Climate measures in Irish agriculture

Today, I made an online presentation to a virtual workshop jointly organised by MAREI, the Marine and Renewable Energy Ireland centre at University College Cork and the Economic and Social Research Institute, Dublin on climate and energy policy research. The talk discussed measures in agriculture to reduce Irish agriculture’s greenhouse gas footprint in the context of the country’s policy goals for climate stabilisation. Below is a transcript of the talk.

Agriculture is the single largest contributor to Ireland’s greenhouse gas emissions, accounting for 34% of total national emissions in 2018, but 46% of the emissions that are limited by the EU Effort Sharing Decision. If we are to reduce emissions in line with our national targets for 2030 and 2050, agricultural emissions must clearly be reduced. Yet they have been increasing in recent years.

Reducing absolute emissions is more difficult in agriculture because of the absence of obvious technical solutions such as exist for energy generation, transport and the built environment. Climate, culture and market factors limit the options to restructure agricultural production away from ruminant animal production towards lower greenhouse gas-intensive activities.

But if agricultural emissions were exempted from reduction or fail to be reduced, this puts even greater pressure on other sectors to reduce emissions and could significantly increase the overall economic costs of reaching national climate targets.

There are some specific characteristics of emissions from the agriculture and land use sector we need to keep in mind when considering measures to ensure a reduction in agricultural emissions over time.

Agricultural emissions in the national inventory are primarily the non-CO2 gases methane and nitrous oxide, reflecting the ruminant nature of Irish farming, principally cattle and sheep production. Methane in particular is a potent but short-lived climate gas. Annual emissions of CO2 must go to net zero to stabilise the CO2 concentration in the atmosphere but to stabilise the methane concentration it is sufficient, to an approximation, to stabilise emissions at current levels.

The IPCC Special Report on keeping the increase in global temperatures below 1.5°C advised that biogenic methane emissions should be reduced but not necessarily to zero. The Climate Change Advisory Council has advised government that it would be appropriate to set separate reduction targets for long-lived climate gases and biogenic methane. Clearly this would need to be reflected in EU legislation to make it feasible.

Agriculture is also different to other sectors in that it has the ability to sequester carbon and to act as a carbon sink through soils and biomass.

Net removals from land use and forestry are not counted towards Ireland’s 2020 target but will be counted partially towards its 2030 target. Carbon sequestration in so-called nature-based solutions has significant drawbacks: there is much greater measurement uncertainty, net removals are calculated according to policy-based accounting rules rather than what the atmosphere sees, carbon sinks are easily reversed, and sinks ultimately reach a saturation level.

Despite these caveats, it makes sense to set an integrated target for agriculture and related land use and to track trends in net emissions together. Farmers making decisions on how to manage production and their land, impact emissions from agriculture and land use jointly.

Targets should also consider the co-benefits from helping to meet other challenges facing agriculture, not least ceilings on ammonia emissions but also water quality and prevention of biodiversity loss, as well as that many sequestration measures will help to build resilience in the face of the adverse impacts of climate change.

The final general point is the economic and social context for cattle and sheep farming in Ireland. There are around 137,000 farm holdings in Ireland; 109,000 of these have some form of cattle production. Some 36,000 have some form of sheep production. Ruminant agriculture thus extends into every parish in rural Ireland and is an important contributor to local economies.

Yet this scale of ruminant agriculture would not be viable without public support. This partly takes the form of border protection against imports, where a tariff equivalent to around 45% applies to imports of beef and sheep meat. In addition, beef and sheep farmers are heavily dependent on income support transfers under the CAP.

If we divide beef farmers into three equal groups based on their economic performance, the bottom third are barely covering their direct costs (these are the gross margin figures in the top left of the chart) even taking the protected market and CAP income transfers into account. Including overhead costs such as rent, interest and depreciation, the bottom one-third of beef farms have a negative net margin and are subsidising their beef enterprise out of their direct payment.  These farms also have higher than average emissions per kilo of product. An obvious question is whether these farmers could be offered an alternative that both protected their income and reduced emissions at the same time.

Mitigation options

What are the potential measures to reduce agricultural emissions? There are three main drivers – livestock numbers, fertiliser use and the emission factors that link these variables to emissions which depend on a host of technical factors such as feeding regimes, manure management, animal husbandry, grazing practices and genetics. In addition, a fourth driver is land use and land use change including forestry reflecting the earlier argument that these should be considered together.

Future trends in livestock numbers should distinguish between the beef and dairy sectors or, more accurately, between the suckler cow herd and the dairy cow herd, as the dairy sector depends on the beef industry to rear its surplus calves.

