Seeking optimality in climate change agri-food policies: stakeholder perspectives from Western Europe^†

† A previous version of this article has been delivered in the form of a report to the European Commission (CECILIA Report on Food and Agriculture: The Current Policy Mix, Task 2.4).

Abstract

This article examines stakeholder perspectives on the ‘optimality’ of the climate policy mix in the agri-food sector in the EU using the criteria of environmental effectiveness, cost-effectiveness, and political feasibility. Based on a literature review and selected stakeholder interviews in two Northern (The Netherland and UK) and two Southern EU Member States (Italy and Spain), we conclude that the current policy mix is far from optimal. There are currently no EU-wide policy instruments to address GHG emissions in the agri-food sector, and little Member State level action. A number of initiatives from the private sector (particularly retailers) are present, although they are limited in scope and objectives. Looking forward, three concrete recommendations for improvements may be identified. First, stakeholders identify the need for the development of EU-wide policy instrumentation for GHG abatement from the agri-food sector, to provide a ‘level playing field’ for farmers and other economic agents in the sector. Second, many stakeholders consider it crucial that a holistic, ‘whole supply chain’ in contrast to a ‘piecemeal’ approach is taken. Third, the role of government is considered important, but predominantly in terms of providing a general framework within which more ambitious voluntary approaches could develop.

Policy relevance

From a policy perspective, this article aims to assist the EU develop more ‘optimal’ climate policies for the agri-food sector by taking into account the views and perspectives of different stakeholders involved in different countries on three main ‘optimality’ criteria, namely, environmental effectiveness, cost-effectiveness, and political feasibility.

Keywords:

• agricultural emissions
• climate change policies
• stakeholder participation/engagement

1. Introduction

Non-CO₂ GHG emissions, mainly from agriculture and waste, form a significant share of EU GHG emissions and are difficult to regulate. Non-CO₂ GHG emissions include emissions of methane (CH₄) and nitrous dioxide (N₂O) that are very potent greenhouse gases; that is, their global warming potential is large relative to the GHG CO₂. In its Roadmap for moving towards a low-carbon economy, the European Commission (2011) claims that due to the growing global demand for food, the share of agriculture in the EU’s emissions may rise to a third by 2050, in a baseline scenario of steady world economic growth.¹ Agriculture will need to cut its emissions from fertilizers, manure, and livestock and should contribute to the storage of CO₂ in soils and forests. Along the food chain, the current waste of food can and should be reduced. The Commission also points out that changes towards a healthier diet with more vegetables and less meat can reduce emissions.

In the Roadmap, the Commission sets an indicative target for a reduction of non-CO₂ emissions from agriculture in 2050 in the order of 42–49% below 1990 emissions. Such a target would be compatible with the target of an overall 80% emissions reduction, and also with the Intended Nationally Determined Contribution (INDC) of the EU and its Member States to the 2015 Paris Agreement of the United Nations Framework Convention on Climate Change.² The urgency of reducing agricultural emissions for meeting the ambitions of the Paris Agreement is emphasized by an assessment of Wollenberg et al. (2016), who argue that low-carbon scenarios indicate that agricultural emissions will soon constitute the largest sector of surplus emissions in the future, as other sectors are projected to reduce their emissions to the maximal extent by 2030. Currently, however, in the EU or elsewhere there are no policy instruments in place to realize such a substantial reduction in emissions. Recent emissions reductions are predominantly the side effects of other policies (e.g. nitrate and water) and any existing policy measures currently have a high degree of voluntariness and non-commitment (Grosjean et al., 2016).

In designing comprehensive GHG mitigation policies in agriculture, a number of important challenges, including issues of measurement and attribution, have to be addressed.

• The agricultural sector in Europe consists of a very large number of heterogeneous farms, which emissions are often difficult to measure because of complex biophysical reactions (Pérez Domínguez & Fellmann, 2015). Further, emissions can vary widely due to natural circumstances (Franks & Hadingham, 2012).

• Large differences are found in the cost-effectiveness of mitigation measures within and between Member States (Franks & Hadingham, 2012; Pérez Domínguez & Fellmann, 2015). Often, GHG mitigation measures generate both co-benefits and trade-offs in other areas that are subject to public policies (e.g. environment, health, and regional development). Yet, there is no agreement on how to attribute co-benefits and adverse effects to specific mitigation measures. In addition, there are no standard metrics for quantifying many of these effects (Bustamante et al., 2014). This becomes problematic when policy measures negatively affect production, particularly if they are not accompanied by equivalent decreases in EU consumption, in which case, part of the EU decrease may be replaced by imports. This, in turn, can cause increase in emissions outside the EU that may considerably downsize the net effects of EU mandatory targets on global GHG reduction (Van Doorslaer et al., 2015). In this context, both the choice of policy instruments and the way in which governments react to pressures to avoid or deflect the costs of mitigation may have the potential for conflict with World Trade Organisation (WTO) trade rules (Blandford & Josling, 2009).

• Changes in consumer diets and decreases in food waste are essential to deliver emissions reductions and provide global food security in 2050 as recent global studies suggest (Bajželj et al., 2014; Tilman & Clark, 2014). Similar observations have been confirmed for Europe, especially with respect to livestock products (Bellarby et al., 2013). Tilman and Clark (2014) argue that the implementation of dietary solutions to the tightly linked diet–environment–health trilemma is not only a global challenge, but also an opportunity. Accordingly, some authors have advocated output taxes on emission-intensive agricultural goods (especially livestock products) as a relatively efficient policy instrument to deal with agricultural GHG emissions (Wirsenius, Hedenus, & Mohlin, 2011).

