Balancing Environmental Sustainability and Economic Viability in Luxembourgish Farms: An Agent-Based Model with Multi-Objective Optimization

To curb the impacts arising from the agricultural sector, the actions undertaken by policymakers, and ultimately by the farmers, are of paramount importance. However, finding the best strategy to reduce impacts, and especially assessing the effects of the interactions and mutual influence among farmers, is very difficult. To this aim, this paper shows an application of an agent-based model (ABM) coupled with life cycle assessment (LCA), which also includes multi-objective optimization of farming activities (including both crop cultivation and livestock breeding) from an economic and environmental perspective. The environmental impacts are assessed using the impact assessment scores calculated with the Environmental Footprint 3.0 life cycle impact assessment method and the study is conducted “from cradle to farm gate”. The model is applied to all the farms in Luxembourg, whose network is built utilizing neighborhood interactions, through which a parameter known as farmer’s green consciousness is updated at each time step. The optimization module is instantiated at the end of each time step, and decision variables (the number of livestock units and land allocation) are assigned based on profitability and specified environmental impact categories. If only profit optimization is considered (i.e., when farmers’ green consciousness is de-activated), the results show a 9% reduction in the aggregated environmental impacts (obtained as the Environmental Footprint single score) and a 5.5% increase in overall profitability. At the farm level, simulations display a clear trade-off between environmental sustainability and financial stability, with a 25% reduction in overall emissions possible if farming activities are carried out using the single score impact in the objective function, though this results in an 8% reduction in profitability over 10 years.