Estimation of Greenhouse Gas coefficients per Commodity and World Region to Capture Emission Leakage in European Agriculture

This paper presents a novel methodology to estimate greenhouse gas emission coefficients for agricultural commodities produced in the whole world, differentiated by region of production (regional disaggregation as defined by the Food and Agriculture Organization). For the European Member States (MS), emission coefficients per activity and product are borrowed from previous studies with the CAPRI modelling system. Emission coefficients for non-EU regions are here estimated within a Bayesian econometric framework for traded agricultural commodities by using (i) the existing estimates for the EU regions per gas source and product as a-priori information, (ii) time series on emission inventories per gas source and region from the Emission Database for Global Atmospheric Research (EDGAR), and (iii) time series on key production indicators from FAOSTAT. The estimator proposed uses emission factors in similar European regions as prior information in order to resolve the ill-posedness inherent to the estimation problem. As a result a complete set of GHG emission coefficients is estimated for 177 countries, 25 products and 10 emission sources. By combining them with production and trade statistics, emission trade balances for those regions are calculated