How carbon accounting will play into trade


The Trade and Climate Change conference was held virtually on April 7 to 9, 2021, and was a joint effort of U.S.-based Farm Foundation and the Canadian Agri-Food Policy Institute (CAPI).

The objective of the conference was to explore topics in the context of global trade, where climate change policies have become “increasingly ambitious and diverse among international players,” according to the conference organizers.

RealAg Radio host Shaun Haney was recently joined by Joe Glauber, senior research fellow at the International Food Policy and Research Institute in Washington, D.C. Haney’s first question after Glauber presented at the conference? What his opinion is on how climate issues have “slid” into the trade file recently.

On a more domestic scale, Glauber says there has been more openness within the U.S. agriculture community to discuss things that can be done to mitigate GHG emissions.

“When I was chief economist at USDA back in 2009, U.S. Congress debated a fairly major climate deal and there was pretty much just opposition in the ag community, and I think that’s changed a lot because people have seen the extremes in weather,” says Glauber.

Canada and U.S. generally have the same vision when they sit down at the same table, but if China or India were at the table, climate change mitigation works into trade talks differently (story continues below).

There’s an internal discussion going on in countries such as Canada and the U.S. and China, and they’re changing practices. The U.S. will use subsidies to encourage practices that emit less GHGs or sequester carbon; but the question is, does that get used in the international accounting for how much the U.S. emits?

Additionality and permanence are two words that throw a wrench into the whole system of the calculation on a global scale — every country will have a different approach. The accounting will have to be worked out in a way that isn’t only satisfactory to those running the programs, but also from an international perspective, says Glauber.

Carbon tariffs and border adjustments are also a hot topic — a country would apply a tariff on a product coming in that was produced with less sustainable methods than in their own country.

“They have to be done in a way that’s not prejudicial to an international supplier,” says Glauber. “You can’t apply a tax that you’re not applying equivalent tax on domestic purchases.”

Related: Future trade may require a roadmap of climate change initiatives

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