In the current context, it is vital to think about appropriate modalities to combat global warming and encourage sustainable growth over time. The recent discussion on reforming the Common Agricultural Policy (CAP) in order to protect biodiversity and preserve the rural environment requires us to consider whether coordinated agricultural policies in Europe can contribute to the provision of environmental common public goods, for example by reducing harmful emissions.
This paper examines the consequences of proposals to green the CAP for developing countries. When the new greening measures are binding and change the behaviour of EU farmers, this will reduce the production of European Union (EU) farmers in the short run, which could lead to increased commodity prices. This in turn would stimulate exports from developing country producers (by up to 3 per cent for certain countries and commodities) but harm food-importing countries. In the medium to long term, a reduction in emissions would reduce damage resulting from climate change in developing countries.