Given these challenges, the quest for optimal policy responses in reducing GHG emissions in the agri-food sector is essential but not straightforward. Some studies evaluate optimality primarily on the basis of cost-effectiveness. These studies conclude, for instance, that more flexible policy instruments reduce cost inefficiencies and may also distribute mitigation efforts in a more equitable manner across Member States (Bakam, Balana, & Matthews, 2012; Pérez Domínguez & Fellmann, 2015). In the CECILIA2050 project, ‘optimality’ of policy instruments is not defined solely in terms of cost-effectiveness, however. Instead, we also include the notions of environmental effectiveness and political feasibility (Go¨rlach, 2013). Indeed, we argue in favour of a more comprehensive notion of ‘optimality’, instead of addressing a single dimension only.

To assess the ‘optimality’ of policy responses in the light of the risks, priorities, market, and other imperfections that provide the rationale for public policy, we identified and interviewed 39 stakeholders along the entire food chain in four different Member States (the UK, the Netherlands, Italy, and Spain). This allowed us to capture diversity in European farming systems, policy and food cultures, as well as wider social standards and norms. Our article thus aims to complement the emerging literature of policy responses to GHG mitigation in different socio-economic contexts (e.g. agriculture and cities) with the experiences, preferences, and expectations of stakeholders in different cultural and political contexts within Europe (e.g. Heidrich et al., 2016).

2. Analytical framework and methodology

There is no agreement in the literature about what constitutes an ‘optimal’ policy to address environmental problems in general, and climate change, more specifically. Taking into account previous work on the evaluation of economic and policy instruments for climate and environmental policy (Duval, 2008; Hood, 2011; Konidari & Mavrakis, 2007; Sorrell, 2003), the CECILIA2050 project defines optimality on the basis of three broad criteria (Go¨rlach, 2013).

The first criterion is environmental effectiveness. Analytically, effectiveness can be studied following Easton’s three-dimensional concept, as output, outcome, and impact (Easton, 1965). The output is the result of the formation of the institution in question (a standard, a code of conduct, a set of principles or guidelines, etc.). The actual change in conduct achieved in the course of implementation of the particular output represents the outcome. Finally, the general change resulting from the interaction with additional economic, social, and political externalities is the impact. In the context of agriculture, more specifically, output represents the development of policies and initiatives at the EU and national levels in order to achieve the target of a reduction of non-CO₂ emissions from agriculture in 2050 in the order of 42–49% below 1990 emissions. Outcome represents the behavioural and organizational changes of actors in the agri-food sector resulting from the particular policies and initiatives. Impact would be the actual emissions reduction and any other unintended consequences. As it is too soon to evaluate outcome and impact, we focus primarily on output.

The second criterion is cost-effectiveness, that is, achieving the desirable policy interventions at the least possible cost to society (Görlach, 2013). Importantly, cost-effectiveness in this article is not synonymous to efficiency in macroeconomic terms. This would require an analysis of welfare maximization of climate policies not foreseen in the CECILIA2050 project, which takes the existing EU climate policy targets as a given (Go¨rlach, 2013, p. 6).

The third criterion is the feasibility of policies. Feasibility suggests that a ‘policy proposal is acceptable to or at least not opposed by a sufficient number of the relevant policy-makers so that the proposal is likely to be adopted’ (Webber, 1986, p. 549). This includes the ease of implementation; the broader institutional, legal, and cultural context; and the fairness of the policy in terms of the distribution of costs and benefits. In this article, we focus particularly on distributional issues as the perception of unfair or inequitable impacts by different affected interests can be expected to unleash strong opposition to policy proposals and instruments.

A comprehensive assessment of optimality would require, first, a definition of appropriate emission reduction targets against which the current policies would, then, be assessed in terms of their environmental and cost-effectiveness as well as their feasibility. Such an assessment is, however, problematic at this point in time. Although the EU Roadmap provides some guidance on emissions reduction targets in the agri-food sector, assessment of the full social costs and benefits of current policies is difficult because of incomplete knowledge on the complex and often location-specific interactions between GHG emissions reduction, on the one hand, and other environmental and social externalities (including food security), on the other. We, thus, evaluate perspectives on optimality against the three aforementioned criteria by conducting expert interviews with selected stakeholders prominent in the agri-food sector of four selected countries. We acknowledge that an analysis of perspectives carries limitations, not least as these may differ across actors and countries. Yet, it is exactly such heterogeneity or homogeneity of responses that this research aims to uncover. Indeed, the extent to which a variety of stakeholders perceive policy instruments as environmentally ambitious, cost-effective, and fair will likely determine the ‘political sustainability’ (Lockwood, 2013) and legitimacy of climate change mitigation policies in the long run (see Jones, 2009; Patt & Weber, 2014). Understanding stakeholder perspectives in these issues will also enable policy makers to steer their responses in desirable directions (see Dewulf, 2013). We thus contribute an interpretative assessment of optimality in relation to more positivistic analyses on this topic (e.g. Gjerde, Grepperud, & Kverndokk, 1999; Van der Bergh, 2004).

Stakeholders are individuals and organizations ‘who are actively involved in [a] project, or whose interests may be positively or negatively affected as a result of project execution or successful project completion’ (Yang, Shen, Bourne, Ho, & Xue, 2011, p.146). In other words, any individual or group, who has an interest in or is impacted by a project or policy is considered a stakeholder. In this article, we classify stakeholders into four divisions widely used in the literature, that is, government, private sector, interest groups, and experts. Government includes those public actors determining and enforcing state policy. The category private sector consists of business actors and their sectoral and cross-sectoral associations. NGOs, consumer associations, and to a lesser extent the media are part of the category interest groups. Experts include research centres, consultancies, planning offices, or advisory boards with specialized knowledge of a particular sector. As these four groups of actors often represent different interests, and have varying motivations and ability to influence or contribute to the policy-making process, an evaluation of optimality needs to include perspectives from all.

