WWF CBM0015

Written evidence submitted by WWF

 

WHO WE ARE

WWF is the world’s largest conservation organisation. Our mission is to stop the degradation of the planet's natural environment and to build a future in which humans live in harmony with nature by conserving and restoring the world's biological diversity, ensuring that the use of renewable natural resources is sustainable and reducing pollution and wasteful consumption.

We welcome the opportunity to submit evidence to this important inquiry and would be happy to provide additional information, further testimony or an expert witness should it be helpful to the inquiry.

Carbon Border Adjustment Mechanisms (CBAMs) raise a broad range of issues that will vary across sectors. Due to WWF’s expertise in food and farming, and the particular risks and issues of CBAM in this sector, we have decided to focus our response there. 

SUMMARY

 

 

 

 

 

1.      What are the risks to the UK posed by carbon leakage? How effective is the Government’s current approach to tackling carbon leakage?

1.1.    Carbon leakage refers to the carbon or greenhouse gas (GHG) emissions for which a country is responsible but occur outside its national borders and can be understood as the difference between territorial and consumption emissions.  It is important to understand the extent of carbon leakage and whether it is increasing and why to ensure UK policy to meet net zero targets is actually contributing to a lowering of emissions overall.  The UK’s net zero target, like all UNFCCC targets, is set in terms of territorial emissions and with badly designed policy and no reference to consumption emissions could be met by simply offshoring i.e. decreasing emissions in the UK whilst increasing emissions elsewhere in the world and doing nothing to address climate change. 

1.2.   University of Leeds analysis on the UK’s carbon footprint [1] produced the first analysis of UK historic carbon emissions, 1990 – 2016, broken down into 15 regions and 106 industrial sectors.  This analysis provides insights on historic trends and increase the robustness of data to support the UK set a consumption emissions target as part of the 25 Year Environment Plan’s commitment to reduce the UK environmental footprint. It shows that, historically, whist UK territorial emissions have reduced by 41% over the 1990-2016 period, consumption emissions have reduced by only 15%.

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1.3.   As a result of the UK long term deindustrialisation and changing patterns of agricultural production a significant proportion of the UK’s emissions already come from overseas and the UK became a major importer of manufactured and agricultural products before any significant environmental regulation or carbon pricing was introduced.  As policies to meet net zero and nature restoration accelerate in the coming decades it becomes increasingly important to ensure we mitigate against offshoring in the future and that policy levers the UK position as a major importer to encourage a wider transition in environmental production via our supply chains.

1.4.   The Carbon Footprint reports shows that in 2016 the UK total GHG footprint 773Mt, 56% coming from UK and the remaining 44% comes from the Rest of the World. And importantly for discussion of CBAMs, although the UK is responsible for most of our own energy and transport emissions, where most policy effort has been focused in decarbonisation so far, the UK produces much less of its own primary products, services and very little of manufactured goods we consume, so the decarbonisation of those sectors will require policy mechanisms which are effective in traded sectors.

 

 

 

 

 

 

UK carbon footprint (2016)

1.5.    The extent to which overseas production and imports are a significant part of the UK footprint is particularly pertinent in the food and farming sector.  The UK’s consumption footprint from food is 73Mt, of which the UK produces around 52% and imports account for the remaining 48%, a higher proportion than the average across the economy.  In 2016 the majority of the UK GHG from food imports came from the EU where the UK sourced most of its food imports.  However, that could change with the advent of new trade deals that will increase opportunities for trade between the UK and other nations the EU had not agreed trade deals i.e. Australia, New Zealand and the United States.

       Emissions from UK food consumption (2016)

1.6.   The UK’s plans for decarbonising food and farming are important for the UK’s own carbon target, because it is one of the sectors where emissions have remained stubbornly flat and potential of UK farmed land to act as carbon sink is not yet being realised, and because the transition to sustainable agriculture globally is one of the nature based solutions that are being prioritised at COP26.   Food and farming are major contributors to the climate emergency and biodiversity crisis. They are estimated to be responsible for c. 30% of global greenhouse gas emissions, and for 50% of terrestrial and 70% of freshwater biodiversity loss[2]. The types of food and the methods of agricultural production are key to the size of the environmental footprint of food.

