One of the most serious externalities of agricultural activity relates to greenhouse gas emissions. This work tests this relationship for the Portuguese case by examining data compiled since 1961. Employing cointegration techniques and vector error correction models (VECMs), we conclude that the evolution of the most representative vegetables and fruits in Portuguese production are associated with higher controls on the evolution of greenhouse gas emissions. Reversely, the evolution of the output levels of livestock and the most representative animal production have significantly increased the level of CO2 (carbon dioxide) reported in Portugal. We also analyze the cycle length of the long-term relationship between agricultural activity and greenhouse gas emissions. In particular, we highlight the case of synthetic fertilizers, whose values of CO2 have quickly risen due to changes in Portuguese vegetables, fruit, and animal production levels.
Keywords: Agricultural externalities; Greenhouse gas emission; Portugal.