Via Craig D. Idso – September 15, 2022
“…$150 per ton of CO2-equivalent (CO2e) tax [is estimated to globally] … Increase the price of milk by 49 percent, the price of rice by 67 percent, and the price of beef by 108 percent. “
Throughout my career, I am often asked by stakeholders if there are any downsides to doing CO2 emissions reduction policies if there is no chance that future climate change model predictions may be correct. These well-intentioned people don’t necessarily believe or buy into the mantra of global warming extremism, they are simply looking for some kind of insurance policy to assuage fears that build up. from the constant stream of projections of the coming climate apocalypse.
And so when legislation like the US Inflation Reduction Act of 2022 is recently brought up for debate, they either stay silent or simply follow the crowd, assuming or wanting to believe that such legislation is just the right thing to do. the insurance they had hoped for.
But it’s not. Nor is it the end of efforts to limit CO .2 emissions, as it has been publicly stated since the days of the Obama Administration that climate alarmism has nothing to do with saving or improving the environment, but everything to legislation on the use of fossil fuels is forgotten. And that objectively brings some rather serious consequences to society.
For example, consider the fact that fossil fuels (coal, gas and oil) currently account for about 84% of total global energy production and 63% of global electricity production. By delegating these resources into oblivion without an adequate supply of alternative resources to replace them, such policies are creating scarcity in the market, which inevitably leads to higher energy prices. As a result, any good or product in the process of energy production will be affected by higher costs — we have at least one significant downside to issuing CO2 emissions reduction programs.
Nowhere is this more evident than in the agricultural sector of the economy, which relies on low-cost energy to produce food and other products needed to sustain life on the planet. As the cost of producing agricultural products increases, those costs are passed on to consumers, thereby reducing disposable household income, which also burdens the poor.
In recent months, we have all experienced the sour taste of this unfortunate chain of events to one degree or another as we have to deal with rising gas prices contributing to rising food prices. . However, that experience is only the tip of the iceberg compared to what would happen if CO2 emissions reduction policies are not reversed and eliminated altogether.
In this regard, Figure 1a shows the results of a peer-reviewed study by Frank et al., who tested the effects of CO quite rigorously2 policies to reduce emissions in the agricultural sector. What they found was $150 per ton of CO2-equivalent (CO2e) taxes that significantly increase the prices of important food commodities. Average for the whole world, for example, Such a tax would increase the price of milk by about 49 percent, the price of rice by 67 percent and the price of beef by 108 percent..
Figure 1. Relative price impact of $150 per tCO2e carbon tax on emissions from agriculture on global commodity prices (table a) and regional food price indexes (table b). CIS-Community of Independent States, EAS-East Asia, EU28-European Union, LAM-Latin America, MEN-Middle East and North Africa, South-North America, OCE-Oceania, SAS-South Asia , SEA-Southeast Asia, SSA-Sub-Saharan Africa, WLD-World. Adapted from Frank et al. (2017).
As a result of the researchers’ findings, they estimate that the global food price index would increase by nearly 40% in response to a carbon tax of this magnitude (see Figure 1b). Larger increases of 60 to 100% are forecast for Oceania, Southeast Asia, Sub-Saharan Africa, South Asia and Latin America. Sadly, these regions have the most inefficient agricultural production systems and their populations will therefore be disproportionately burdened with the expected global average increase in the wage price index. real. But higher food prices are not the only negative outcome associated with this scenario.
Figure 2 depicts the relationship between the greenhouse gas mitigation targets and the projected average global calorie consumption for 2050. As seen there, as follows the blue line to the right, the efforts today increasingly ambitious to stabilize the climate by taxing carbon (or any other form of CO .)2 emissions reduction plan for that matter) leads to a greater reduction in the daily dietary energy of the average person. For example, using the IPCC Representative Concentration Roadmap (or RCP) scenario that limits projected future warming to 1.5°C, we find that $190 per ton of CO2 The equivalent tax reduces daily calorie intake by 285 kilocalories per person per day, which equates to a 9 percent reduction in calories. At first glance, this drop may not seem so significant, but it translates into Globally, the number of chronically undernourished people has increased by 300 millionrepresent a huge 150% increase on those who are currently dominating the genre!
Figure 2. Global Annual Mitigation Potential for Agriculture, Forestry and Other Land Uses (AFOLU) in GtCO2eq per year-first by 2050 compared to the global average daily dietary energy consumption (kcal per capita per day), compared with the baseline without mitigation efforts. The blue line represents the policies that all countries participate in to achieve increasingly ambitious climate stability goals. The text next to the blue squares shows the carbon price (tax) associated with achieving climate stability for a given representative concentration pathway (RCP) and the associated global temperature decrease. its outlook in 2050. Adapted from Frank et al. (2017).
Inference
There is a clear downside to CO . pricing2 emissions. Not only is it detrimental to many sectors of the economy, but to an increasingly ambitious level it comes at the expense of food security and human health. Unfortunately, it will probably take a deeper trip down CO2 reduce rabbit hole emissions than we are currently witnessing before society feels the real pain of these schemes and is wise to stop it.
References
Frank, S., Havlík, P., Soussana, J.-F., Levesque, A., Valin, H., Wollenberg, E., Kleinwechter, U., Fricko, O., Gusti, M., Herrero, M., Smith, P., Hasegawa, T., Kraxner, F., and Obersteiner, M. 2017. Reducing greenhouse gas emissions in agriculture without compromising food security? Environmental Research Letter twelfth: 105004.
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