Equilibrium/Sustainability — Presented by The American Petroleum Institute — Scientists potty train cows to cut pollution

Today is Tuesday.  Welcome to Equilibrium, a newsletter that tracks the growing global battle over the future of sustainability. Subscribe here: digital-staging.thehill.com/newsletter-signup. 

Scientists have begun toilet-training calves in an effort to minimize the environmental havoc their urine wreaks on surrounding soil and waterways, Bloomberg Green reported.

While methane emissions associated with cattle belching have long been a topic of interest in climate discussions, the potential of nitrate-laden cow urine to contaminate land and water has flown under the radar. In addition to producing nitrous oxide, a potent greenhouse gas, the fluid also mixes with fecal matter to generate toxic ammonia, according to Bloomberg. 

The scientific solution? Potty-train your calves, scientists from the University of Auckland and the Germany-based Leibniz Institute for Farm Animal Biology told Bloomberg. 

In a trial involving 16 budding bovines, the researchers rewarded the calves with treats when they urinated in a latrine pen called the “MooLoo,” Bloomberg reported. But when they missed, they encountered a squirt bottle filled with cold water. 

As Sharon contemplates the efficacy of the MooLoo for potty-resistant 3 year olds, we’ll delve into a new United Nations report and explore other efforts to create more sustainable agriculture. Then we’ll look at the creeping danger climate disaster poses to the U.S. financial system, and how small annual risks can add up to long-term catastrophe.

For Equilibrium, we are Saul Elbein and Sharon Udasin. Please send tips or comments to Saul at selbein@digital-staging.thehill.com or Sharon at sudasin@digital-staging.thehill.com. Follow us on Twitter: @saul_elbein and @sharonudasin. 

Let’s get to it.

UN calls for multi-billion ‘repurposing’ of ag help 

A United Nations report released Tuesday found that about 87 percent of the $540 billion in government support allocated to farmers globally each year is “environmentally and socially harmful.”

The $470 billion worth of “agricultural producer support” includes artificially high price incentives, such as import tariffs and export subsidies, as well as fiscal subsidies that favor the production of a specific commodity, according to the study compiled by the Food and Agriculture Organization (FAO), the U.N. Development Program (UNDP) and the U.N. Environment Program (UNEP).

What’s wrong with these types of incentives and subsidies? These mechanisms are not only inefficient, but they also “distort food prices, hurt people’s health, degrade the environment, and are often inequitable, putting big agri-business ahead of smallholder farmers, a larger share of whom are women,” a news release accompanying the report explained.   

“This report,” FAO director-general Qu Dongyu said in a statement, “is a wake-up call for governments around the world to rethink agricultural support schemes.” 

What exactly is “agricultural support?” The report defined this as “any form of financial support for agriculture resulting from government policies,” while “agricultural producer support” involves “transfers to individual farmers, in the form of both price incentives and fiscal subsidies.” 

Today, agricultural producer support makes up 15 percent of total agricultural production value. That number is expected to triple by 2030 to $1.759 trillion, the news release said.

So what did the authors find? Of the total $540 billion in annual support, the authors found that about $294 billion goes to farmers in the form of price incentives, while the remaining $245 billion includes fiscal subsidies.

Authors found that about $470 billion — or 87 percent — goes to price incentives and subsidies that pigeonhole growers into cultivating single commodities, while only about 13 percent is “decoupled from the production of any given commodity” — meaning, those funds don’t need to support a specific volume or type of crop, and can therefore enable diversification. 

For example, the report explained, financial support for the specific production of rice, milk and livestock — all greenhouse gas intensive commodities — creates “potentially adverse effects on climate.” From 2005-2016, the production of sugar, rice and animal products earned the strongest price incentives, while nutrient-rich fruits and vegetables “were penalized,” thereby promoting food variety  and healthier diets, according to the authors. 

 

PRESENTED BY API

 

The Environmental Partnership recently released its annual report highlighting its new flare management program that reported a 50 percent reduction in flare volumes from 2019 to 2020. Read more.

A TRANSFORMATIVE OPPORTUNITY

Is there a better option for ag support? Yes; authors behind the U.N. report advocate for monetary transfers that support infrastructure, research and development, which is “most conducive for sustainable growth.” But during the same 2013-2018 period, they found governments only funded an annual average of $110 billion in these so-called “general sector services.”

What can be done? As governments begin implementing their own repurposing strategies, the authors advised officials to move forward through six steps:

1. Quantify the support already provided
2. Assess the impact of the existing support
3. Design a mechanism to repurpose the support that includes any necessary reforms
4. Forecast future impacts of the overhaul
5. Refine the strategy prior to implementation
6. Monitor the outcomes of the new support system

Shifting “agri-food systems” in this manner would “boost the livelihoods of the 500 million smallholder farmers worldwide — many of them women — by ensuring a more level playing field,” UNDP administrator Achim Steiner said in a statement.

Social benefits, plus emissions reductions: In addition to making the agricultural playing field more equitable from a social perspective, redirecting these billions of dollars to general sector services like infrastructure, research and development could also help countries meet emissions reductions goals set in the 2015 U.N. Climate Change Conference, the authors contended.

For high-income countries, this would mean moving away from “an outsized meat and dairy industry,” which is responsible for 14.5 percent of global emissions. For lower-income countries, it would mean repurposing support of toxic pesticides and the cultivation of single crops, according to the report. 

“Governments have an opportunity now to transform agriculture into a major driver of human well-being,” Inger Andersen, executive director of UNEP, said in a statement. 

