Will carbon credits create food shortages?

Sheep....it may not be what's for dinner anymore.

I just came across this piece from Bloomberg Businessweek titled “New Zealand Farmers Harvest Carbon Credits” that seems to have some nefarious implications about what carbon credits could do to the world’s food supplies.

…a carbon emission trading system that kicked off in July is upending the economics of sheep farming, a once crucial sector of the economy. Sheep farmers are walking away from the business of selling wool and lamb chops and are converting their grazing lands into tree farms that could prove valuable when the country’s agricultural sector is forced to pay for greenhouse gas emissions starting in 2015.

While that may seem “valuable” when it comes to paying for greenhouse gas emissions, it certainly doesn’t seem very valuable as far as the world’s food supply is concerned. According to them it’s not even going to make any difference in their emissions.

Prime Minister John Key’s government in Wellington has said a carbon trading regime probably won’t have a big impact on the country’s greenhouse gas emissions, yet will boost the country’s green credentials and clout in global climate talks.

Seems like some fat egos in New Zealand are more concerned about being stylish on the world scene than being realistic or worrying about what this may do to the food supply in the future. I mean why in the hell would you spend a wad of money for something that isn’t going to do anything? This reminds me of some the scams you see on TV for various “medicines” that aren’t government tested or approved yet come with claims of providing miracles.  One would think if there was something out there that would make your wanker grow that some huge drug company like Bayer or Pfizer would have already discovered it and had a patent on it and be raking in billions.

So why would the sheep farmers get all excited about this scheme? Well it seems there are problems in Sheepland such as:

  • “Although New Zealand was the world’s largest sheep meat exporter last year, the number of sheep have fallen from a 1982 peak of 70 million to about 40 million”
  • “The government’s carbon program is also a welcome opportunity for some sheep farmers, struggling against slumping wool prices, drought, and competition for land from the dairy and lumber industries”
  • “Farmers who convert their land from sheep grazing to planting trees could add $172 per acre in value each year to their land holdings”

Think about it. You have less sheep to deal with, which means less feed to buy and less help to pay for and you plant trees that sit there and do nothing and require little if any care, plus you get paid for it. Sounds like a dream come true – get paid for doing basically nothing. But that old adage, ” if it sounds too good to be true it usually is.”

While this may sound good to your friendly neighborhood sheep farmer, it does have other implications on the economy such as “losing jobs once held by shearers, mechanics, and veterinarians.” You can extrapolate that to the shearers, mechanics and veterinarians aren’t going to be spending any money so we will soon have problems with other businesses such as restaurants and stores losing business or even going out of business.

It also isn’t the panacea it’s promised to be, as there are other issues surrounding this:

  • “farmers are being sold on carbon trading without understanding that they could lose trees to fire or disease”
  • “the government might cancel the program at any time”

So what we have here is another global warming failure in progress. By the New Zealand’s government’s own admission it’s not going to accomplish much in the way of emissions reductions and it has a lot of potential problems.

Let’s get to the food issue. I see global warming not as a reality but as something that is trendy with the green crowd, a potential maker of billions for people in on the carbon trading schemes, and a killer of jobs and economies due to the increased costs of doing business due to carbon taxes. If that’s not enough we now have the potential to create food shortages.

We now have a foot in the door by paying people not to raise sheep. What next? We pay people to not raise cattle and chickens? Crops such as corn and soybeans are currently being partially diverted from feeding people to making ethanol for cars.  How much more will the price of those crops rise if there’s additional shortages created by farmers electing to plant trees instead of grow corn? How much less food will be around because of this?

Think I’m kidding? Just look at the bump in wheat prices due to Russia putting a ban on exporting it due to the recent fires? Imagine if 1/3 of the world’s wheat farmers decided to plant trees and not bother growing wheat anymore? Will there be enough? Will the poor be able to afford it? Will the middle class see their food bills rising to the point that it’s a burden? Here’s a clip from the Washington Post.

Russia announced Thursday that it will ban all grain exports for the rest of the year, sending wheat prices soaring to a two-year high and raising the possibility of inflated food prices that could throw an already fitful global economy recovery off track.

Wheat prices in 2010

You can see from the above chart what the prices have been doing. Below is one effect of price increase and shortages of wheat.

In Egypt — one of the biggest importers of wheat and a nation that experienced deadly violence in bread lines two years ago — the government assured the public that it has a four-month supply of wheat and urged Russia to honor contracts it signed before the ban. In Europe, the United Kingdom’s Premier Foods and Switzerland’s two largest food retailers warned consumers that they may increase prices of products that contain wheat, from crackers to beer.

That Russian wheat is only about 11% of the total world market and yet you can see the actual and easily imagine the potential effects a shortage could have in countries that are dependent upon wheat imports.

So what’s worse? Dying from global warming or food shortages? Sometimes I wonder if there isn’t some other undercurrent going on here that all this is more about population reduction than it is about global warming. Adding the potential of food shortages due to carbon trading schemes just seems to reinforce that idea.

Maybe artificial meat or soylent green will become popular.

More CO2 Insanity.

Source: Bloomberg Businessweek

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2 Comments

Filed under Carbon Trading, Co2 Insanity, Food, Global Warming, Government, Politics

2 responses to “Will carbon credits create food shortages?

  1. SID

    Great article. I never thought carbon trading could effect Food shortage and wildlife damage too but we all know that both the concepts are important for human species.
    I just hope both these useful aspects goes hand by hand without harming each other as carbon trading is a field of economical as well as biological profits too.

  2. this topic adds new think in our minds its just wow an eye opener for us carbon trading could effect Food shortage and wildlife damage as the food will decrease we will have less wildlife hence food chain and food web will be inbalanced :/