Abstract
Rice production is affected by climate change, while climate change is simultaneously accelerated by methane gas (CH4) emissions from paddy fields. The rice sector must take suitable mitigation measures, such as prolonging mid-summer drainage (MSD) before the rice flowering period. To propose a mitigation policy, this study aims to demonstrate the environmental and economic effects of MSD in Japanese paddy fields by using a dynamic, spatial computable general equilibrium (CGE) model and crop model; the study also considers environmental subsidies with a carbon tax scheme to promote MSD measures. The results demonstrate that climate change under the 8.5 representative concentration pathway (RCP) scenario will reduce rice prices and rice farmers’ nominal income due to bumper harvests until the 2050s. Promoting MSD in paddy fields can prevent a decrease in farmers’ nominal income and effectively reduce CH4 emissions if all farmers adopt this measure. However, some farmers can potentially increase their own yield by avoiding MSD under high rice prices, which would be maintained through other farmers’ participation. A strong motivation exists for some farmers to gain a “free ride,” and an environmental subsidy with a carbon tax can help motivate farmers to adopt MSD. Therefore, the policy mix of prolonging MSD and environmental subsidies can increase all farmers’ incomes by preventing “free rides” and decrease greenhouse gas emissions with a slight decrease in Japan’s GDP.
Nominal Income Targeting