1.7.    Most proposals for CBAMs are focused on those sectors – steel, aluminium, chemicals - where there are existing carbon taxes or cap and trade schemes in place i.e. the EU ETS and where the main environmental impact to address is GHG’s.  However, there have been some calls for carbon taxes, which would need to be in place first, and an associated CBAMs in the food and farming sector, particularly for meat, so it is worth addressing some of the risks around a GHG focused approach to addressing trade in this sector.

1.8.   There is a real challenge with tradeable goods like food, that attempts to decarbonise and reduce environmental impacts of production make UK producers less competitive than producers who don’t face such stringent environmental regulations or have to meet policy to decarbonise in their own countries.  The UK, as an independent trading nation and actively engaged in negotiations with a number of major agricultural exporters needs to be at the forefront of addressing this.

1.9.   There are three main routes by which trade policy and environmental impacts are connected:

1.10.                      These connections have been recognized by Department of International Trade with Green 100 tariffs for the distinct set of environmental goods and services the UK wants to promote.  However, there is not yet a clear way forward for goods like meat, milk, cereals, fruit and vegetables which are more or less green depending on the agricultural practices that produced them.  There the UK approach to preventing the offshoring of the environmental impact of food production – in respect of GHG or environmental impacts more broadly – is non-existent.

2.     What role could a carbon border adjustment mechanism (CBAM) play in addressing carbon leakage and meeting the UK’s environmental objectives?

 

2.1.   GHG data for food and farming are more complex than for other industries, such as heavy industry, which makes CBAMs inadequate for the food and farming sector.[3] While methodologies for calculating GHGs from food production are improving, some elements are not yet standardised, which has implications for comparing farming systems across countries.

 

2.2.  Land sequestration or soil methodologies still vary, and standard approaches are in the process of being developed by the IPCC. Currently the UK’s three leading footprint tools can give different results based on the same data, and this problem particularly affects the footprint of livestock farming.

 

2.3.  System boundary and modelling methods used for lifecycle carbon analysis will affect the extent and way the food supply chain is included, and can cause huge variation in the calculations, as can the approach to modelling methane.

 

2.4.  However, even with robust GHG emissions metrics in place, there are many other issues that would need to be considered in farming regarding environmental impacts outside of GHG emissions: water quality, habitat and biodiversity protection, public health and zoonotic diseases, animal welfare, etc. These are all part of agricultural regulation of domestic production, and a carbon border adjustment mechanism would not sufficiently capture that complexity of environmental impacts.

 

2.5.   Comparing farming systems solely based on their GHG intensity can be misleading. For instance, comparing Australian and UK livestock farming based on GHG intensity can show them as broadly similar.[4] However, this is likely to understate recent data on deforestation for agriculture and ignore wider impacts such as biodiversity and water use impacts where Australia’s beef and lamb production has much higher impacts than UK production.[5]

 

2.6.  Even if it were possible, lowering carbon emissions through intensifying the conventional industrial food production system comes with unacceptable costs in terms of animal welfare and risks to public health. Livestock and poultry reared fast in industrial farming systems in some instances produce less GHG emissions per kg of meat, but this is linked to higher levels of disease, increased use of antibiotics, and worse animal welfare standards.  And overall, the profitability of this system generally leads to increased production, which ends up increasing emissions rather than reducing them.[6]

 

 

3.     Should the Government pursue a unilateral CBAM? If so, why and what form should this take? If not, are there alternative approaches to addressing carbon leakage which the Government should be considering?

