The complex regulatory space for market-based agricultural greenhouse gas emissions reductions in the EU: Qualitative considerations for future regulatory design

Over the past few years, the European Commission has been contemplating whether and how to regulate agricultural greenhouse gas emissions in ways that will meaningfully contribute to its efforts to meet its targets for reducing and mitigating greenhouse gas emissions in the EU. While political winds and appetites for ‘green’ policies in the EU may have shifted since the 2024 European Parliament elections, the Union remains legally obligated under its Climate Law to achieve climate neutrality by 2050. 11% of the EU’s total emissions have been attributed to its agricultural sector, although regulatory measures under a patchwork of overlapping and not always coherent regulatory controls have failed to reduce agricultural emissions by any meaningful or significant degree. To date, the most effective vehicle for achieving emissions re- ductions in the EU has been the Emissions Trading System (ETS), however agriculture has nev- er been part of that remit. This article offers a contribution to ongoing discussions about whether linking agricultural emissions to market-based mechanisms like the EU ETS could be a possi- ble strategy for the EU to bring its agricultural emissions down. It looks to three jurisdictions that have attempted to this, namely: Australia, the state of California (USA), and the province of Alberta (Canada). In particular, this article is curious about the decision-making dilemmas that the Commission would face should it ever decide to legislate and regulate agricultural emissions this way. Based on interview data from those three jurisdictions, it depicts this deci- sion-making terrain in terms of a ‘complex regulatory space’ for agricultural emissions to iden- tify key trade-offs and balancing acts that the Commission would have to consider when de- ciding how to structure such a regulatory regime in a way that will be sustainable with con- stituency buy-in. The Commission should expect a plurality of different factors (the price of car- bon allowances, measurement technologies, food production cycles, farmer self-identification) to interact in complex ways that will make it challenging to strike the kind of balances that it will need to manage a stable regulatory order that will reduce agricultural emissions in the EU.