Economist sounds alarm over carbon reporting

Glacier FarmMedia – Agricultural economist Richard Gray says the worldwide carbon accounting system used to plan grain policy is flawed because it fails to properly include how grain stores and releases carbon.

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The University of Saskatchewan professor told the standing committee on agriculture that every tonne of produced grain removes 1.65 tonnes of carbon dioxide from the atmosphere.

The use of that grain, through consumption or biofuel production, adds that carbon dioxide back into the atmosphere.

Considering the millions of tonnes of grain produced, the amount both sequestered and released is huge, Gray said.

Why it matters: A University of Saskatchewan professor says current carbon accounting is flawed and was developed before carbon flow in Canadian agriculture was fully understood.

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“These are big flows of CO2 to and from the atmosphere,” he said in an interview. “The accounting system does not include that.”

The flaw was first identified by American economist Timothy Searchinger and is outlined in a 2009 publication in the journal Science. It was incorporated into carbon accounting, possibly before the system was fully thought out, Gray said, adding that most people have no idea the flaw exists.

As a result, Canadian grain production has a much bigger role in the equation than current policy reflects.

“If you put a bubble over Canada, the crops growing in Canada are removing a lot of CO2 from the atmosphere and that CO2 is released when that grain is burned, so some of that is released within the bubble over Canada but a whole lot of that is emitted around the world once the exported grain is consumed, etc.,” he said.

Gray said if Canada intends to meet its Paris Accord commitments, the flawed system will be used to measure them.

In the meantime, the perspective that grain production is dirty because farmers burn fossil fuels and produce nitrous oxide emissions has grown.

“We’re viewed as an emitting sector because all the carbon that that grain has removed from the atmosphere is invisible to the accounting system.”

In fact, grain exporters are exporting carbon while importers are essentially burning it and releasing it back into the atmosphere, he said.

The flaw has led to policies that promote biofuels and the reduction of fertilizer emissions. Gray said if all of Canada’s grain production was turned into biofuel to replace fossil fuels, total emissions wouldn’t change much and might actually increase.

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“But in the accounting system all that’s invisible, so in the accounting system it looks like we’ve saved the world because we’re not emitting greenhouse gases anymore when in fact we are.”

And if grain yield drops, farmers are removing less carbon from the atmosphere so Canada wouldn’t be further ahead.

Gray said he is working on better understanding this issue and intends to present it to Agriculture Canada because of its importance.

“I don’t think it’s any coincidence at all that we have record food prices and food security has become an issue because we are literally burning people’s food. And why do we do that? Because the accounting system says, ‘gee, we can score better on the Paris Accord if we burn our grain rather than burn fossil fuels’, even though the emissions are the same.”

He said he is not opposed to biofuel use, but wants the world to pay attention to how much grain is produced. If grain is used for fuel, people can go hungry, and if less grain is produced, it could cause other environmental problems such as cutting down more rainforest to help feed the world population.

“It is important to think about how our policies impact the incentives for emissions in the rest of the world and if you’re a bit of a humanitarian, you might think it’s important to think about how people can eat in the rest of the world. That’s my view.”

Gray presented a brief overview of his position during his testimony at the agriculture committee’s study of Bill C-234, which would exempt natural gas and propane from grain drying and heating barns, but none of the committee members took him up on it.

He said he is in favour of the exemption because it at least compensates somewhat for the accounting flaw.

His U of S colleague, Tristan Skolrud, argued for retention of carbon pricing to maintain a price signal for investment.

“The development of greener alternatives will require significant private capital, and if grain drying is unregulated, the signal to private capital will be lost,” Skolrud said.

He said limited changes in producer behaviour will result in limited emissions reductions. As the current legislation stands, money spent on grain drying and barn heating is returned, although not at the levels farmers would like.

“From an economic perspective the question is as follows: will the social welfare costs of redistributing income from larger energy-intensive farms to less energy-intensive farms through uneven rebate distribution outweigh the gains from the investment signal sent by keeping the price in place?”

Skolrud’s answer is no; the cost of exemption will not outweigh the long-term benefit.

Gray said Skolrud is correct because he used the accepted existing accounting method, and if Canada is going to work to meet its climate commitments then price signals make sense.

“His view of emissions is the view of the 98 per cent. My view is the two per cent,” Gray said.

He added that he thinks pushing for acknowledgment of what is actually happening in grain production is important because Canada is spending a lot of money on things that might not be helping. More research is needed on ways to increase output.

“In terms of nitrogen, for example, we probably want to get rid of our most intensive practices but we might want to increase our less intensive practices just so that we can help produce more grain, which has benefits internationally.”

Gray said Searchinger wrote a follow-up paper on this error and food security in 2013 that is cited often but drowned by the status quo.

Searchinger also wrote that the U.S. ethanol policy created negative environmental benefits because burning corn resulted in higher prices. Higher global grain prices led to incentives to burn rainforests and other sensitive areas to grow grain, which actually led to more emissions.

Gray argued that if governments are going to spend consumer dollars to encourage biofuel use, then they should also spend money to encourage more grain production because that’s important to the environment as well.

Straightening out the accounting would show that famers who spend their lives growing crops are removing carbon from the atmosphere, he said.

“It’s a big issue. It’s so big I don’t know how to get my head around it.”

– This article was originally published at The Western Producer.