Are greenhouse gas emission reduction goals too costly?

Glacier FarmMedia – A recent report prepared by accounting firm Meyers Norris Penny says Canadian farmers could lose $48 billion over the next eight years if the federal government moves ahead with plans to reduce greenhouse gas emissions from on-farm fertilizer use by 30 per cent.

In its report entitled Implications of a Total Emissions Reduction Target on Fertilizer, MNP said achieving a 30 per cent reduction in ag emissions through a gradual reduction in actual fertilizer use would result in annual farm income losses ranging from $1.8 billion in 2023 up to $10.4 billion in 2030. 

Why it matters: Any mandated reduction in fertilizer use, employed to curb greenhouse gas emissions, is likely to also reduce food production and farm income, says the report.

The federal government has established a voluntary target of reducing agricultural emissions related to fertilizer use by 30 per cent by 2030.

Ottawa has not indicated how it intends to reach the target but some industry observers fear the voluntary target could become a mandatory mandate achieved through regulated restrictions on fertilizer use.

Canadian farmers could lose $48 billion over eight years as a result of lower projected crop yields if Canada endorses a so-called European GHG emissions reduction model, which is based on restricting or reducing fertilizer use, the MNP report stated.

The report, prepared for Fertilizer Canada, uses historical yield data from three major crop types — wheat, corn and canola — between 2001 and 2020 to calculate projected 2030 yields, assuming that no fertilizer restrictions were implemented.

Those projected yield values were compared to projected 2030 yields under a 30 per cent emissions reduction scenario, in which Canadian farmers were forced to reduce actual fertilizer between 2023 and 2030, consistent with the model proposed in the European Union’s Green Deal.

According to the MNP report, reducing Canadian fertilizer use to achieve a 30 per cent reduction in ag-related GHGs from fertilizer use would result in 2030 yield gaps or differential yield losses of 23.6 bushels per acre per year for canola, 67.9 bu. per acre per year for corn and 36.1 bu. per acre per year for spring wheat.

“If Canada adopted the EU model, the potential economic impact would be devastating for Canadian farmers,” Fertilizer Canada said.

Fertilizer Canada, an industry association that represents the interests of fertilizer manufacturers, wholesalers and retailers, argued that any plan to reduce greenhouse gas emissions from agricultural fertilizers should not be based on absolute reductions in fertilizer use but on sustainable agricultural intensification — an approach that measures GHG emissions on a per bushel basis but allows for continued economic growth within the Canadian agriculture sector and does not restrict Canada’s contribution to the global food supply.

“When the federal government announced a 30 per cent emission reduction target for on-farm fertilizer use, it did so without consulting the provinces, the agricultural sector or any key stakeholders on the feasibility of such a target,” said Karen Proud, president and chief executive officer of Fertilizer Canada.

“This study shows that we need to work together to find practical and pragmatic solutions for emissions reductions without causing economic devastation to our agricultural sector.”

In a Sept. 28 interview, Proud said Canada should achieve its emissions target not by capping or restricting fertilizer use, but by encouraging Canadian farmers to use fertilizers more precisely and efficiently, as outlined in the fertilizer industry’s 4R Nutrient Stewardship program.

Fertilizer Canada commissioned the MNP report in hopes of determining the economic impacts of a 30 per cent reduction in fertilizer-related GHG emissions.

“I think it’s important to make clear that (Ottawa) has not said definitively that it is taking the European approach. But, the targets that the federal government has put out would require an absolute reduction in fertilizer use. There’s no other way, at this stage, to achieve it.”

Despite announcing its GHG reduction target, Ottawa has not offered any estimates on how the Canadian agriculture sector would be affected, added Proud, who called the report’s findings concerning but not surprising given that fertilizer is a key input in modern agricultural systems.

“When you look at a figure with a cumulative impact of $48 billion, that’s a huge number and it’s very concerning, especially when the report only looked at three crops — canola, corn and spring wheat,” she said.

Fertilizer Canada is calling on Ottawa to recognize 4R Nutrient Stewardship as a key concept in achieving on-farm emissions reductions from fertilizer.

“Now is the time for the government to collaborate with industry and farmers on an approach that showcases Canada as a world leader in reducing on-farm emissions,” the organization said.

This article was originally published at The Western Producer.