Click here to read the full story.

Climate change poses ‘domino’ risk to US economy, study finds 

The domino effects of climate change threaten not only sizable chunks of individual bank portfolios but also the financial system at large, a study by the sustainability nonprofit Ceres has found. 

First steps: Ceres looked at the danger to banks’ portfolios from “physical risk” from climate change — meaning potential financial losses posed by dangers like fire, flood, tornado or sea-level rise.

Though those risks are “baked in” over the next two decades from past emissions, cuts made now could lead to dramatic reductions in physical risk over the long term, the report noted, making those cuts “critical,” and something that banks “already have an overwhelming business case for.”

How bad are these risks? They’re like compound interest: The numbers look low, but they grow implacably, year by year. 

Across all banks surveyed, 2.5 percent of the value of their portfolio is at risk by 2080 under the scenario of an “Orderly Transition” to net-zero, with global warming limited to 1.5 degrees Celsius. That risk rises to 3.1 percent under a “Hot House World” scenario of limited emissions cuts. 

Without serious spending on adaptation, that Hot House number goes up to 4.1 percent.

A few percent doesn’t sound so catastrophic. Maybe, but the amount of capital at risk here, study co-author Steven Rothstein noted, is higher than the amount that was invested in the low-value subprime mortgages whose 2008 collapse began the domino effect that cratered the global economy.

“Our nation’s largest banks should not assume, as they did in the 2008 crisis, that they are insulated from the reckless decisions of their peers, or nimble enough to avoid destabilizing losses from climate damages,” Sen. Brian Schatz (D-Hawaii) wrote in an introduction to the report.

 

RISKS ALL THE WAY DOWN

Also, those aren’t the only risks. A 2020 Ceres report by this study’s coathors found that more than half of loans by major banks were at risk from the energy transition.

There’s also the related risk that a U.S. court could rule that carbon emitters are liable for damages caused by climate change, leading “to a system-scale shock,” the authors wrote.

Insurance and opportunity cost: There’s also the risk of a major insurance default, which would radically reshape how the national economy assigns risk.

Finally, there is a steep opportunity cost, the report found. “There are substantial business opportunities available in adaptation finance that will be taken up by others if U.S. banks do not move quickly.”

What should banks do? The transition to a safer world is going to take years, so it’s important that banks start doing the analysis and planning now, Rothstein told Equilibrium. “They should go through all their big loans — and work with customers in real estate and heavy industry and ask them to come up with climate plans.”

How steep should their cuts be? “I’d hope for 50 percent [by 2030], but whatever works for them,” Rothstein said “They need to be able to say, ‘We’re cutting X percent by 2030, from this, that and the other sector, and we’ve talked to the customers” about how to do it.

To read more about climate risks threatening the banking system — and how to protect against them, click here.

PRESENTED BY API

 

The Environmental Partnership recently released its annual report highlighting its new flare management program that reported a 50 percent reduction in flare volumes from 2019 to 2020. Read more.

Transport Tuesday 

The complications of moving malt, children and vacationers by boats, planes and buses.  

On the Hudson River, a revival of sail-powered shipping

• Some Hudson Valley farmers and Brooklyn restaurateurs are experimenting with a new low-carbon option to move goods: a wind-powered schooner called the Apollonia, The New York Times reported.
• “Some things need to be overnighted; most things don’t,” said Ben Ezinga, one of the co-owners in the shipping venture. “There’s an incredible carbon footprint to that speed.” 
• The Apollonia offers a qualitative advantage, Hudson, N.Y. malt-maker Dennis Nesel told the Times. “With tractor-trailers picking up our freight, sometimes the stuff that we have scheduled to go to Brooklyn ends up in Herkimer or Syracuse… That doesn’t happen with the Apollonia.”
• But despite glimmerings of interest around the North Atlantic, a serious expansion in sail freight will require society to start “reinvesting in waterfront infrastructure,” the Apollonia’s captain, Sam Merrett, told the Times. “One boat is never going to do that. It needs to become a pattern.”

Massachusetts governor recruits National Guard to drive school buses

• Massachusetts Gov. Charlie Baker activated the National Guard on Monday to help shuttle students to school amid a pandemic-related nationwide bus driver shortage, 7News Boston reported. 
• “The safe and reliable transportation to school each day is critical to our children’s safety and education,” Baker said, according to 7News.
• Up to 250 National Guard members will be available to drive school transport vans following Baker’s order, which will serve the Chelsea, Lawrence, Lowell and Lynn communities, 7News reported.

Biden sustainable jet fuel deal has an Achilles heel: There’s still no such thing

• Last Thursday, the Biden administration and the U.S. airline industry agreed to “replace all jet fuel with sustainable alternatives by 2050,” with a goal of 10 percent by 2030, The New York Times reported.
• One problem: Even if the industry honors its commitment — and it has quietly dropped past ones, the Times noted — no such sustainable fuel exists. Corn-based ethanol “emits just 20 percent less greenhouse gas emissions than gasoline,” and far more if the land to grow that corn was converted from forest, The New York Times noted, citing the Environmental Protection Agency.
• While corn and soy ethanol were originally cut from the proposal, those industries have been granted a review of that decision, the Times reported.
• “The problematic part is that today’s biofuels don’t reduce greenhouse gas emissions,” University of Minnesota bioproducts professor Jason Hill told the Times. “That’s not where the state of the science is. They can actually make them worse.”

 

Please visit The Hill’s sustainability section online for the web version of this newsletter and more stories. We’ll see you on Wednesday.{mosads}