Why not count emissions for exported produce where it is consumed?

The programme of government commitment to review greenhouse gas emissions on a consumption basis could be a game-changer, writes Stephen Cadogan
Why not count emissions for exported produce where it is consumed?
Should emissions be counted and any carbon tax paid for Irish foods in the country where they are consumed, as is the case for imported fuel in Ireland? The new government here has committed to review greenhouse gas emissions on a consumption basis.
Should emissions be counted and any carbon tax paid for Irish foods in the country where they are consumed, as is the case for imported fuel in Ireland? The new government here has committed to review greenhouse gas emissions on a consumption basis.

The programme of government commitment to review greenhouse gas emissions on a consumption basis could be a game-changer.

The three government parties said they are conscious of the limitations of examining greenhouse gas emissions solely on a production basis.

The goal of the promised review is to ensure that Irish and EU action to reduce emissions supports emission reductions globally, as well as on our own territories.

Perhaps the government is also looking over its shoulder at EU plans for a carbon border tax.

Greenhouse gas emissions can be addressed at the point of production and consumption of goods and services.

Many believe consumption-based policies are crucial for globally effective action on greenhouse gases.

Whether the focus is on production or consumption is a very important question for the economy, including agriculture. Research in Austria showed that its biggest gas emitters in consumption-based accounting were construction, public administration, and the wholesale and retail trade.

In contrast, its biggest gas emitters in production-based accounting were electricity, iron and steel, and cement.

More than 60% of consumption-based emissions were found to occur outside the country’s borders, and 34% were even outside the EU.

It was found that production-based approaches can work well for electricity, but emission reduction in sectors such as electronic equipment is crucially dependent on consumption-based approaches.

The Government says it will bring all communities with it in a manner which ensures a rapid reduction in and then reversal of our impact on the climate.

A cornerstone of its programme is the commitment to an average 7% cut in greenhouse gas emissions per annum, equating to a 51% reduction over the next decade. There is very little firm information on how the 51% emissions cut might be achieved in agriculture. And the promised review of greenhouse gas emissions on a consumption basis clouds the picture even more.

Nevertheless, there is a strong case for ending the limitations of examining greenhouse gas emissions solely on a production basis.

What is wrong with examining greenhouse gas emissions solely on a production basis was spelled out by economist Colm McCarthy in a recent Irish Farmers Journal article.

He said it is “nuts” that the emissions behind Irish dairy products consumed in Saudia Arabia are counted in Ireland, same as the emissions for a litre of diesel a resident in Ireland burns while driving their car.

He said emissions should logically be based on consumption, not production, and the consumption of anything should involve incurring emissions tax. That way, production will gravitate towards the least cost countries, with the environmental negatives fully accounted for through carbon taxes in the country of consumption.

In other words, consumers everywhere need to be penalised for choices that are environmentally damaging.

That isn’t happening.

It’s yet another hole that can be picked in how Ireland and the EU try to take climate action.

Maybe, there’s hope that we can get our emissions below those of Los Angeles, by counting them correctly.

Delegates to a prestigious US agri-food conference in May were shocked to hear that Ireland, with a population of 4m, has been given a bigger carbon footprint than Los Angeles, with 13m people. It’s because the current greenhouse gas assessment methodologies are flawed, said Dr Frank Mitloehner, at the Alltech ONE Virtual Experience.

He said current methodologies do not include the real warming impact of methane (emitted by livestock), and leave out the vast sequestration potential of grasslands, soils, and forests, of which Los Angeles has none, and Ireland a lot.

More than 23,000 attendees for the virtual conference, from 118 countries, heard Los Angeles has carbon emissions per year rated at 50m tonnes, and Ireland 60m tonnes. That was the scientists’ viewpoint, from Dr Mitloehner, a professor and air quality specialist at the prestigious University of California Davis.

And the economist’s viewpoint, from Colm McCarthy, is that the emissions for the portion of our agricultural production which is exported (about 90% of our beef and dairy, for example) should be counted where it is consumed.

And the EU leader’s viewpoint is that there is no point in only reducing greenhouse gas emissions in the EU, if we increase the import of carbon footprint from abroad. That’s what EU Commission President Ursula von der Leyen told the World Economic Forum last January.

She was introducing the Carbon Border Adjustment Mechanism designed to protect EU businesses and workers from unfair competition.

A Carbon Border Adjustment Mechanism would prevent carbon-intensive industries moving abroad to economies that do not tax or otherwise put a price on emissions, by imposing a border carbon tax.

How might it affect agriculture and food? The answer is nobody knows, and it’s just one more riddle the industry here will have to try to work out as it plays its part in the plan to cut greenhouse gas emissions 7% per annum.

But farmers here might be more likely to make bigger efforts to cut carbon if there is a system in place to protect them from imports with a high carbon footprint.

From the farmer’s viewpoint, that might make up a little for the EU trying to sign a trade agreement with South American countries allowing Amazon deforestation for farming, even though they are Paris Agreement signatories.

But it may well be impossible to devise a fair border tax on food. Some foods have a supply chain including more than one country, what would be the tax rate?

Farms in the same country producing similar foods but with very different methods and different levels of carbon emissions would all be lumped under one carbon border tax rate of that country.

Who’s to decide if beef from grass-fed cattle is less carbon-intensive than from cattle grain-finished in feedlots?

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