We conducted interviews with 39 stakeholders from all 4 categories for the individual case studies. Stakeholders were identified on the basis of literature and web research and in consultation with expert institutions. These stakeholders were then invited to participate in this study and (mostly face-to-face) interviews were conducted with those who responded positively to our invitation. All interviews were conducted in May 2013, in the native language of the respondents and translated in English for the purposes of this research (Appendix 1 lists all stakeholders that were interviewed, Appendix 2 contains the questions that were asked, and Table 2 includes a summary of the main stakeholder responses).³

Four countries were selected for the case studies: the UK, the Netherlands, Italy, and Spain. These countries were selected to capture some part of the economic, cultural, and environmental diversity of farming in Europe. Practical reasons such as knowledge of the native language and available contact points also played a role in our selection criteria. Table 1 presents the agricultural emissions and (some) economic indicators of the agricultural sector in the case study countries and EU28.

Table 1 Agricultural emissions and economic indicators in the EU28 and four selected EU Member States

	Agricultural emissions (Mt CO2e)			Change in emissions (%)		Share in national total of:		Farm income per labour unit in 2012 (Euro)
	1990	2012	2050^a	1990–2012	1990–2050^a	Labour	GVA
UK	65.1	51.8	49.1	−20.4	−24.6	1.3	0.6	39,554
Netherlands	22.6	15.9	17.4	−29.5	−23.0	2.5	1.6	46,216
Italy	40.8	35.4	32.5	−13.2	−20.3	3.6	2.6	23,435
Spain	37.7	37.7	44.4	+0.1	+17.8	4.1	2.1	19,912
EU4^b	166.2	140.8	143.4	−15.3	−13.7	3.3	2.0	27,271
EU28	617.9	470.6	464.9	−23.8	−24.8	5.1	1.7	15,925

Source: Eurostat online database (accessed 23 October 2015); EU FADN online database (accessed 23 October 2015); European Commission (2013a, 2013b).

^aEU Reference Scenario 2013 (policies adopted by Spring 2012).

^bEU4 is the UK, the Netherlands, Italy, and Spain.

Table 1 shows that agricultural emissions in the case study countries have decreased over the period 1990–2012, except for Spain where they have remained stable. Projections to 2050 show an overall stabilization of future emissions at current levels, and an increase in some countries (Spain). Current policies clearly fall short of the ambitions the European Commission set out in the Roadmap (42–49% below 1990 emissions) and meeting the targets of the Paris Agreement. In all case study countries, farm income is between 19.9 and 46.2 thousand EU€, which is above the EU28 average of only 15.9 thousand EU€. The labour share in agriculture is between 1.3% and 4.1%, somewhat below the EU28 average. The share of agriculture in Gross Value Added (GVA) is between 0.6% and 2.6%, around the EU28 average. Accordingly, all four cases are close to the EU28 average regarding important socio-economic indicators, except for farm income, which is considerably higher in the selected countries. This, in turn, needs to be taken into account in generalizing conclusions about stakeholder positions on measures that may affect farmers’ income and related policy advice.

3. Case studies

3.1. The UK

There are currently no specialized policies that target directly climate change mitigation in the UK agri-food sector, according to stakeholder responses. Instead, the government appears to favour a voluntary approach in this sector (see also Bowen & Rydge, 2011). The most prominent industry-led initiative is considered the Greenhouse Gas Action Plan (GHGAP) formally launched by the farming industry in March 2011 with the primary aim of reducing emissions in the agricultural sector in England (Barclay, 2011). Steered by officeholders from the National Farmers Union (NFU) and the Country Land and Business Association (CLA), GHGAP aims to enable the farming industry achieve its commitment to an annual reduction of 3Mt CO₂e from 2018 to 2022 compared to the 2007 baseline as set out in the national Low Carbon Transition Plan (DEFRA, 2012a; GHGAP, 2011).

Next to GHGAP, devolved UK administrations have launched voluntary initiatives to reduce emissions from agriculture as well. Specifically, Scotland has launched the Farming for a Better Climate initiative, which aims to assist farmers identify ‘practical options’ towards a low-carbon future.⁴ Likewise, the Welsh government has established the Land Use Climate Change Group with the aim to investigate how agriculture and rural land use can reduce climate change and facilitate adaption.⁵ Northern Ireland has published the Greenhouse Gas Emissions Reduction Action Plan highlighting the steps undertaken to address climate change in various sectors including agriculture.⁶ However, these constitute plans rather than concrete policy options.

Interviews with stakeholders reveal that they not only evaluate GHGAP and voluntary initiatives in general as overall positive (Table 2; UK 2), but also identify significant challenges that need to be considered. First, reducing emissions in the agri-food sector is considered complex due to the complexity of the biological systems involved and the role of external conditions such as temperature and differences in soil. In this context, respondents referred us to two main documents produced by GHGAP and DEFRA, the UK Department for Environment, Food, and Rural Affairs (DEFRA, 2012b; GHGAP, 2011). They underscore that there is no ‘one size fits all’ solution in this sector, particularly as environmental effects are difficult to isolate and measure (Table 2; UK 3). Second, these documents also highlight that many traditional farmers are expected to be reluctant to change, or at least only slowly adopt new technologies and approaches. Thus, change is not expected to occur simultaneously for the entire farming sector (ibid.). Third, current initiatives tend to focus on the farm level, which is considered rather narrow from the perspective of the broader agri-food sector. Indeed, the majority of stakeholders pointed out the urgency to design mitigation policies addressing the whole supply chain on both the demand and the supply side. Creating interlinkages along the supply chain was considered key in achieving progress in emissions reductions in the agri-food sector (Table 2; UK 9).

