Alan Matthews: Price incentives needed to reward farmers who take decisive climate change actions

Agriculture accounts for one-third of Ireland's total GHG emissions
Agriculture accounts for one-third of Ireland's total GHG emissions

Alan Matthews

Agricultural emissions in Ireland are largely a methane problem associated with ruminant livestock production. Total agricultural emissions measured in tonnes of carbon dioxide equivalent (CO2 eq) amounted to just over 20.2m tonnes in 2017, or 33pc of total national emissions.

Around 13m tonnes of this are due to methane arising from enteric fermentation (11.5m tonnes CO2 eq) and manure management (1.5m tonnes). The remaining 6.3m tonnes are accounted for by the release of nitrous oxide following the application of manure and fertiliser to agricultural soils.

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Total methane emissions from agriculture rose in the period 1990-1998, then fell in the period to 2011 after which they started to rise again. In 2017, methane emissions were 2pc above their 1990 level.

Methane is a potent greenhouse gas. It is estimated to be 84 times more potent a warming agent than CO2 over a 20-year period, and 28 times more potent than CO2 over a 100-year period. In addition to its significant climate impacts, methane contributes to the formation of ground-level ozone, so there are health benefits from its reduction.

Methane has another important difference with CO2. For all practical purposes CO2 essentially stays in the atmosphere once it is emitted, but methane although a more powerful climate change agent disappears after around 10 years.

The rate at which global warming occurs is directly related to the amount of CO2 emitted. This is not the case for methane because of its short lifetime in the atmosphere. For methane, temperature change is a function of the rate at which methane emissions are changing, and not to the actual amount of methane emissions.

This means that if methane emissions are stable over time, they do not contribute to increased temperature. If methane emissions increase in a sustained manner, that increase has a very large impact on future temperature and much larger than a unit increase in CO2. Conversely, if methane emissions decrease in a sustained way, this will contribute to global cooling.

Methane emissions from Irish agriculture remained more or less stable over the period 1990-2017. This means that agricultural methane has not contributed to global warming over this period.

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But this does not mean that we can ignore the potential to reduce methane emissions. Lower methane emissions mean lower future temperatures, provided CO2 emissions are also falling.

The recent Intergovernmental Panel on Climate Change (IPCC) 1.5° report points out that to stabilise temperature at increases well below 2° will require both near zero net emissions of long-lived greenhouse gases and deep reductions in short-lived emissions such as methane.

From an Irish perspective, agricultural methane emissions alone contribute 30pc of the emissions covered by the EU 2030 target for the sectors outside the Emissions Trading System (ETS). The Irish target is to reduce non-ETS emissions by 20.5pc in 2030 compared to 2005 if all flexibilities are used, or by 30pc otherwise. It is hard to see how this target can be achieved without some reduction in methane emissions in absolute terms.

The Citizens' Assembly recommended that financial penalties and rewards should be introduced to incentivise the necessary changes in farm practices. The Oireachtas Joint Committee on Climate Action is currently discussing its recommendations with stakeholders.

Carbon leakage

The farm organisations have strongly opposed the recommendation in their evidence to the committee, largely on the grounds that it would lead to carbon leakage if it meant production simply shifted to other countries with possibly higher emissions per unit of output.

The intention of the recommendation is to reduce emissions, rather than to target production as such.

Its purpose is to provide a signal and an incentive to farmers to act, rather than to raise money for the government.

It is difficult to reduce agricultural methane emissions. Although research is continuing into methane-reducing technologies like a methane vaccine and inhibitor from grazing systems they do not yet exist.

Yet there are differences even between farms in the same system in the carbon intensity of production. If all farmers could be brought up to the same performance level as the top third, emissions savings could be made.

The Teagasc/Bord Bia Carbon Navigator identifies win-win measures that farmers could take, but it has no mechanism to encourage farmers to adopt its recommendations. Even though profitability would improve, we know not all farmers will make use of these opportunities. This is the rationale for the Citizens' Assembly proposal.

Price signals

One way in which a price signal - which is a very powerful motivator of changes in behaviour - might be introduced which would avoid the carbon leakage objection would be to apply a bonus/malus system to product prices depending on a farmer's emissions performance relative to a national reference standard (initially set equal to the national average value).

For example, dairy farmers whose carbon footprint per kg of product was lower than the reference standard for milk would gain a premium in their milk cheque, while those with a higher carbon footprint would be penalised.

As and when new technologies became available, the reference standard would be lowered to provide a continual incentive for improvement.

Where farmers were able to show carbon offsets, such as through tree planting or the conversion of methane to biogas, this should be included as part of their credits.

I don't underestimate the practical difficulties of implementing such a system, but we need to think out of the box if we are to get agricultural emissions on to a downward trajectory.

Alan Matthews is Professor Emeritus of European Agricultural Policy at Trinity College Dublin

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