Carbon standards in agriculture and food trade


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At the Hague conference on Agriculture, Food Security and Climate Change, Farming First held a side event ‘Best practices in agricultural value chains’, where spokespeople presented examples of initiatives that aim to increase resilience and productivity at different points in the value chain.

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  • Why has dairy taken this path?
    There have been multiple drivers.
    The dairy sector is conscious of the challenges associated with meeting growing global food demand in the context of constrained natural resources and environmental limits.
    There is increasing public interest in how food is produced and the social and environmental impacts associated with that production. Reports like Livestocks Longshadow have jolted people to focus more on climate change.
    For Fonterra, an early driver of our interest in LCA’s was the foodmiles concept.
    Foodmiles is a great example of how a lack of understanding and knowledge can result in false conclusions about the sustainability of a product. It taught us that unless we did the work, these catchy buzz-word type concepts would gain credence with perverse outcomes for food production and consumption. Now we are pleased to say that LCA approaches are accepted.
    Robust and scientifically sound benchmarks are needed against which to measure our progress.  The old adage that you can’t manage what you can’t measure applies.
    What is new is that there is now a strong expectation from customers and public that we know what our carbon footprint is.
    The global dairy sector has committed - via the Global Dairy Agenda for Action on Climate Change - to undertake responsible action to reduce emissions.  One of the first deliverables under that Agenda is the standardised dairy methodology for carbon foot printing. This provides a tool by which to make and measure progress. It also provides the basis for an informed discussion with stakeholders and avoids the counter productive confusion which could arise from the use of multiple varying methods.
    At a company level, for Fonterra, the carbon LCA is a tool for identifying hotspots within our supply chain; an input into action plans to further lock-in efficiency gains; a means of monitoring progress and a basis for informed conversations with customers and stakeholders.
  • A key question is whether standards are the right vehicle to achieve the necessary reductions in greenhouse gases (GHGs).
    According to the Worldwatch Institute Report, June 2009, “innovations in food production and land use that are ready to be scaled-up today could reduce greenhouse gas emissions equivalent to roughly 25 percent of global fossil fuel emissions and present the best opportunity to remove greenhouse gases already in the atmosphere.”
    On the other hand, the Intergovernmental Panel on Climate Change’s (IPCC) Fourth Assessment Report has concluded that in the short term soil carbon sequestration (enhanced sinks) is the mechanism with the highest mitigation potential (89 percent).
    MacGregor 2010:9
  • If carbon is to be a persistent concern and private businesses are to be assessed according to their carbon emissions, then PVS will likely help identify hotspots and, where possible, reduce emissions. Private sector responses will include redirecting food supply chains to lower carbon alternatives and might include opportunities to offset outside their supply chains. The best chances for success are if resulting new business models can bring about cost savings or more efficient, secure supply chains. MacGregor 2010.
  • Food miles concept discredited for its partial focus on transport, ignoring factors of production and input supply
    Carbon Trust a leading UK based label
  • So what have we done?
    In 2008 Fonterra undertook work to develop a LCA methodology for measuring the carbon footprint of dairy products.
    This work was undertaken with assistance of a team of international experts, and taking into account the existing PAS 2050 and ISO LCA standards.
    It gave us an average carbon footprint for our products.
    It also confirmed the distribution of emissions across our supply chain; the majority of which sit on-farm and are animal related;
    Fonterra’s methodology then became an input into the development of a standardised carbon footprint methodology for the dairy sector.
    This has been an 18th month development process, which started with an assessment of commonality between 27 existing dairy industry LCA studies. And the standard dairy methodology is now very near finalisation.
    As far as we know, dairy has been quite unique in its approach. We have taken considerable time to build a broad consensus, and we have focused on being collaborative and open to inputs from outside the industry as well. That’s paid off, we hope what we have is something that works effectively and globally.
  • What were the challenges?
    The difficulties we’ve encountered have been at the technical level. The shared understanding within the sector of drivers for LCA tools, and the forums for collaboratively addressing these challenges have supported us in moving forward in an efficient manner.
    The major challenge has been development of the approach to allocating emissions between milk and meat at the farm level and between the multiple products produced from our interlinked manufacturing processes.
    Dairy has opted for bio-physical allocation over economic allocation for the milk to meat split.   Put simply we have divided emissions based on the feed requirements of the animal for growth and for milk production.