Table 2 Summary of stakeholder responses

Core issues discussed in the interviews	United Kingdom (UK)	Netherlands (NL)	Italy (IT)	Spain (SP)
1. Most important current mitigation measures in the agri-food sector	Improved resource efficiency and energy use at the farm level	Improved resource efficiency and energy use at the farm level	Incentives for renewable energy adoption	Those included in the CAP (but considered minimal nonetheless)
2. Most important current policy instruments supporting mitigation in the agri-food sector	Voluntary instruments (e.g. Greenhouse Gas Action Plan) under the UK’s Low Carbon Transition Plan	Agro-covenant Subsidies (including the Stimulation of Sustainable Energy Production scheme for renewable energy production) Voluntary instruments (e.g. labelling schemes)	Regional Development Plans Voluntary instruments (e.g. ‘Campagna Amica’ for enhancing consumption of locally produced food)	Subsidies; (simplified) labels
3. Evaluation of environmental effects of these policy instruments	Difficult to isolate and measure	Evidence for N2O and CH4 emissions reduction; but rise of CO2 emissions Energy savings	Limited known impact	Limited known impact
4. Evaluation of economic costs and benefits of these policy instruments	No concrete assessment available but varying perceptions regarding cost-effectiveness	Evidence for static-efficiency at the farm level	Limited information	Limited information
5. Evaluation of equity and fairness concerns associated with these policy instruments	Consumers and (inefficient) farmers are considered rather disadvantaged	Overall not an issue of concern, but farmers tend to bear most of the costs	Small producers and cooperatives are considered disadvantaged (due to price considerations)	Extensive farmers and consumers are considered disadvantaged (due to price considerations)
6. Evaluation of the current instrument mix to mitigate climate change in the agri-food sector	Not optimal	Not optimal	Not optimal	Not optimal
7. Vision of the most desirable instrument mix	Goal-oriented approach where the government sets the goals and the supply chain has freedom to choose how to implement them Communicative instruments aiming to raise awareness and knowledge transfer Introduction of ‘trigger points’	Regulation to curb emissions and stimulate innovation Creation of farm-related goals (including carbon capture and sequestration) Information instruments aiming to change diet	Incentives for primary sustainable practices and organic agriculture Inclusion of carbon capture and sequestration Development of sectoral quantification of emissions targets Penalties for polluters and major emitters by rising energy costs (but low penalties for those who cannot cover their management costs) Information and education campaigns focusing on product ‘traditionality’ No legislation with unfeasible requirements in practice	Inclusion of carbon capture and sequestration Energy efficiency and renewable energy in farms and transportation Information instruments aiming to change diet and consumption patterns Importance of policy coherence, transparency, and monitoring
8. Opportunities and constrains in the realization of the desired instrument mix	Arbitrary targets; complicated policies; lack of political will; limited research are considered constraints	Slow advance of new insights; lack of awareness, knowledge, and vested interests are considered constraints	Lack of reference standards/database on emissions by sector; lack of a network between farmers, agro-industrial producers, traders, and consumer; bureaucratic and regulatory constraints; limited accountability mechanisms are considered important constraints Reconsidering the concept of waste by making it another ‘product’ in the supply chain	Lack of overall planning and direction; stakeholder consultation; limited financial resources are considered major constraints CAP reform is considered an opportunity by some and a lost opportunity for real reform by others
9. Other comments/suggestions	Need for a cross-sectoral approach and large-scale industry engagement Need for EU-wide level playing field in the agri-food sector	Need for an integrated, supply chain approach Need for a level playing field between richer and poorer countries	Take into account the potential trade-offs between food security and environmental interventions (as the latter could result in higher food prices) Need to target the entire supply chain and foster policy coherence Need for a level playing field between richer and poorer countries

Regarding cost-effectiveness, governmental stakeholders and the private sector underlined its relevance as farmers, in particular, require financial viability in order to be able to invest in the future, including investments in mitigation strategies. Regarding economic instruments, governmental stakeholders emphasized that policies should avoid putting taxes on farmers, for example, for fertilizer use, as this would probably result in higher prices, leading consumers to buy imported goods. Instead, improved efficiency via better management was favoured. Further, farmers’ representatives cautioned about the need for differentiation. More specifically, they advised that cost-effectiveness efforts should take into account the limits of different farming systems as not all farmers can be expected to deliver the same level of mitigation (Table 2; UK 4).

As far as feasibility is concerned, stakeholders invited attention to considering the interaction between environmental and social concerns, as well as among environmental concerns. In this context, it was pointed out that policy measures cannot be evaluated as ‘good’ if they reduce GHG emissions, but at the same time lead to other unintended consequences, such as an increase in water use (Table 2; UK 3). Further, it was suggested that mitigation or other environmental measures need to be translated into an increase in shareholder benefits as companies are not expected to act responsibly in the absence of financial incentives. Retailers underlined the need for fair and equitable policies in the future, but also warned that reaching consensus along the supply chain about what constitutes equitable and fair measures in addressing climate change concerns would be difficult (Table 2; UK 5). In this context, it was pointed out that the best way to achieve fairness is the provision of an EU-wide level playing field in the agri-food sector. This was considered particularly important for the UK whose main trade partners for agri-food products are EU Member States (Table 2; UK 9).

