Takeaways from the COP27 and implications to South American grain and cattle sectors

By Guil Signorini, Department of Horticulture and Crop Science, The Ohio State University

Between Nov. 6 and Nov. 20, world leaders gathered in Egypt for the 27th United Nations Climate Change Conference (COP27). Despite criticisms that became viral via social media regarding the large amounts of greenhouse gases (GHG) emitted by thousands of private jets flying to the conference, world leaders discussed and deliberated about environmental policies to manage global warming.

Inconsistencies aside, the COP27 showed a continuing and strengthening collaboration between public and private parties in a pragmatic route to accomplish the resolutions of the Paris agreement. The Paris Agreement is an international treaty signed in 2016 by 194 world leaders in which countries take on the responsibility to cap global warming at 1.5degrees C above pre-industrial average temperatures. Despite a large number of signatories, the Paris Agreement is not free of criticism, leading to the United States’ withdrawal in 2020. (In 2021, Joe Biden signed an instrument to bring the United States back into the Paris Agreement).

And speaking of questionable resolutions, the COP27 wrote a new chapter to this story with direct implications for South American farmers. This time, a group of 13 agricultural and food companies developed the Tropical Forest Alliance (TFA) draft plan proposing private actions and enforcement mechanisms to limit climate change. Large commodity groups like ADM, Bunge, Cargill, JBS, and Viterra signed the draft plan.

It turns out that the TFA plan to address GHG emissions angers responsible South American grain producers and cattlemen. While the document is well intended and responds to value chain pressures to manage one of the world’s most pressing environmental challenges, its idealizers must be open to dialogue and refinements. In what follows, this article examines two arguable elements from the TFA document that, in the writer’s opinion, can be reformulated to improve transparency and better balance the responsibility for climate change around the globe.

1. The roadmap needs to use more accurate metrics.

As written, it invites commodity processors and food manufacturers to create and enforce private mechanisms through their supply chains that interfere with growers’ property rights and decision-making. The plan focuses exhaustively on the conversion of idle land into farmland and its impact on GHG emissions. It abandons the accepted “net emissions of carbon dioxide equivalent (CO2-eq)” metric, frequently used by the Intergovernmental Panel on Climate Change (IPCC), to a seemingly agenda-driven metric. Consequently, the TFA draft plan creates an expensive toll on production enterprises with land available for conversion while clearing established agribusinesses that converted areas in the past. In other words, it attributes most of the global warming responsibility to productive corn and soybean areas of developing countries. And it does so more specifically in Brazil, Argentina, and Paraguay, as the document mentions the Cerrado and Chaco biomes.

The deliberated choice for a less comprehensive metric leads agribusiness analysts and commentators to interpret the document as an attempt to establish a nontariff trade barrier. The use of an inaccurate metric associated with a targeted geographical scope sounds like a document prepared to protect the international market share of countries with less competitive production costs.

If the TFA plan used the usual CO2-eq metric instead, agribusinesses worldwide would better share the responsibility of adapting operations to contain global warming. Ag-food companies could adopt incremental targets, promote regenerative agriculture within their value chains, and monitor the adoption rate of best management practices. Not only those with suitable land for development would pay the toll. South American grain farmers could develop new production sites and replant native forests elsewhere to compensate CO2-eq emissions with sink or sequestration. And above all, production decisions could be taken without fearing sanctions from commodity processors and food manufacturers holding oligopsonistic power.

2. The roadmap needs to recognize the effectiveness of the current environmental law.

What it does instead is to propose rules that are more restrictive than the Brazilian Forest Code —  one of the strictest environmental laws in the world. According to the current Code, private properties within the Amazon biome must preserve 80% of the native cover; properties in the Cerrado-Amazonia transition (CAT) biome must maintain 35% of the native vegetation; and production properties located elsewhere must keep 20% of the original covers. The Code makes landowners subject to fines and incarceration in case of frequent infractions. Again, the TFA plan departs from an apparent agenda-driven concept and defines deforestation as any land conversion of areas with natural canopy cover as low as 10%, regardless of whether it occurs within private properties or public lands.

It is safe to say that responsible corn and soybean growers care about the environment and observe the existing law close. To demonstrate the effectiveness of the Forest Code and the environmental responsibility of growers, readers are invited to a simple exercise.

  • Open Google maps and select the “satellite” view.
  • With the satellite view mode on, type the name of any important grain-producing hub in Mato Grosso, where Amazon and CAT biomes occur: Sapezal, Primavera do Leste, Sorriso, Sinop, and Lucas do Rio Verde are examples.
  • Zoom out slightly.
  • The dark green patches are preserved vegetation within the boundaries of productive grain or cattle farms. One may notice that agribusinesses and forests coexist just fine.

Despite the flaws in the present version of the TFA plan, its positive intentions must be celebrated. Policymakers, private sector executives, and NGOs are converging efforts to address a major challenge for humankind. Most importantly, they are doing it to respond to the concerns of an increasingly vigilant society. The TFA draft is a fine starting point for an FAO-ratified plan to limit the rise of global temperatures by 1.5degrees C above pre-industrial averages, announced to be released at COP28 (Nov. 30 thorough Dec. 12, 2023). But it needs some serious adjustments. Solid concepts and metrics exist for a reason, and we must stick to them. Growers and cattlemen should be involved in the preparation of industry-specific roadmaps. I certainly share the frustration with South American peers when we are told what to do without having a chance to partake.

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