    Economic allocation was the other option. It would have been easier from a data access point of view. But it has the drawback of fluctuating product prices blurring the picture of progress in reducing actual emissions over time.
    The approach we’ve taken is, we believe, the most scientifically robust. It needs to be, as it has implications beyond dairy. Dialogue with the meat sector has been part of the process.
  • Address animal emissions
    Water issues more complex
    What other key considerations have emerged?
    The work in developing an LCA standard for carbon has highlight some related considerations:
    Firstly, the development of a LCA methodology for carbon has been the easy part.  Now we know what the carbon footprint is, we need to do something about it. But there are no easy answers for the animal emissions that dominate this footprint.
    Secondly, an LCA for a particular environmental factor – such as carbon - only shows part of the picture.
    Greenhouse gas emissions sit alongside other environmental considerations such as water quality, water use, soil conservation, and biodiversity.  And sustainability is also made up of economic and social considerations such as farm economic viability, animal welfare, labour conditions, and contributions to local communities.  
    Thirdly, developing tools to help manage other environmental issues will be harder. For carbon the drivers were strong, and in one direction, as far as the industry was concerned. It was pre-competitive and a global issue. Other issues – like water – are far more localised, factors like relative water stress add a whole new complexity.
    Fourthly, the application of LCA data to inform concepts such as sustainable diets is not straight forward. A robust approach needs to take into account not only the carbon footprint of a food item but also its relative nutritional density. Without clear scientific basis there is a risk of perverse outcomes for both food security and the environment.
  • concerns about “food miles” – the perception that agricultural imports from afar have a larger carbon footprint because of the distance they travel to reach import markets. More sophisticated calculations demonstrate in fact that that the bulk of GHG emissions created along the food supply chain occur in the production and processing phases, and that the amount of GHG emissions associated with transport vary significantly more by what mode of transport is used as opposed to the distance travelled
    MacGregor 2010
  • High cost of LCAs € 2500-6000
    Carbon credits:
    Carbon Sinks in the soil
    Stored Carbon [for example in trees planted on farm]
  • Challenges
    The calculation of carbon footprints, and in particular of indirect impacts, is technically complex. Methodologies for lifecycle assessments differ, and being to truly verify the findings on a global scale represents an enormous challenge. Ideally, international consensus on how best to calculate life cycle analyses could be achieved, in order to assure that they are equally effective and lead to harmonized rather than diverse efforts. In the absence of such consensus, however, governments must be mindful of their WTO obligations: carbon standards should not be used to disguise protectionist intentions, and as such should not discriminate against imports and should not be more trade distorting than necessary. Furthermore, this likely move towards identifying agricultural products based on their – in WTO parlance - “non product related production and processing methods” raises a number of important questions about the relationship between climate change related trade measures and international trade rules.
  • Carbon standards need to carefully balance
    the need to set incentives to reduce emissions
    with the risk of creating additional barriers to trade and reducing the potential of agriculture as a growth sector.
    encourage emissions reductions by enabling producers to measure and monitor their emissions, and could lead to opportunities for carbon credits and offsetting, a possibly significant source of additional income for farmers. Identifying, and then reducing, carbon hotspots throughout the supply chain, provides environmental benefits and creates greater efficiencies. It allows the identification of relative carbon intensity of food and agricultural products – an important concept given the need to increase food production to meet growing demand: rather than seeking to reduce absolute greenhouse gas emissions from agriculture, which could jeopardize food security, the challenge for the global food system is to increase production while minimizing greenhouse gas emissions.