When asked about their future preferences, voluntary approaches coupled with targeted regulation to achieve emissions reductions were in general favoured by all stakeholders (Table 2; UK 7). Communicative instruments fostering knowledge transfer to create awareness of best practices in the supply chain were particularly embraced. In addition, more research and more public procurement were also advocated. Retailers further emphasized the desire for the development of a goal-oriented approach, specifically the setting of overall targets by the government allowing the supply chain leeway on how to achieve these targets. In this context, it was argued that the ‘levels of ambition’ of any policy framework should only be high enough to allow voluntary initiatives the ability to respond. As a correcting mechanism, it was suggested that the government should set ‘trigger points’ if targets were not met to address any deficiencies. Other stakeholders, in contrast, were sceptical about the role of governmental policies overall and would like to see the government supporting rather than directing industry.

Summing up, according to the stakeholder interviews, no satisfying climate mitigation policy mix for the agri-food sector is in place at the moment, in the UK. The voluntary industry-led initiative GHGAP is currently the main measure addressing the agriculture sector directly, but, at the time of this study, no measurable GHG emission reductions have been reported. Cost-effectiveness or the economic side of the notion of optimality was considered fundamental for warranting the actual implementation of policy, as supply chain actors are driven by financial incentives. Environmental effects were considered important, but only after cost-effectiveness is ensured. The development of voluntary initiatives within the context of a broader public framework was advocated by the stakeholders as the best approach to achieve climate change mitigation. In this context, an integrated environmental approach, interlinkages along the supply chain, and distributive fairness were proposed as key issues policy makers should take into account to ensure climate policy optimality in the agri-food sector (Table 2, UK 9).

3.2. The Netherlands

Interviewees highlighted that the Netherlands has had active energy-efficiency policies in greenhouse horticulture since 1993 (Table 2; NL 1, 2). These policies had the form of negotiated agreements between the government and the sector and were supported by subsidies and tax incentive schemes. Covenants are a popular policy instrument in the Netherlands, fitting well in the so-called Dutch polder-model of intensive dialogue between public and private stakeholders. The most important current covenant is considered to be the Agro-covenant (Ministry of Agriculture, Nature and Food Quality, 2008), which includes agreements on detailed targets for 2020 for GHG emission reductions, the generation of renewable energy, and energy savings between the government, primary agricultural and forestry sectors, and associated manufacturing sectors. The overall targets of the agreement are to reduce the emissions of GHGs in 2020 by at least 30% in comparison to 1990; to supply 200 PJ of renewable energy in the form of biomass, biogas, and wind (one-third of the national target of renewable energy for 2020); and an energy-efficiency improvement of more than 2% per year. A recent evaluation of the covenant (RVO, 2014) showed that the targets were already almost met in 2012, except for the renewable energy target. Policy instruments employed in the covenant include regulations, subsidies, tax incentive schemes, the promotion of research and development, and knowledge dissemination.

Regarding environmental effectiveness, almost all stakeholders noted that energy savings and reduction in GHG emissions have been achieved to some extent (Table 2; NL 3). Opinions differed, however, on how this has taken place. According to expert and governmental stakeholders, the decrease in GHG emissions in primary production cannot be entirely attributed to specific climate change policy instruments, but rather to manure regulations, milk quota, reduction in cattle numbers, and general technological improvements. The employers’ association, too, found it difficult to attribute GHG emissions reductions to specific instruments. NGOs were hesitant in their comments. While acknowledging that there have been emissions reductions in agriculture, they emphasized these reductions were suboptimal because of the lack of policies that affect consumption. In a similar vein, one NGO representative argued that many policies were counterproductive, referring to manure injection techniques and to EU policies on farm enlargement, which would typically lead to enhanced soil degradation.

When it comes to cost-effectiveness, governmental representatives in particular commented that regulatory standards, applied to some extent in greenhouse horticulture, were considered effective when technology neutral, directed towards specific targets, generic in nature, and properly enforced (Table 2; NL 4). Fiscal incentives and subsidies were generally considered effective in stimulating technologies at the stage of innovation and initial market introduction. Likewise, subsidies on renewable energy were considered to function well, with little administrative burden. In contrast, farmer representatives considered many of the present policy instruments very costly (e.g. manure injection legislation has increased the administrative burden). Likewise, they expressed concerns about the magnitude of upfront investments required specifically for energy-saving, even though the latter could reduce costs in the long run. Moreover, they mentioned that returns on investment in primary production are very low (almost zero or even negative) compared to industry, and margins are small. Information and education were considered effective when constituting cheaper routes to emissions reduction of which the parties in question are unaware. The comments from the manufacturing and retail sectors ranged from ‘difficult to say’ to ‘climate change policies should be more than an economic business case only’ and also that ‘there are often unexpected benefits on the way too’. There were also critical remarks on the use of subsidies for the future, specifically caution for creating wrong incentives, market distortions, and focusing too little on innovation.

Regarding feasibility, in general, and fairness, more specifically, some stakeholders considered current policies as ‘fair’ and ‘balanced’ or dismissed the question of fairness as ‘no issue, because every farmer who wanted could benefit’ (Table 2; NL 5). However, a farmer representative pointed out that specific measures, like abandoning the tax incentive on diesel, put the bill on the farmers, meanwhile creating an uneven playing field within the EU. According to one expert stakeholder, farmers bear most of the costs. From a slightly different perspective, one NGO added that with the present policies both primary producers and consumers were the losers, while banks, upstream suppliers, manufacturing, and supermarkets were the winners. According to manufacturing representatives, the issue of ‘who will bear the cost’ deserves further attention as, in the end, the cost is or will be paid by present or future consumers anyway.

