Greenhouse Gas Emissions and Eco-Performance at Farm Level: A Parametric Approach

Agriculture is an important source of greenhouse gas (GHG) emissions and thus contributes considerably to global warming. However, farms can vary substantially in terms of their climatic impact. So far, most policies aiming at reducing GHG emissions from farming have largely been based on findings at the aggregate level, without taking farm heterogeneity properly into account. This study seeks to provide a better understanding of the GHG mitigation potential at the micro-level. We develop a comprehensible analytical framework for analyzing economic-ecological performance by way of stochastic frontier analysis. We introduce the concept of emission efficiency, where we distinguish between persistent and time-varying efficiency. We further analyze farms with respect to their emission-performance dynamics. Results from our (2005–2014) empirical application from Bavaria—an important region for the EU – show considerable differences in farm-level GHG emissions across different farm types. The same applies to emission efficiencies. Overall, emission performance improved over time. The results have important climate-policy implications as they help to provide better target measures for mitigating GHG emissions from agriculture, without compromising economic performance levels.