Greenhouse Emissions from Agriculture

The recent United Nations Climate Summit put agriculture’s greenhouse emissions estimate at around 50 percent of global emissions when land use changes, deforestation, and food processing, packaging, and distribution are taken into account. Without those things, emissions from the agricultural production fields alone is estimated to be about 14 percent.

This above graphic breaks down the emissions which stem from the different categories involved in the global food production system contributing to climate change.

A United Nations Council on Trade and Development paper helps sort out the emissions numbers (below):

There are an enormous number of complexities involved in understanding agriculture’s role in greenhouse emissions. Each region and each farmer’s method varies widely, so we must attempt to make generalizations. Agriculture is the number one global land use-changer, water user, and destroyer of biodiversity.

An article in today’s WSJ contains one idea about how agriculture needs to change to reduce emissions:

Agronomist and coordinator at Grain, Henk Hobbelink, says the solution to reducing agriculture emissions lies in small farming and decentralized food systems.

“The more localized emissions of small farmers barely contribute to the overall agriculture emissions because they use very little chemical fertilizer, a main source of emissions, and produce more for local markets, so they don’t contribute as much to the transport emissions,” he said. Fresh foods also don’t create as much emissions from processing, freezing, packaging and storing in supermarkets.

The underlying factor driving all of this is population, of course. You cannot separate the issues of population from greenhouse emissions, although government policies (such as biofuels mandates) and our economic systems built upon growth (while ignoring environmental costs) also play large roles — as do our dietary choices.


This Week in Food and Agricultural Photos – September 25, 2014

People attend harvest grapes in the Parisian vineyard of Clos Montmartre on September 24, 2014 in Paris. On October, a wine harvest festival takes place in Montmartre to celebrate the new cuvee. Photo: ERIC FEFERBERG/AFP/Getty Images.

Indian farmers pose with cylinders containing farmed fish during a ‘Kisan Mela’ or farmers fair at Jethuwal village on the outskirts of Amritsar on September 20, 2014. Hundreds of farmers attended the fair which aims to educate farmers about fish farming , off-season vegetable farming and to promote discussion of their agriculture-related problems. Photo: NARINDER NANU/AFP/Getty Images.

This picture taken on September 18, 2014 shows piles of fresh garlic on sale along a country road in the outskirts of Urumqi, farwest China’s Xinjiang region. Xinjiang, home to some 10 million of China’s Muslim Uighur minority, with its vast mineral wealth and billions of dollars of investment, analysts say much of the proceeds have flowed to Han Chinese, stoking resentment amongst many Uighurs. Photo: GOH CHAI HIN/AFP/Getty Images.

Farmers demonstrate on September 24, 2014 against fiscal burdens and administrative constraints at a roundabout next to the western French city of Landerneau. Photo: DAMIEN MEYER/AFP/Getty Images.

Farmers dry harvested rice in a paddy field in Fujinomiya, Shizuoka Prefecture, Japan, on Monday, Sept. 15, 2014. Japan is self-sufficient in rice as the government imposes high tariffs on imports. Photographer: Tomohiro Ohsumi/Bloomberg via Getty Images.

A combine harvester machine works on a sunflowers field, on September 20, 2014 in the outskirts of Donetsk? eastern Ukraine. The country occupies the first place in the world by the amount of exports of sunflower oil and the second place by exports of sunflower seed. Furthermore, it ranks third by the amount of exports of rapeseed. Ukraine and pro-Russian separatists agreed a deal to reinforce a two-week-old ceasefire, calling for the creation of a demilitarised zone and the withdrawal of all foreign fighters. Photo: PHILIPPE DESMAZES/AFP/Getty Images.

American artist Dan Witz installs his new street art work ‘Empty the Cages’ as part of PETAs ‘Animals Killed For Food’ campaign on September 25, 2014 in London, England. Photo by Ben A. Pruchnie/Getty Images.