Overall, the majority of stakeholders do not consider the current policy mix to be optimal (Table 2; NL 6). According to a number of stakeholders, a major constraint towards an optimal policy mix is a general negation of the climate issue among business actors for which awareness raising is necessary. A retailer emphasized that consumers are currently more interested in price than in sustainability issues. Other constraints that were mentioned were vested interests and a lack of knowledge, particularly with respect to emissions by dairy farms, the nutrient chain, carbon footprints, and the bio-based economy.

Finally, a number of stakeholders highlighted the need for public regulation to curb emissions and to stimulate innovation (Table 2; NL 7). In this context, the need for developing farm-specific goals was also underlined. Eco-labels and information campaigns were strongly supported by the NGOs. While the retailers were not against labelling schemes, they expressed the need for them to remain informative rather than directive (‘informed, not edited choice’). In contrast, manufacturers warned against an early adoption of labels, as long as consensus on what type of information should be communicated to consumers has not yet been reached. Stakeholders also stressed the need for integral, not piecemeal, legislation. A shared opinion among all stakeholders was the need to introduce policies and initiatives that target the entire supply chain (Table 2; NL 9).

3.3. Italy

According to the majority of the stakeholders, the Italian government has failed so far to provide a coherent, effective, and transparent strategy to reduce emissions deriving from the agri-food sector, rather delegating it to regional governments. Indeed, Italy’s large regional geographic and socio-economic discrepancies have led to a major devolution of legislative and administrative responsibilities to subnational levels of government after the constitutional reform, approved by Parliament in 2001 (constitutional law nr. 3 of 2001). Regarding environmental management, this has favoured the development of regional initiatives that helped to improve environmental performance in some locations. Simultaneously, however, it also created ambiguities about the respective roles of national and regional levels of government, and tended to increase inconsistencies in the transposition of EU environmental directives. Accordingly, studies show that as a result, environmental policy has remained fragmented and with a short-term focus (OECD, 2011).

Regarding the agri-food sector, more specifically, interviewees point to the development of Rural Development Plans (RDPs) during 2007–2013 in terms of promoting organic farming, integrated production, soil conservation techniques, extensification of pasture management, and conservation agriculture (Table 2; IT 2). Biogas, in particular, has also been supported by the Legislative Decree 28/2011, which refers to the application of feed-in-tariffs also to biogas plants that are owned by farms or managed in connection to agricultural, food processing, farming, and forestry enterprises. According to our interviews, the incentives for biogas production are especially appreciated by the farmers who see in this a new source of income diversification and the possibility of long-term benefits (Table 2; IT 1).

In addition, the Italian government has initiated a pilot project regarding the identification and implementation of measures for the reduction of GHG emissions. The programme was initiated in 2011 to encourage sustainability investments in different productive sectors. The Ministry co-financed 22 companies (the majority of which were from the agri-food sector) with a total amount of 1.6 million EU€ in 2013 (Ministero delle Politiche Agricole, Alimentari e Forestali, 2012). In addition, a number of voluntary private-led initiatives can be identified in Italy. Examples are ‘COOP for Kyoto’, which started in 2006, as a voluntary agreement between retailers and producers in which suppliers of branded products were invited to adopt measures to reduce energy; and ‘Campagna amica’ (Friendly Farm), which aims at encouraging consumers to buy locally grown products, hence shortening the supply chains and avoiding emissions from the transportation of products. Although such initiatives do not target solely GHG emissions reduction, they might contribute to curb the emissions in the long run by educating consumers, according to our interviews (Table 2; IT 2).

In evaluating the environmental policy output in Italy, a trend was noticed towards decentralization, and a mix of initiatives from public as well as private actors. The actual effects of these initiatives, however, in terms of emissions reduction (environmental effectiveness) are difficult to evaluate (Table 2; IT 3). In this context, a number of respondents identified a real gap in accessing detailed and reliable data on emissions from the agri-food sector, as well as information regarding farming management practices that could lead to emissions reduction. Respondents attributed this gap to the high costs of measuring, reporting, and monitoring activities.

An evaluation of cost-effectiveness appeared difficult for the majority of respondents (Table 2; IT 4). The difficulty was attributed to the fact that most of the current policies were not targeting exclusively emissions mitigation, but were intertwined with other aspects, such as increasing energy efficiency to save expenses. The same holds for energy-saving measures, or the increase in biodiversity to improve health and maintain product variety.

Questions regarding feasibility and, particularly, fairness required in the majority of cases some additional explanation (Table 2; IT 5). Currently, the most disadvantaged are considered the primary producers as they have to undertake the majority of efforts. Moreover, stakeholders stressed the need to evaluate carefully measures such as adding the cost of carbon to the value of an end product as this would likely be carried by the consumer.

Regarding the vision for the future, different perspectives could be identified. Farmers’ representatives deem it necessary to realize GHG reduction targets through incentive schemes instead of stricter regulations (Table 2; IT 7). Further, they argue that the mitigation potential of agriculture should be taken into account when setting targets for emissions reductions, and the burden of the costs in implementing these measures should be equally distributed throughout the supply chain. In addition, the need to develop quantifiable sector-wide emissions targets and the inclusion of carbon capture and sequestration were mentioned as important measures, too. Moreover, the need to penalize polluters and major emitters by rising energy costs, while simultaneously avoiding or adopting low penalties for small businesses was also proposed. From the retailers’ perspective, mitigation measures should remain primarily voluntary. The need for an overarching target set on a national base was considered to favour coordination and was thought to result in a concerted aim shared by more stakeholders which could increase the effectiveness of measures. From the Ministry of Agriculture, Food, and Forestry point of view, there is a need to simplify the current mix of instruments and check its feasibility with regard to bureaucratic burden. Regarding information and labelling schemes, the Ministry is under the impression that the sensitivity of the Italian consumer to the issue of climate change is limited and they would be more effective if the focus was on the ‘traditionality’ of the product.