3.1.   Unilateral action may be required on CBAMs in order to ensure UK domestic policy on net zero is effective.  The ideal solution, a global carbon price, is likely to take a long time to agree if it can be agreed at all.  Countries at the forefront of environmental policy need a trade mechanism to ensure they are not consigned to move at the speed of the slowest.  CBAMs are likely to be a transitionary arrangement that is necessary for fewer and fewer countries as carbon taxes are instituted around the world, but in the interim are neededAny CBAM will have to be designed carefully and with appropriate support to transition the poorest countries in the world to greener production systems and avoid a CBAM hindering development in the Global South. 

3.2.  Notwithstanding support for the general principle of unilateral action, a CBAM in food and farming would not be appropriate or effective for the reasons already stated.  A trade mechanism for food and farming is however much neededThe UK has some of the highest animal welfare and environmental standards in the world, is embarking on a world leading reform of its agriculture support system based on the principle of public money for public goods, and is a founding partner of the Forest, Agriculture and Commodity Trade (FACT) dialogues to deliver sustainable supply chains.  This policy framework to deliver a transition to sustainable agriculture is important for the UK’s and global environment goals and needs aligned trade policy to support its delivery.

3.3.  WWF is proposing the UK develop minimum core standards, including environmental standards, which would ensure all food imported into the UK meets comparable levels of climate, habitat, biodiversity, and water protection to those required in the UK. This will ensure the UK’s transition to sustainable farming is not undercut at home and also drive transformation of the global food system, by supporting the best practice of farmers overseas.[7]

3.4.  It is important to note that the UK, like most countries, does not yet have any environmental standards for the food it imports. The standards that are set on the environmental impact of farming only apply to food produced in the UK. The UK already sets some standards for imports, such as the ban on chlorinated chicken, or the ban on hormone-grown beef, but these are related to food safety rather than environmental protection.

3.5.   The design of core environmental standards would need to take into account the different contexts of the UK’s trading partners, so that the applicable rules do not discriminate between foreign producers. The standards could not be any higher than those applicable to domestic producers, and would therefore represent a minimum regulatory floor, applicable to all farmers importing into and producing in the UK. As the regulatory requirements may change in the UK, the core environmental standards would need to be regularly reviewed to adapt to those changes.

3.6.  Similarly to CBAMs in other industries, setting core environmental standards for farming would need to consider the different capacities of farmers, especially smallholder farmers from the Global South, to adapt their methods to meet any new standards. This is a question of the infrastructure for proving that standards are complied with, as much as it is a question of applying them in the farming, e.g., whether there is enough capacity to keep electronic records, etc. There needs to be international support to build capacity for a transition to greener farming, and to build the infrastructure needed for the required checks.

3.7.   Putting in place core environmental standards would allow the UK to reach trade agreements with major agricultural exports like Australia, or the US, without the risk of offshoring its environmental footprint, and without undermining the UK’s attempts to green its agricultural sector.[8] By dealing with both GHG emissions and other environmental impacts, it would be a more appropriate and comprehensive method of dealing with the UK’s environmental footprint of consumption in agriculture than the CBAM, a mechanism more appropriate for other sectors.

October 2021

 

 


[1] WWF/University of Leeds (2020) Carbon Footprint: Exploring the UK’s contribution to climate change

[2] WWF/ZSL (2020) Living Planet Report 2020: Bending the curve on biodiversity loss 

[3] WWF_Briefing_problem_with_ghg_only_farming_comparisons.pdf (greeneruk.org)

[4] WWF_Briefing_problem_with_ghg_only_farming_comparisons.pdf (greeneruk.org)

[5] Planet-Based Diets | WWF (panda.org)

[6] WWF (2021) Driven to waste

[7] WWF (2021) Can environment emerge as a winner from a UK-Aus trade deal

[8] https://www.linkedin.com/pulse/can-environment-emerge-winner-from-uk-australia-trade-angela-francis/?trackingId=e55VW5JlRsyoKSj0Ng1G3A%3D%3D