A Kurdish Syrian refugee children carries a bottle of water and a food package after crossing the Turkish-Syrian border near the southeastern town of Suruc in Sanliurfa province September 25, 2014. Nearly 140,000 Syrian Kurds have fled into Turkey since last week, the fastest exodus of the entire three-year civil war. The United Nations refugee agency said on Tuesday it was making contingency plans in case all 400,000 inhabitants of the Syrian Kurdish town of Kobani fled into Turkey to escape advancing Islamic State militants. Photo by Stringer/Getty Images.

NOTE that -this week in food and agricultural photos- is a Thursday weekly feature here on Big Picture Agriculture.

Financial Times Features Global Grain Surplus Story Plus Video

The Financial Times and commodities writer Gregory Meyer are known for their quality articles. They’ve covered the U.S. and global surplus of grain story in an article including a video (below).

Story here: Commodities: Cereal excess By Gregory Meyer. “Global grain supplies are soaring, which will cause an eventual slowing of food price inflation”

Book Review: ‘The End of Normal’ by James K. Galbraith

It had been a good five years since I’d read a book by an economist, so when Simon and Schuster offered me an opportunity to review James Galbraith’s new book with the plug, “The years since the Great Crisis of 2008 have seen slow growth, high unemployment, falling home values, chronic deficits, a deepening disaster in Europe—and a stale argument between two false solutions, ‘austerity’ on one side and ‘stimulus’ on the other,” I was glad to do so. Since I got my start in the blogosphere world over the subjects of peak oil and the economic crisis, it was about time for me to read Galbraith, who writes about both.

The banking system underlies everything that goes on in our maturing “democracy” which is structured around capitalism, and we sometimes lose sight of that fact as we plug away in our day to day work lives. Furthermore, our modern technologic and industrialized nation derives its economic power, comforts, food, and leisure time for its people through the consumption of affordable and readily available energy resources. In this book, Galbraith focuses on energy resource costs, our corrupt banking system, faulty thinking by economists, and a future which he predicts will be more dismal than the past, following our recent financial crisis which he views as a turning point.

Galbraith is a brilliant historian in the field of economics and this book includes his historical account of both the recent financial crisis and the last century. His efficiency of words is amazing as he provides short historical summaries packed with insights and critiques, especially of fellow economists who have written books or held positions deserving evaluation. The book is very valuable and worth reading for that alone. It is difficult for me to imagine anyone doing a better job of accurately and concisely summarizing and sequencing this recent economic history and it is richly informative.

Not only does he critique events as he recounts them, I really enjoyed seeing the questions he asked concerning the omissions from books that have been written by economists in recent years, especially in this time period since the crisis. Economists too often get a free pass even when they do not say what they should or when they do not address what should be addressed.

Regarding his fellow economists, he made some strong accusations. He described them as having a false expectation of normality with a belief that the market system tends naturally toward an end state of full production and high employment. And he accused them of using algebra equations to impress and baffle anyone beyond their own exclusive circles.

“The main purpose of the math is not to clarify, or to charm, but to intimidate. And the tactic is effective.”

He suggests what we’ve always suspected, that anyone who challenged this elite group of professionals could simply be told that they didn’t understand the math. Thus, the economists are further accused of only talking to each other, speaking their special code, and establishing their inner hierarchies, which Galbraith says is a perfect set up for disaster in predicting a financial crisis. The economists exist as academic “tribes” that are confined to making suggestions that are only tiny ventures from the established frictionless models so that the tribe continues to get along and accept each other.

Galbraith’s explains why economics is called the “dismal science”… there is a grim fatalism that even a prosperous society ultimately has low wages because of ever increasing population growth and the pressure of capitalist competition which always keeps driving down wages.

He explains that governments have used easy credit throughout history as a palliative to appease an otherwise frustrated populous, summarized by

“Dumb people got loans to keep them happy.”

It is easier politically to postpone a bill and opt instead for immediate gratification.

There are contrasts between capitalism and communism which are pointed out in this book. He mentions that there are many forms of price-fixing built into our “free markets” system which have always been ignored by economists.

