Case studies: Climate

Do financial policy instruments work in the farming sector? Carbon markets and taxes have been used by many EU member states to reduce greenhouse gases emission in some sectors of the economy, but never in agriculture. Two case studies conducted in Italy and Denmark explore farmers’ response to the introduction of these market-based instruments in agriculture and examine behavioural mechanisms that mediate such response. The case studies also test the potential ability of such instruments to reduce greenhouse gas emissions from agriculture via the adoption of innovative technologies and more sustainable production practices by farmers. Experimental economic approaches are used to study farmers’ behavioural change and attitudes.