Conference Agenda

Summary: Climate policy for farming generally and for ruminant/dairy farming in particular is partial and largely ineffective; the ideas of economists are not prominent in its design and delivery. The Environmental Defense Fund (EDF) is the leading environmental non-governmental organization that uses teams of economists and scientists to inform and drive its advocacy. The purpose of this theme is to understand the gaps that make progress difficult; to use insight from best practise to help find ways that work to make progress at scale; and in particular to identify where economists can maximize their contribution.

 

Why 1? – Many Gaps: Where climate policy exists for farming, it is much weaker than policies for other sectors. Specifically: It is not obligatory (‘opt in’); data on greenhouse gas emissions at farm level are often inadequate; limited measures available to reduce emissions (in dairy, ~60% of emissions are enteric methane although where production is inefficient enteric emission reductions are feasible); innovation bias – most investment therein favours indoor containment systems, but globally most dairy farming is pasture-based. Action incurs diseconomies of scale - a preponderance of small farms which are often associated with farm owners who are old, with limited formal education, difficulties in accessing capital; limited or no capacity to use IT.

 

Why 2? - The Economics Gap: There is: unwillingness to use prices to incentivize emissions’ reductions; low attention to cost effective use of subsidies or supply chain incentives; no information to consumers on the carbon efficiency (CO2e/kg) of what they consume.

 

But there are exceptions - Learning from Experience: A few jurisdictions have taken actions from which we can learn. California has legislated for disclosure of emissions information by companies above a certain size threshold including Scope 3 (farm based) and has designed and delivered subsidy programmes to reduce emissions starting in 2015. Such actions are limited to willing regulators, and a good understanding and acceptance of political economy limitations is therefore crucial. Recent examples of New Zealand, Denmark as well as on-going developments in the European Union and in China, vs. decisions in India illustrate the differing political economy issues at play, as well as the need to approach dairy sectors of different compositions (predominantly intensive vs extensive, in-door, roaming cattle etc) with different economic solutions.