Galbraith lists the reasons that the years from 1945 through 1970 were the golden years of growth, and he explains that he doesn’t expect to see them return because they resulted from a unique set of circumstances that we will not experience again. It was during that time period that the theory of economic growth, the solution for most economic problems, was invented by economists. This growth model, from day one, tended to ignore all of the important factors it relied upon, for example, resources weren’t in the models, even though the domestic peaking of oil production in the 1970’s created a pricing problem. The way Galbraith describes it, economists decided to ignore the physics and engineering systems which integrate materials, tools, and the energy that power them, and they turned economics into a “dematerialized” psychological subject.

Agriculture is frequently referred to in this book. To illustrate the importance of the cost of resources in today’s economies, he uses farming. He contrasts the relatively low input costs of peasant farming with the high energy intensive costs of industrial farming. One uses labor and reaps little; the other uses large amounts of capital and energy, and reaps a lot. He notes that peasant farming is stable compared to the industrial farming system with its high fixed input costs. He expects that if energy prices rise greatly, the industrial farm’s profitability will fall and the peasant farmers will not change much. (Note: I would argue that subsidization policies would intervene in that event and overproduction would discontinue, since industrial agricultural production is determined by policy. In other words, some slack would be removed from the system which would be forced to become more efficient; and, for essential production, input costs would be subsidized. Also, the industrial system offers much more in the way of food security and storage cushions than does the peasant system.)

His writing on technology and how it impacts economies is quite interesting. He points out that robots in the form of machinery are often tax-subsidized and are not taxed like labor. He says that in a resource-scarce world, those who try to preserve technology which can no longer be afforded will see the greatest loss in living standards. Though he uses corn ethanol as an example here, I could imagine a scenario where high gas prices and low subsidized corn production could make corn ethanol favored even more, depending what the other biofuel options would be at the time, especially when all of the infrastructure costs have already been covered by the taxpayer.

Galbraith believes that rising resource costs were a factor underlying not only the recent financial crisis, but also the crisis in the 1970s that had inflation which later disappeared, although no economic studies that he is aware of have suggested this.

Now, I am going to interject my own observation or conclusion which is one I never would have anticipated eight or nine years ago when I was caught up in the peak oil scare. Galbraith has a theme throughout this book where he blames economists for ignoring the costs of resources, particularly oil, in their explanations of economics. He criticizes economists who brushed off the Club of Rome challenges because, the economists said, those computer modelers “had forgotten the power of new reserves, new technology, and resource substitution” and that because “discovery, invention, and substitution had always worked in the past” that it always would in the future. But, as opposed to Galbraith, I’ve personally come around to viewing energy supply more like the economists view it, because their view certainly proved true following the last “peak oil” scare in the mid-2000s. We reacted to the recession, became more energy efficient, and the advanced technology of hydraulic fracturing came into play. I’ve learned from what happened and have concluded that the economists were largely right after all, whereas those of us who saw the “peak oil” situation in concrete terms were the ones who were wrong. This history could continue to repeat for many more years into the future, as there are more forms of fossil fuels to go after which are in abundance on this planet, for example, methane hydrates. In another example, efficiency and technological gains have been remarkable both for hydraulic fracturing and in the process of extracting oil from tar sands. Though resource/energy costs will most likely continue to stair step upwards, society can adapt along the way, just as the economists expect. That said, we are living on borrowed time for a geopolitical event which could cause an oil shock, especially with rising populations that depend upon oil and the ever present unrest and wars in the Middle East. This threat to our modern world is real. (Galbraith ignores climate change in his book although he acknowledges it in one sentence, just as I’ve ignored it in this paragraph.)

Lest anyone forget, he reminds us that at the peak of large bank financialization, banking earned 10 percent of all wages and 40 percent of all profits, calling large banks the highest of the fixed cost social structures.

To summarize the economic changes that have happened over the last three generations, he says, “the middle class has moved from being cash wealthy, to being house wealthy but indebted, and now, in the wake of the crisis, to massively illiquid and insolvent. Working off debts will be the way forward for a long time. There is no simple way, such as was provided in the 1940s by the war, to reverse this situation within a few years.”

