Washington Insider-- Wednesday

Fights Ahead in Carbon Accounting

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Mexican Judge Rejects Bid to Freeze Mexico GMO, Glyphosate Plans

A request to freeze a government plan to ban imports of GMO corn and glyphosate by 2024 was rejected by Mexican Judge Martin Adolfo Santos Perez, marking the latest of what Mexico's National Council of Science and Technology (CONACYT) said have been 17 legal challenges of the order issued by Mexican President Andres Manuel Lopez Obrador.

The latest action was brought by the National Farm Council (CNA). The group argued that it is concerned "radical and unscientific interpretations" of the planned bans will stoke uncertainty. CONACYT has been directed to come up with an alternative to glyphosate.

USDA Secretary Tom Vilsack has said he has continued to discuss the issue with his Mexican counterpart and has indicated that the ban on GMO corn could apply only to corn used for food as opposed to feed, but the issue is not clear at this juncture.

NPPC Weighs In On Court Decision On Pork Plant Line Speeds

A recent ruling by a federal judge would be "disastrous" for small U.S. hog farmers, according to the National Pork Producers Council (NPPC).

Left unchallenged, a recent federal district court ruling will result in a 2.5% loss in pork packing plant capacity nationwide, and more than $80 million in reduced income for small U.S. hog farmers, according to an analysis by Dr. Dermot Hayes, an economist with Iowa State University. NPPC is urging USDA to intervene before the ruling takes effect at the end of next month. The ruling, NPPC said, "will dramatically reduce hog farmer market power--particularly smaller producers located near impacted plants--and undermine pork industry competition."

NPPC said the court's ruling will have the opposite effect sought by those seeking to expand the number of meat packing plant facilities. Lawmakers have recently called for increasing the number of pork processing facilities nationwide by bringing smaller state plants up to federal inspection standards. These facilities represent less than 1% of total harvest capacity.

Washington Insider: Fights Ahead in Carbon Accounting

As the focus on carbon emissions rises, there figures to be new battles looming on carbon accounting, according to the Bloomberg Green Insight newsletter.

The start examining the issue by looking at the claim Australian Prime Minister Scott Morrison made in April that the country had cut its emissions by 19% in 2019 compared with 2005 levels. He made the announcement during the climate summit organized by President Joe Biden.

Bloomberg labeled his claim on emissions reductions as "an attempt to burnish his country's coal-stained image."

But digging deeper, the Green Insight author Ashkat Rathi said that the figures touted by Morrison was merely an accounting trick. Turns out, it was a neat accounting trick. "Australia has made minimal progress towards net zero and its emissions trends are among the worst in the developed world," a new study from the Australia Institute concluded.

The study said that the reduction claims made by Morrison was only possible to get to if the land-use sector is included -- forests, agriculture and other related emissions. Taking those items out of the mix, the study said, Australia's emissions from fossil-fuel use and industry increased by 6% in 2018, relative to 2005.

The big focus is on fossil fuels as their contribution of emissions, something which Bloomberg said is something that only can happen over the course of decades, according to Pep Canadell, chief research scientist at CSIRO's climate science center.

But those emissions from land-use areas are certainly important. The Global Carbon Project said that the land-use sector added some 6.5 billion tons of emissions in 2019. To put that in perspective, that is about 20% of the emissions from fossil fuels for 2019.

But therein lies another key issue. Experts agree that measuring emissions from land use are not easy and the measurements used on emissions reductions are largely based on avoiding a hypothetical polluting activity.

Those emissions are going to be key in the climate change debate. Those also figure high on the list of things that will be focused on at the COP26 in Glasgow in November, Bloomberg said.

That COP26 confab will see countries seek to come up with ways to agree on rules for the Paris Agreement to create a new carbon market to help the public and private sectors trade those offsets. Presumably, that would also provide the basis for pricing those credits, another key factor in the process.

"The goal of the market is to reduce emissions, but without clear accounting and strict regulations there's a big risk of greenwashing," Bloomberg said.

One of the terms that figures in the mix is "avoided deforestation," that is based on the concept that the world will have to avoid cutting down forests in order to meet climate goals.

So to measure avoided deforestation, there will have to be a baseline of deforestation established. If, for example, that would be set at 1%, then if the rate of deforestation falls by 0.5% then those developing the projection can create offsets based on the 0.5% of emissions avoided because some trees weren't cut down. Those offsets could then be purchased by those who need such credits to "reduce" their carbon emissions.

But that also leaves the situation rife for the potential for "greenwashing" of figures and manipulating baselines by sellers to create a big batch of credits. That sets up a situation where those that need to buy the credits could obtain them at a cheaper price.

Then there is the potential for double counting. Bloomberg said that could arise as a company could delete emissions from their own accounts and a country could conceivably also cancel those same credits for that country.

And Bloomberg said that is a real situation. "One of the reasons Article 6 negotiations have failed at previous COP meetings is reportedly because Brazil objected to the phrase 'double counting' appearing in the rulebook governing the new carbon market," Bloomberg said.

So we will see. This situation could become a major issue ahead, particularly the matter of double counting and greenwashing and more. And agriculture figures prominently in the mix, particularly on land-use emissions. This creates a series of discussions and debates that agriculture will need to follow closely, Washington Insider believes.

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN's Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the US Ag Policy, US Farm Bill and DTN Ag News sections on their News Homepage.

If you have questions for DTN Washington Insider, please email edit@dtn.com