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07 Jun 2006

Potential WTO Trade Reform

Multifunctionality Impacts for Ireland?

Trevor Donnellan / Kevin Hanrahan

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European Network of Agricultural and Rural Policy Research Institutes (ENARPRI) Working Paper No. 16 / 18 pages

The economic impact of trade policy reforms on various sectors of the economy receives more attention than the effects on the environment. This may be partly owing to the secondary importance attributed to environmental or multifunctionality issues when economic consequences take centre stage. An additional consideration, however, may be the practical difficulties of bringing together models that examine the economic impact of trade policy reforms and models that can measure environmental or multifunctionality indicators.
This paper examines one aspect of the relationship between trade policy and the environment, namely that between agricultural trade policy reform and emissions from the agricultural sector. The paper analyses the impact of agricultural production levels and practices on the level of greenhouse gas (GHG) and ammonia emissions from this sector in Ireland.
The study combines an economic, partial equilibrium, agricultural commodity and inputs model (the FAPRI-Ireland model) with a model for the estimation of GHG and ammonia emissions from agriculture. The paper considers a potential reform of agricultural trade policy under a possible World Trade Organisation agreement, to reveal the extent to which there are environmental effects associated with such a reform that need to be considered in addition to the conventional economic ones.