He points out that prominent economists seldom mention the word “fraud” when recounting our recent financial crisis, when clearly there was fraud all around. Instead, Paul Krugman uses the words “reckless lending” and Joseph Stiglirz uses the word “mischief”. He disagrees with Krugman that monetary expansion alone is sufficient to end the depression which the crisis created. The fraud needs to be addressed first and foremost. Restraint as well as policing must be done.

People like Bill Black, Sheila Bair, and Neil Barofsky, lost in their efforts to police the crime that took place during this recent financial crisis. The do-nothing faction won, which he says was headed by the Treasury Department, the Federal Reserve, the Securities and Exchange Commission, and the Department of Justice. We must wonder and worry why the indictment of senior bankers most responsible for our recent crisis stands at zero, but more than a thousand industry insiders were indicted during the savings and loan scandal a few decades ago. This situation is yet to be remedied. (In recent news, the New York Federal Reserve Bank is holding a meeting this coming October 20 to address the unresolved problem of ethics in banking.)

Galbraith offers us a theory — that the recent scandal was motivated by a lack of good growth opportunities elsewhere. This was related to scarce or expensive resources. Fraud took over because it was expedient to allow the financial system to make up for lack of growth opportunities elsewhere.

Since the crisis, financial forecasts have been too optimistic, he thinks, because they are cast by those with vested interests, and because economists err on the side of cautiousness, never venturing far from the mean, and, they look too much to the past. Galbraith doesn’t see the future mirroring the past.

He believes that while military power may have been helpful in obtaining resources at low cost in the past, “the nature of military power (today) has become such that no dominant power can any longer exist”. So, he feels the majority of our nation’s spending on military is wasted. And, he says, “the dangers we face, and in particular the barriers to economic growth, have no remedy by military means.”

In a very convincing and fun-to-read chapter, he sees recent technologic advancements a major cause of employment losses. There is a particularly wonderful paragraph that lists the vicious cycle of technologies which have all led to lower wages and fewer jobs for workers. It was one of my favorite paragraphs in the whole book.

He points out that it didn’t cost much to have kids in the 1950s and 1960s, but now, the fixed costs related to having children are high and a deterrent to having them. (This might be a good opportunity to note an omission of Galbraith’s in this book: no mention of demographics in predicting future economic outcomes in this system reliant upon growth.)

Galbraith explains the U.S.’s advantage of “asymmetry” because of the world’s choice to denominate trade in the US dollar, plus, the desire of foreign nations to hold our Treasury bonds and bills. Inflation along with a devalued dollar would be a valid worry, he says, and would lead to high energy prices. But, he does not worry too much about a rising debt-to-GDP ratio leading to “instability”. The U.S. has no choice but to run a budget deficit in order to produce the bonds and bills that others wish to hold. This makes the oil and Asian goods flow into the U.S. while our accounting books balance perfectly.

His conclusion states, “A new economics must rest on a biophysical and institutional framework, recognizing that fixed capital and embedded technology are essential for efficient productive operations, but that resource costs can render any fixed system fragile, and that corruption can destroy any human institution.” This, he says, is his Dad John Kenneth’s economics of organizations modified to emphasize that large, complex systems are not only efficient but also rigid. These systems which become habit, can lose efficiency and destabilize when conditions become adverse.

He uses the phrase “efficiency and fragility are two aspects of the same system” as it relates to the subjects of resource costs and legal integrity. I like that quote as it relates to industrial agriculture production, too. No longer a national problem, but now a global one, he tells us

“We have become very large, very complex, very efficient——and therefore we have become very fragile.”

Technology is leading to fewer jobs, lower paying jobs, and fewer economic opportunities. We don’t need the big banks. Instead, the only banking that we really need could be run by states or postal services. A shorter work week should be considered, and we need to find “new areas of useful paid work.” Taxes on labor should be cut and taxes should be increased on the use of scarce resources such as land, minerals, and energy.

In a chilling end-chapter, he describes the fall of the Soviet empire. Why was it chilling? It woke me up to the many parallels between that system and the trajectory that our own so called “democracy” seems to be on.

Certainly, Galbraith is not concerned with belonging to any of the established tribes of economists, as he strays by a long margin from them while defending the common man. He is a hero for speaking up.