Having dragged its heels on climate change mitigation measures, presumably because the exchequer cannot currently afford to incentivise more of such measures, the government is unlikely to inflict further damage on the exchequer by taxing a productive indigenous industry such as agriculture, writes Stephen Cadogan.
Climate change mitigation is in the news since the citizens’ assembly considered the topic last week and made recommendations.
This gathering of 99 citizens, chosen to be broadly representative of the state’s population, received 1,200 submissions from advocacy groups and professionals and academics with experience and expertise on the topic, and from individuals with a concern for the environment.
Having discussed the topic ‘How the State can make Ireland a leader in tackling Climate Change’, over two weekends, the 99 made 13 recommendations agreed on by majority votes.
But how much did they take into account Ireland’s critical national debt burden and high debt-to-GDP ratio?
Maybe not much, because what looks like their most costly recommendation is a tax on agriculture, which is making an increasing contribution to the economy.
Whatever about the consequences of climate change for future generations, Ireland’s high level of debt must not be passed on to those future generations. Therefore, careful national budgeting is needed to reduce the debt burden, and for the moment, that leaves only limited room for public investment to address challenges such as Brexit and climate change.
It also leaves only limited room for taxing productive industries like agriculture which contribute to the economy.
So farmers were right to react defensively to the Assembly’s 89% support for a tax on greenhouse gas (GHG) emissions from agriculture, albeit balanced by rewards for farmers for land management that sequesters carbon, and any resulting GHG tax revenue to be reinvested to support climate-friendly agricultural practices.
Only 80% of the citizens said they themselves would be willing to pay higher taxes on carbon intensive activities, but a larger percentage would be happy to tax the business of farming.
Taxing farming is the most costly of their recommendations for the country, amid otherwise largely predictable recommendations.
It is worrying for farmers that a gathering of citizens broadly representative of the state’s population should take such a tack, at a time of progress for Ireland’s largest indigenous industry, growing 36% for both primary production and exports, and 47% for value added, over the past six to eight years.
Exports are expected to increase again this year.
So well done to Agriculture Minister Michael Creed for springing to the defence of agriculture, warning it has become a soft target for climate activists.
He knows only too well that agriculture is further down the road of climate change mitigation than most sectors of the economy, because it is built into the EU’s Common Agricultural Policy which bankrolls farmers.
Farmers themselves also reacted, with IFA President Joe Healy pointing out that Irish agriculture already has significant initiatives in place, and agricultural emissions have fallen by 6% since 1990, while farm output has increased by over 40%.
Taxing agriculture amounts to jumping the gun in a panicky reaction to climate change.
Instead, incentivising climate change mitigation should be the way forward in agriculture, as soon as the exchequer can afford to do that.
In this way, climate change can be mitigated by using more protected urea fertilisers, liming the land to reduce overall fertiliser use, using manure additives to reduce ammonia and methane, farming more efficiently to reduce methane, growing more forestry for carbon sequestration, and enhancing grassland and cropland carbon sinks.