Concerning the experts’ point of view, the accent should be put on communication campaigns to influence consumer choices towards more sustainable consumption patterns, and to policies encouraging the uptake of new technologies by actors along the food chain, particularly to improve manure management and fertilizer use in agriculture and energy efficiency in the food processing and distribution phases. Additional recommendations included the improvement of policy coherence, adoption of a supply chain approach, while at the broader EU level, levelling the playing field between richer and poorer countries (Table 2; IT 9).

Summing up, a number of policies and initiatives addressing directly or indirectly emissions from the agri-food sector can be identified in Italy. However, their mix is not considered optimal. Indeed, the complex relationships among environmental, economic, and social dimensions that come into play make an integrated approach to policy essential in order to achieve mitigation goals, by avoiding counterproductive effects within the system. Such an approach is currently missing in the Italian agri-food context. Individual initiatives from both private and public sectors are not coordinated in a concerted way, and ambiguities between national and regional levels of responsibilities create barriers to the transparent implementation of policies.

3.4. Spain

Stakeholders found it difficult to identify the most important GHG mitigation measures in the agri-food sector in Spain (Table 2; SP 1, 2). On the one hand, they found it encouraging that the government adopted a reporting system for GHG emission reductions (incorporated in the annual National Inventory report). On the other hand, however, the environmental results of the policies in place were evaluated as limited in scope and lacking precision in measurement. Most stakeholders found it difficult to evaluate the extent to which measures that promote, for example, conservation agriculture (minimum or zero tillage), carbon capture, and the reduction of energy consumption have contributed to GHG reductions. Thus, overall environmental effectiveness was difficult to assess (Table 2; SP 3). The importance of having environmental targets in place was commonly recognized as a driver for future initiatives. In this context, stakeholders pointed out the successful voluntary initiative of retailers to reduce the use of one-time-use plastic bags set as a target in the National Environmental Plan, which led to 80% reduction in the use of these bags. Similar initiatives could be developed for climate mitigation purposes, stakeholders argued.

The cost-effectiveness of the current policy mix in agri-food was also difficult to measure (Table 2; SP 4). Most of the interviewees avoided giving an answer to this question for lack of sufficient expertise. An additional difficulty mentioned was the systemic influence of different instruments’ costs and benefits. For example, fertilizer reduction would produce the benefit of fewer expenses for the farmers and benefits for soil fertility. However, precisely because the farmers would need to develop alternative ways to ensure fertility of soils, costs could increase, which makes it difficult to give a fair estimate.

In terms of political feasibility, particularly on the issue of fairness and equity, stakeholders were unanimous in that in the current situation, the farmers are the most disadvantaged (Table 2; SP 5). Accordingly, there was agreement that the government should not adopt instruments that would deteriorate farmers’ livelihoods, by making investments too expensive, reducing productivity and sales. Stakeholders also argued that consumers may also be disadvantaged, as in most cases, they have to pay the price through more expensive products as well. In contrast, the retailers and the distribution chain between farmers and consumers were considered to benefit the most by getting the most profit.

Regarding the future, and given their dissatisfaction with the current situation in Spain, stakeholder suggestions covered a variety of issues (Table 2; SP 7). First, the coordination between departments, ministries, sectors, and national and EU governments was considered one of the most important issues for improvement in future climate policy in the agri-food sector in Spain. In this context, stakeholders underlined the importance of integrating current environmental standards, rules for water quality and residues, and food waste policies that could achieve GHG reduction with climate policy instruments. Likewise, the reformed Common Agricultural Policy was considered by some as an opportunity to address climate change mitigation in the agri-food sector, while by others (particularly NGOs) as a lost opportunity for real reform (Table 2; SP 8). Second, the proper implementation of policies was considered crucial. Transparency within the food chain and better monitoring and reporting were emphasized as particularly instrumental, yet highly problematic elements at the moment (Table 2; SP 7).

Third, the need to re-establish financial resources and subsidies for renewable energy that were cut by the austerity policies of the conservative government was also considered crucial (Table 2; SP 8). Fourth, improving and increasing consultation with different stakeholder groups was highly recommended (Table 2; SP 8). Stakeholders reported that the process of consultation between the government and other stakeholders started very recently, at a slow pace, and some stakeholder-organizations have never been reached. To illustrate, the Cooperativas Agro-alimentarias, an organization representing almost 3000 cooperatives in all the Autonomous Communities, has never been approached for consultation.

Regulation as an instrument was rejected by the majority of stakeholders because it was considered to burden the business sector and harm competitiveness. Likewise, a dietary shift towards less meat consumption was also considered problematic due to cultural constraints and because a change in diet was not promoted enough. Finally, information campaigns were considered vital for the future climate policy mix.

In sum, the stakeholder analysis from Spain highlighted that there is not yet an integrated policy on the mitigation of agricultural emissions. Stakeholder suggestions for the future climate policy mix in Spain are the coordination of policies and consultation with stakeholders.

Stakeholder responses are summarized in Table 2.

