Food sector emissions accounting: Sharing responsibility across the value chain

“To meet the Paris climate targets, reducing emissions in the food sector is key, for this sector alone accounts for roughly a third of all emissions when looking at the whole chain from production, processing, transport to land use. Operationalising this reduction requires knowing where and how much emissions occur – the so-called emissions accounting,” explains Prajal Pradhan, study author from the Potsdam Institute for Climate Impact Research.

“Classically, there are two ways of counting the tons of carbon emitted in producing food: Either at the producing country, i.e. the farm gate, or at the consuming end. While both approaches yield the same total amount of emissions, where the emissions are counted does make a huge difference, particularly when it comes to responsibility.”

That’s where the idea of trade-adjusted emissions comes in. Global trade in agricultural goods has increased six-fold over the last 40 years in terms of import value with an increased complexity. In many cases, a product does not go straight from the producing to the consuming country, but rather passes through intermediary countries that are only involved in trading but are making a profit as the product makes its way across the globe. By adopting an emissions accounting approach that uses trade data reported by countries, the team of researchers from PIK and University of Landau have incorporated those intermediaries into the accounting process, thus broadening the base of responsibility to include all three: producers, consumers and intermediaries.

“In this way, everyone in the value chain is empowered to change for the better,” Adrian Foong, lead author of the study, lays out. “By accounting for emissions in the way proposed in this study, intermediaries would have the incentive to source their goods more responsibly, meaning choosing goods produced at less emissions per piece – what we call ‘emission intensity’. One effect might be that, in order to lighten their own emissions burden, high-income countries – traders or consumers- might pursue more technology transfer to low- and middle-income countries to lower their emission intensities.”

But there are more use cases, as Jürgen Kropp, deputy-chair of PIK's Climate Resilience Research Department, explains: “Another interesting use case would be bilateral trade agreements or yet even emission related border taxes: If you include emissions that reflect the trade in agricultural goods, there is more leverage to push countries to ramp up their efforts to combat climate change.”

The findings of this paper contribute to recent discussions on considering carbon emissions in EU trade regulations, adds Oliver Frör, author and resesarcher at University of Landau: “Our calculations of trade-related emissions in the food sector clearly show that any emissions related trade regulations like the discussed Carbon Border Adjustment Mechanism would need to include agricultural goods and food products in order to be effective”.

Yet looping in intermediaries into the emission calculations does not mean that the other ends of the line, producers and consumers, are no longer responsible. Jürgen Kropp: “To make any lasting changes to the big chunk of global emissions that stem from our food system, we fundamentally need to make production more sustainable and change consumption patterns, too: More fruits and vegetables, less waste.”