Alternative scenarios modelled by Climate Advisory Council in carbon budget report submitted to Government included use of negative subsidies to “engineer” reduction in herd
A tax on milk production and the use of negative subsidies to “engineer” a reduction in livestock numbers were among alternative scenarios modelled by the Climate Advisory Council in its carbon budget report submitted to Government last week.
The carbon budgets submitted by the Council are consistent with a 51pc reduction in greenhouse gases in 2030 relative to 2018 and, depending on the emissions cut allocated to agriculture, could have a significant impact on farm incomes and the rural economy.
In its technical report, the Council concluded that only relatively small reductions in agricultural GHG emissions can be achieved by currently proven technical mitigation and that a reduction in livestock numbers would be required to meet the core carbon budget scenarios it considered.
The Council modelled livestock number cuts of as high as 47pc, noting that such cuts would have a dramatic impact on farm incomes and the rural economy.
To achieve the livestock number cuts modelled in the report, alternative scenarios analysed by Teagasc altered the economic incentives to which livestock farmers respond.
Progressively larger negative subsidies were introduced so as to “engineer” a reduction in the volume of bovine agricultural activity required to lower agricultural emissions to target levels determined by the carbon budget scenarios.
Responding to queries from the Farming Independent on these incentives, Teagasc, through the Climate Advisory Council, said as things stand, market forces (international supply and demand for food) are not going to reduce the size of the agricultural sector in Ireland in the coming years.
It said domestic and export demand for milk products and beef — the two main sources of Irish agricultural GHGs — are expected to remain strong, so farmers are expected to continue to want to produce milk and beef.
“In some of the scenarios, our research tells us that we can’t expect large GHG reductions to be achieved using technical mitigation (science-based solutions) alone,” it said in a statement.
“Therefore were a large GHG reduction target chosen for agriculture, policies would be required to reduce the level of activity, since technical measures alone would not achieve such GHG reduction targets.
“There are all manner of policies that you could consider, but here purely for the purposes of exploring the scenarios, we looked at a policy that would lower milk prices (a tax on milk production that would make it less profitable) and negative subsidies (again an example of taxing production to make it less attractive).
“It is important to understand that this was purely an assumption made (in order to be able to conduct the modelling experiment) to determine how small the sector needed to become to fit inside the GHG constraints.”
Teagasc highlighted that the changes made to prices and supports did not form part of the economic assessment of the cost of reducing activity, since other non-tax-based policies could be used to achieve a similar outcome (such as a quota on animal numbers).
It said in a real-world context, actual policies to deliver lower levels of activity would require much more detailed consideration and it would be expected that a range of policy solutions would be explored before a policy decision would be made.