  • Carbon standards in agriculture and food trade

    1. 1. Carbon Standards in Agriculture and Food Trade Thom Achterbosch ‘Best Practice in Agricultural Value Chains' hosted by Farming First at the Global Conference on Agriculture, Food Security and Climate Change, 3 November 2010
    2. 2. What drivers shape the path? ClimateClimate changechange Food SecurityFood Security Food MilesFood Miles The Need for Sound Science Retailer & Sector CommitmentHeightened Public Awareness Shared Global Challenges
    3. 3. Mitigation in a Market Setting • Agriculture’s potential for mitigation of greenhouse gases (GHG) • Absence of a ‘market’ for reduced GHG emission • Private sector, i.e. retailers and others, responding to vocal consumer concerns • Role of government standards • Impact on agrifood trade and development
    4. 4. What Carbon Standards Do Measure the life-cycle impacts of consumer products and particularly their GHG emissions. These carbon accountants draw to varying degrees on their own measured data and on data stored in life-cycle inventories. The data are then run through spreadsheet-based life-cycle assessment (LCA) models, to generate an estimated “carbon footprint”, Usually expressed in grams of CO2-equivalent per functional unit (e.g., kilograms or liters) of the product Source: MacGregor 2010
    5. 5. What Carbon Standards Do More • Encourage GHG emissions reductions by enabling producers to measure and monitor their emissions • Reducing, carbon hotspots throughout the supply chain • Facilitate carbon credits and offsetting • Identification of relative carbon intensity of food and agricultural products
    6. 6. Challenges for Agriculture • Reduce greenhouse gas emissions from agriculture, without jeopardizing food security • Increase production while minimizing greenhouse gas emissions • Low carbon farm and food products
    7. 7. Challenges for Foot Printing Several methodologies exist to calculate direct GHG effects and effects related to (indirect) land-use change National Standards – UK, US, Japan, France, etc – Biofuels criteria in France, EU : carbon balance of induced land- use change Supermarkets have their own – Leclerc, Casino, Migros Industry standards – Global dairy industry “Standard-setter – Kenya horticulture “Standard-taker”
    8. 8. Private Voluntary Standards for Carbon – What’s Driving Them? If carbon is to be a persistent concern and private businesses are to be assessed according to their carbon emissions then PVS will likely help identify hotspots and, where possible, reduce emissions. Private sector responses will include redirecting food supply chains to lower carbon alternatives and might include opportunities to offset outside their supply chains. The best chances for success are if resulting new business models can bring about cost savings or more efficient, secure supply chains. Source: MacGregor (2010)
    9. 9. Private Voluntary Standards
    10. 10. Dairy industry: Setting an industry-wide LCA standard 2008 • Sector participants developing LCA approaches 2010 • International dairy industry LCA standard Fonterra Carbon LCA Assessment
    11. 11. Challenges in Doing the Science Allocation of emissions on-farm Allocation of emissions in manufacturing
    12. 12. Once the footprint is known, what to do about it? ClimateClimate changechange WasteWaste ResourceResource depletiondepletion WaterWater scarcityscarcity FoodFood DemandDemand balance
    13. 13. Kenya horticulture – Standard- taker • Troublesome food miles concept driving Sunripe to seek better science • Implementing UK standards – Carbon Trust UK – GHG conversion factors from the British Standards Institute (PAS 2050) • Favourable GHG balance v-a-v European glasshouse production • Mode of transport more important than distance
    14. 14. Specific Challenges for Carbon LCA in Kenya Horticulture Low input agriculture a possible merit but verification a barrier • CO2e data missing for many types of chemicals or biological controls produced or used in developing countries • Worst case scenarios in case of no information Carbon credits • PAS 2050 does not account for Carbon sinks, Stored Carbon which could be used to offset the final footprint. Water the coming issue for LCAs
    15. 15. Issues of Compliance & Cost • Compliance burden to producers • High cost of LCAs • Even more complexity once water is addressed • Market access barrier to producers- a de facto standard • A negative impact to investments if gaps not addressed.
    16. 16. Challenges for Trade & Development • Carbon standards as new barriers in trade • Ensure access for producers in low-input systems in developing countries to benefits from carbon efficient supply • Carbon credits and offsetting, a possibly significant source of additional income for farmers. How to make value chains work for this purpose?
    17. 17. Concluding • Efforts are underway to reduce GHG emissions from agriculture, which alone account for about 14% of global GHG emissions, and even more considering that agriculture is a key driver of deforestation. • Private sector actors, wanting to be responsive to consumer concerns and anticipating future regulations, are establishing carbon standards for their products. • Need to balance opportunities of carbon footprinting with many challenges: food security, open trade system, shared benefits in value chains
    18. 18. Recommended Action • Crucial that carbon standards are based on science • Address agriculture specific issues • Beyond carbon: LCA of embedded water • Preferably, international standards are derived to ensure harmonization • In the absence of such international consensus, be mindful of WTO obligations • Sound and pragmatic carbon standards can play a role in climate change mitigation while safeguarding adequate food and agricultural production
    19. 19. Thank you IPC Seminar Carbon Standards in Agricultural Production and Trade October 2010, São Paulo, Brazil email: