Towards Climate Neutrality in Poland by 2050: Assessment of Policy Implications in the Farm Sector

Abstract

Climate neutrality achievement in the European Union assumes the necessity of efforts and transformations in most economic sectors of its member-states. The farm sector in Poland, being the second largest contributor to the country’s greenhouse gas (GHG) emissions and in the top fifth of farm sectors in the EU-27 countries, needs to undergo structural and technological transformations to contribute to the climate action goals. The article assesses the potential impacts of Poland’s climate neutrality achievement path on the domestic farm sector in terms of its structure, output, income, and prices of agricultural products. The approach is based on complex economic modelling combining computable general equilibrium (CGE) and optimisation modelling, with the farm sector model consisting of farm, structural, and market modules. While the modelling results cover three GHG emission-reduction scenarios up to 2050, to understand the transformation impact within varying policy approaches, the study for each scenario of farm sector development also outlines three policy options: carbon pricing, forced emission limit, and carbon subsidies. Results in all scenarios and policy options indicate a strong foreseeable impact on agricultural output and prices (mainly livestock production), shifts in the production structure toward crops, as well as changes in farm income along the analysed timeframe.