Originally posted on Business Post 06 August 2022.
The resolution of the agriculture emissions problem requires it to be seen for what it is: a problem of oversupply of a by-product.
The vote of no confidence put down by Sinn Féin in the Dáil last month was a failure. Not only that, it seemed to galvanise the government parties while rallying some of the independents in the Dáil, whether they belonged to the government parties’ gene pool or not. Thus stabilised, government ministers should have gone on their summer holidays feeling reasonably secure, until the dispute over carbon emissions targets came to prominence.
Climate change is not a little thing, but it should not trigger a crisis within government over carbon emissions targets in the farming sector. The concerns of farmers serve as a magnifying glass on political activity, and this particular magnifying glass can burn. The government’s position is not helped, either, by a discernible scepticism about climate concerns in the public mind fuelled by growing concerns over energy security.
Fear of unbearably hot conditions over the next decade are being eclipsed by fear of unbearably cold homes over the next winter if Russian gas supplies to Europe are turned off. The EU’s relatively unambitious plan to cut gas consumption by 15 per cent has fallen foul of so many terms, conditions and exclusions that the net reduction might well be a lot less. It depends on every EU member state playing nice, and there are no guarantees of that.
Few enough leaders across Europe have sufficient political capital to withdraw any existing services, or impose widespread restrictions on their electorates, and hope to survive the next election. This fact is at the root of the EU’s difficulties in agreeing restrictions on energy consumption, even if they can make the Russian sanctions regime more effective.
Agreeing restrictions to make Ireland’s carbon sanctions regime more acceptable to the electorate is also at the heart of the current government problem, of which this is only the first instalment. If the government can survive this rattling over the next few months, it will be due in no small part to the disarray of the opposition on the issue.
In all this, however, both government and opposition parties have missed the potential of commercial policies when it comes to achieving their objectives. There are many ways to view the problem of carbon emissions in the agriculture sector, but its resolution requires it to be seen for what it is: a problem of oversupply of a by-product.
Agricultural oversupply can be resolved. In the past, butter mountains have been levelled and wine lakes have been drained when agriculture policies were modified to manage them. And before anyone starts whinging about subsidies to farmers, remember that for all its faults, the Common Agricultural Policy (CAP) is designed to ensure food security at reasonable prices for consumers.
This is not just about incentives, but about euros and cents. If, despite protestations, the national herd gets forcibly reduced, say by 25 per cent, then the prices paid to eligible farmers need to increase by 33 per cent through direct government intervention.
It won’t make the prospect of herd reduction attractive for the farming industry, because farmers are justifiably proud of their herds and of the quality of their produce. Equally, however, farmers are business people who, for the most part, recognise that restrictions for a broader purpose in their industry are sometimes necessary.
One of the faults of the current CAP is that it is not clear enough about funding climate action. There won’t even be a method to measure its impact “until 2026 at the latest”, according to the EU’s own factsheets. So much for the notion that what gets measured gets done.
More broadly, providing higher agriculture subsidies in Ireland to combat climate change may not be particularly effective. The world market for beef or dairy is unlikely to contract just because Ireland produces less. In this case, the ultimate consumer is the planet, not the person. We would be responding to the science, not to the demand.
Perhaps the main obstacle to such a strategy is the lack of imminence of the problem. Climate activists the world over have seen their objectives topple down the policy agendas as governments grapple with Russia’s invasion of Ukraine and its consequences.
It is hard to marshal political support for any problem not crystallising before the next election, or even before the summer holidays.
Dr Brian Keegan is Director of Public Policy at Chartered Accountants Ireland