Negative market trends and shocks, such as a hard Brexit after December or a shift in consumer preferences towards alternative proteins, may well reduce the future size of the suckler herd, although they could also unleash a succession of emergency aid packages such as we have seen in recent years designed to maintain numbers. Careful design of CAP payments that would link payments to environmental services while limiting stocking density could provide a more remunerative alternative for many of these farmers.

We also need to limit the growth in dairy cow numbers to what the environment can sustain. Dairy farming is by far the most profitable sector and also contributes more than the suckler herd to agricultural emissions. Intensive dairy farming is limited by the Nitrates Directive that sets a maximum level of organic manure per hectare, but many dairy farmers avail of a derogation to exceed this level.  Although the obligations farmers must meet to be granted a derogation were strengthened this year, more will need to be done unless net emissions from dairy farming begin to fall.

It is sometimes argued that limiting production in Ireland does not make sense given that the global demand for food continues to increase. But it has never been an objective that Ireland should seek to maximise production. There is no support for the idea that Ireland has an obligation to produce as much food as possible. The appropriate target is the optimal level of production, taking full account of costs and returns including positive and negative externalities.

But, the objection runs, any reduction in relatively carbon-efficient Irish production may well be replaced by less carbon-efficient production in third countries, a phenomenon called ‘carbon leakage’. Whether carbon leakage occurs and to what extent depends on many factors, including the sources of alternative production and whether these countries also have binding climate targets. If Ireland wants to reduce carbon emissions in third countries, it would be more effective to do this directly rather than incurring the additional costs of maintaining cattle numbers in Ireland above the socially optimal level.

The second driver to reducing emissions is reducing fertiliser use, although Teagasc results suggest that both dairy and drystock farmers are applying less than recommended levels. Requiring all farmers to develop a nutrient management plan, more soil testing, optimising the uptake of nitrogen through correct drainage and soil pH, introducing more legumes into grass based swards, and extending the area under organic production, could all help to reduce the volume of fertiliser used.

Emission factors – our third driver – can be improved either through efficiency improvements – improving productivity and thus emissions intensity per unit of output – or technological innovations. Teagasc has identified the most promising alternatives in its so-called Marginal Abatement Cost curve that forms the basis for agriculture’s mitigation strategy in the Climate Plan. Genetic improvements in the dairy herd and a switch from calcium ammonium nitrate fertiliser to protected urea are the two measures that have the greatest immediate potential. In the longer run, much greater research into ways to reduce methane emissions from grazing livestock animals will be needed.

Finally, there are options on the land use and forestry side. These include building up soil carbon through better grassland management, the use of cover crops and minimum tillage on arable farms, and the rewetting of organic soils that may have been drained to increase productivity in past decades. Biomass options include afforestation, agro-forestry and hedgerows, although afforestation rates have been steadily falling. In addition, there may be the possibility to substitute for fossil fuel energy through growing energy crops as well as producing biogas through anærobic digestion.

Incentivising change

The big question is how to incentivise farmers to adopt these measures to mitigate emissions. There are a range of possible instruments. One is a greatly stepped up research effort to drive down the cost of technological innovations so that they become financially attractive in their own right, as has happened with wind and solar energy, for example. Another measure is increased emphasis on information and education, including support for climate leaders within the farming community. Third, we need better measurement and monitoring of emissions, including the development of robust, easy to use and low cost farm audit tools so that we can eventually measure the carbon footprint of individual farms.

Fourth, there will be a role for additional regulatory measures. The Commission is unveiling its Farm to Fork and Biodiversity Strategies later today and is expected to include targets for reducing fertiliser use and increasing the area of land set aside for nature and biodiversity, both of which would help to reduce emissions.

More effective targeting of CAP subsidies has already been mentioned. Unfortunately, it now looks as if introduction of the new CAP post 2020 will be postponed for two years, thus limiting what can be done with Pillar 1 payments (for example, the possibility to use some of the Pillar 1 money for eco-schemes will be delayed).

Ultimately, emissions will be reduced most effectively in agriculture as in other sectors by the use of market-based instruments, whether some form of emissions trading or a levy/subsidy scheme based on actual farm emissions. New Zealand plans to have a market-based system in place by 2025 to reduce net emissions from its grass-based agriculture. This should also be the long-term goal of Irish policy.

The presentation slides accompanying the talk can be downloaded here.

This post was written by Alan Matthews

Photo credit: Pixabay free to use.