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Decarbonization at What Cost? Assessing the Agricultural Economic Impact of Mitigation Policy: Evidence From Net‐Zero Targets

Year: 2026

Type: article

Abstract: Typically, the effectiveness of mitigation policy is assessed jointly across environmental, economic, and social dimensions. Agriculture is recognized as the most climate-sensitive industry and three-quarters of the global poor depend on agriculture for their livelihoods. Hence, employing net-zero targets for 143 nations as a novel angle, this study designed a multi-period difference-in-differences model to assess this statement, with a particular focus on its agricultural economic impact. Results indicated that mitigation policy is expected to reduce agricultural output value by 7.9% and the magnitude of emission reduction is nearly half that of output reduction. This finding implies that decarbonization is not merely a sacrifice of agricultural output, but may lead to its destruction. Moreover, mitigation policy exhibits a statistically significant negative impact on no poverty. Notably, observed output losses is primarily attributed to stagnant mitigation technology. Fortunately, this study identified that the output-enhancing effect of adaptation policy can largely compensate for these losses. To achieve a sustainable future, global entities must collectively optimize the deployment of climate action across multiple fronts to practically enhance the effectiveness of mitigation policy.

Source: Global Challenges

DOI: 10.1002/gch2.70111

Authors: Yu Lai, Zhaopu Liu, Mingen Zhao, Cheng Zhang, Yuchun Zhu

Institutions: Northwest A&F University, Central University of Finance and Economics

Language: English

Topic: Climate Change Policy and Economics

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Climate action, Zero hunger, No poverty, Decent work and economic growth

Open Access status: gold

Estimated APC paid: $3,810