4. Conclusion

This study examined stakeholder perspectives on the ‘optimality’ of the climate policy mix in the agri-food sector in the EU using the criteria of environmental effectiveness, cost-effectiveness, and political feasibility. Our stakeholder analysis from four selected Member States highlighted that the current policy mix, if any, is not considered optimal in all cases under study. Although the analysis is limited in terms of both selected countries and number of stakeholders interviewed, it is representative in both respects. Accordingly, the results of this analysis while limited in scope are also illustrative of the situation in different counties of the EU regarding the current state of affairs as well as the feasibility of the future implementation of an optimal policy mix. Given the diversity of national contexts and opinions expressed, it is difficult to propose an integrated approach for the future. However, some commonalities can be identified in all cases.

First, regarding environmental effectiveness, the need to develop policies that target the entire supply chain in an integrated manner and the need to avoid a piecemeal approach, limited in scope and comprehensiveness (i.e. addressing some environmental issues but not others, or neglecting the interaction between environmental and social issues), were considered important.

Second and related, the role of government was considered crucial, but only in terms of providing a general framework within which voluntary approaches could develop. In this context, taxes and subsidies were, in general, less favoured, while the provision of other financial incentives supporting savings and efficiency was considered more important. This confirms earlier findings (e.g. Grosjean et al., 2016) of important political and other barriers to the implementation of potentially cost-effective market-based instruments in agriculture that should be taken into account in their design. Further, communicative instruments, such as labelling and certification schemes, were advocated, but with caution, taking into account that they are expensive and cannot be implemented by all and taking care not to be too directional but informative instead.

Third, regarding political feasibility, the significance of fairness and distributive justice was raised by several stakeholders. Farmers, and sometimes consumers, were considered the most disadvantaged stakeholder groups by current policies in terms of bearing the costs of implementation, while other supply chain actors, in particular retailers, were considered major beneficiaries. Accordingly, the need for the development of an EU-wide policy for climate change mitigation in the agri-food sector that would provide a level playing field for EU farmers was emphasized in all cases.

Acknowledgements

We acknowledge valuable research assistance by Carlijn Ginther, Obe de Vries, Stella Wirth Benedetti, and Ilyana Arnaudova.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This research has been funded by the European Commission [grant number 308680] and is part of the CECILIA2050 project.

Notes

† A previous version of this article has been delivered in the form of a report to the European Commission (CECILIA Report on Food and Agriculture: The Current Policy Mix, Task 2.4).

1. The baseline scenario assumes a global GDP growth of 2.8% per annum over the period 2005–2050.

2. The INDC commits to a domestic reduction in GHG emissions of at least 40% by 2030. This is equivalent to the ambition expressed in the Roadmap that includes a 36–37% reduction in agricultural emissions by 2030.

3. We were able to secure fewer interviews in Spain in relation to the other three countries. However, we consider the insights gained from these interviews extremely relevant for our research.

4. Retrieved October 6, 2015, from, http://www.sruc.ac.uk/climatechange/farmingforabetterclimate/.

5. Retrieved October 6, 2015, from, http://gov.wales/topics/environmentcountryside/farmingandcountryside/farming/landuseclimatechangegroup/?lang=en.

6. Retrieved October 6, 2015, from, http://www.doeni.gov.uk/northern_ireland_action_plan_on_greenhouse_gas_emissions_reductions.pdf.

Appendix 1. Stakeholders interviewed in the selected countries

Table

Stakeholder group	UK	Netherlands	Italy	Spain
Private sector	Waitrose Marks and Spencer	AHOLD	Coop Italy
Interest groups	NFU Linking Environment and Farming (LEAF)	Netherlands Dairy Farmers Union (MLV) Product Board Horticulture (primary production) Product Board Animal Feed Industry and employers association VNO/NCW Federation of Netherlands Food and Groceries Industries (FLNI) Food Retail Association (CBL) Society for Nature and Environment (Stichting Natuur en Milieu) Network for Vital Agriculture and Food (NVLV)	NFU (Coldiretti) Association of Agri-Cooperatives for Rural Development (Legacoop Agroalimentare) Slow Food Italia	Spanish Agri-food Cooperatives Spanish Association for Distribution, Auto services and Supermarkets Birdlife Spain WWF Spain
Experts	Committee on Climate Change (CCC) Food and Climate Research Network (FCRN) Scottish Agricultural College (SAC) Carbon Trust Ricardo-AEA	Netherlands Environmental Assessment Agency (PBL) Centre for Agriculture and the Environment (CLM)	National Institute for Agricultural Economics Research (INEA) National Agency for New Technologies, Energy and Sustainable Economic Development (ENEA) Forestry and Environment Institute (IPLA) Euro-Mediterranean Centre for Climate Change (CMCC)
Governmental agencies	DEFRA Department for Energy and Climate Change (DECC)	Ministry of Infrastructure and Environment (Dep. of Climate, Air and Noise) Ministry of Economic Affairs	Ministry of Agricultural, Food, and Forestry Policies (MIPAAF) Food and Agriculture Organization (FAO)	Ministry of Food, Agriculture, and Environment (Office for Climate Change)

Appendix 2. Stakeholder questionnaire

Table

#1.	In your view, which are the most important mitigation measures on climate change in regard to the agri-food sector?
#2.	What are the most important policy instruments in realizing these measures in your view that are in place at the moment?
#3.	How would you classify and evaluate the environmental effects/results of these policy instruments?
#4.	How would you classify and evaluate the economic costs and benefits of these policy instruments?
#5.	How would you evaluate equity and fairness concerns, associated with these policy instruments?
#6.	Given your previous responses, do you think this is the best instrument mix to mitigate climate change in the agri-food sector?
#7.	If not, what would be the most desirable instrument mix in your view? Why?
#8.	How can your desired instrument mix be realized? Which are the major constraints and opportunities towards achieving such a mix in your view?
#9.	Do you have any other comments or suggestions on the issue of policy instruments in the agri-food sector in regard to climate change?