Japanese Direct Payment for Environmentally Friendly Farming and Evaluation of Its Environmental Impacts: Policy Analysis with an Environmental-economic Integrated Model Approach

Abstract

Governments implement various policy measures to improve the environmental performance of the agriculture sector, but their environmental impacts are difficult to assess quantitatively. This study analyzes the environmental performance of Japanese direct payment for environmentally friendly farming, by using the OECD's policy impact model. The results suggest that such direct payments can improve the level of nitrogen purification and carbon sequestration, while they increase the emission of ammonium. Policy measures bring several different impacts both to farm economics and the environment; thus it is important to understand their effects so as to improve the cost-effectiveness of agri-ennvironmental policy measures.