% loss from a doubling of oil prices. / Oil prices, poverty and distribution: Because of their effect on employment and on food and transport prices, oil price shocks also have important distributional impacts within each country. Evidence shows that recent energy price shocks have increased food insecurity and poverty levels in developing countries. Some population segments have a higher degree of vulnerability, including the poor, the landless, informal sector workers and female-headed households. Evidence from household surveys in several countries shows that oil price shocks tend to have a stronger effect on poorer households, as a higher proportion of their expenditure goes towards oil products. / Effects of recent oil price changes in selected case study countries: Reviewing the experience of Nigeria, we find that oil price increases can harm countries with abundant oil but low refinery capacity. In such cases, an oil price will lead to fuel price stabilisation policies such as fossil fuel subsidies, which affect the national budget negatively and generate adverse environmental effects. Countries with oil reserves such as Ghana may suffer ‘Dutch disease’, which may reduce long-term growth by making the national currency stronger and diverting resources from other exportable production to national consumption. In Malawi, physical fuel scarcity generated by a lack of foreign reserves has been exacerbated by economic scarcity deriving from fuel price increases. / Conclusions: Many developing countries are already putting in place policy responses to reduce their dependence on oil (e.g. energy conservation, diversification) but, as our case studies show, long-term commitment to such policies outside the political and/or electoral cycle, government effectiveness, real independence of regulatory bodies and technical skills of decision makers need to be in place for the successful implementation of appropriate actions to reduce vulnerability or cope with oil price increases. Policies to cope with oil price crises include the strengthening of refinery capacity for countries with oil endowments, interventions promoting a structural change towards green sources of energy, the creation of strategic petroleum reserves and hedging strategies

Mitigation of adverse effects on competitiveness and leakage of unilateral EU climate policy: An assessment of policy instruments

The European Union (EU) has developed a strategy to mitigate climate change by cutting greenhouse gas (GHG) emissions and fostering low carbon technologies. However, the risk of implementing unilateral policies is that distortive effects are generated at the global scale affecting world energy prices, international competitiveness and the geographical allocation of carbon intensive production processes. Using a dynamic CGE model,we assess the rate of carbon leakage and adverse impacts on competitiveness in a number of scenarios over the period2010–2050. According to the model results, we highlight two major issues. First, in the case of a unilateral EU climate policy, carbon leakage and negative effects on competitiveness are quite serious. Anti-leakage measures can only mitigate leakage and adverse economic impacts on competitiveness in a limited way. On the contrary, an optimality analysis addressing the environmental effectiveness, cost-effectiveness and political feasibility of alternative policy solutions reveals that the EU long termdecarbonisation strategy by investing in energy efficiencyand renewable energy might ensure protection of vulnerable manufacturing activitieswhile enhancing the competitiveness of technologically-advanced industries

Multiple carbon accounting to support just and effective climate policies

Negotiating reductions in greenhouse gas emission involves the allocation of emissions and of emission reductions to specific agents, and notably, within the current UN framework, to associated countries. As production takes place in supply chains,increasingly extending over several countries, there are various options available in which emissions originating from one and the same activity may be attributed to different agents along the supply chain and thus to different countries. In this way, several distinct types of national carbon accounts can be constructed. We argue that these accounts will typically differ in the information they provide to individual countries on the effects their actions have on global emissions; and they may also, to varying degrees, prove useful in supporting the pursuit of an effective and just climate policy. None of the accounting systems, however, prove 'best' in achieving these aims under real-world circumstances; we thus suggest compiling reliable data to aid in the consistent calculation of multiple carbon accounts on a global level

Leakage of nitrous oxide emissions within the Spanish agro-food system in 1961-2009

Abstract In this paper we examine the trends of nitrous oxide (N2O) emissions of the Spanish agricultural sector related to national production and consumption in the 1961?2009 period.The comparison between production- and consumption-based emissions at the national level provides a complete overview of the actual impact resulting from the dietary choices of a given country and allows the evaluation of potential emission leakages. On average, 1.5 % of the new reactive nitrogen that enters Spain every year is emitted as N2O. Production- and consumption-based emissions have both significantly increased in the period studied and nowadays consumption-based emissions are 45 % higher than production-based emissions. A large proportion of the net N2O emissions associated with imported agricultural godos comes from countries that are not committers for the United Nations Framework Convention on Climate Change Kyoto Protocol Annex I. An increase in feed consumption is the main driver of the changes observed, leading to a arkable emission leakage in the Spanish agricultural sector. The complementary approach used here is essential to achieve an effective mitigation of Spanish greenhouse gas emissions

An assessment of import tariff costs for Italian exporting firms

Since production and trade are increasingly organized within global value chains (GVCs), assessing who effectively pays the cost of protection is not straightforward and since productive processes are internationally fragmented, quantifying the effects of trade policy requires an enhanced analytical framework that takes international input–output linkages into account to assess the implications trade costs have on competitiveness at national and sector levels. This paper defines a new synthetic measure of trade protection based on the value added in trade, capturing the effects that the tariff structure has on exporting firms that rely on imported intermediate inputs. The index, defined in a general equilibrium framework, provides a theoretically sound protection measurement in the context of GVCs. We assess trade protection by computing protection indexes at the bilateral level on both gross imports and imports to exports using the Global Trade Analysis Project computable general equilibrium model. These indexes are used to investigate the relationship between the European Union tariffs and integration of the Italian GVCs. In the case of Italy, imports to exports are overall less protected than gross imports with significant differences at the sector level. Despite the low levels of nominal protection, industrial sectors play a central role in explaining our results. EU tariffs mostly affect Italian exporting firms in the case of chemical products, wearing apparel and leather products