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Environmental Impact:Food Transportation

April 28, 2008

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Adam returned from a few days away. One of the first things he came across was this extremely disturbing article in the New York Times on the environmental impact of transporting food. He had been labouring under the misapprehension that New Zealand had been making some inroads into the irrational food miles debate. It would appear not.

The article begins by noting:-

Cod caught off Norway is shipped to China to be turned into filets, then shipped back to Norway for sale. Argentine lemons fill supermarket shelves on the Citrus Coast of Spain, as local lemons rot on the ground. Half of Europe’s peas are grown and packaged in Kenya.

So far nothing new, Adam was expecting to read the usual comments on why do this. However, this was merely initial scene setting. Then in the next paragraph was the first statement which Adam found disturbing:-

In the United States, FreshDirect proclaims kiwi season has expanded to “All year!” now that Italy has become the world’s leading supplier of New Zealand’s national fruit, taking over in the Southern Hemisphere’s winter.

Now that comment was news to Adam. He was aware that Zespri had some orchards in Italy, but he he had not realised that New Zealand was no longer the leading supplier of kiwifruit. This, though concerning, is not the main issue which Adam is concerned with.

A couple of paragraphs later came this:-

Increasingly efficient global transport networks make it practical to bring food before it spoils from distant places where labor costs are lower. And the penetration of mega-markets in nations from China to Mexico with supply and distribution chains that gird the globe — like Wal-Mart, Carrefour and Tesco — has accelerated the trend.

But the movable feast comes at a cost: pollution — especially carbon dioxide, the main global warming gas — from transporting the food.

Of itself this is not new, and formed part of the original global miles argument. But then consider this:-

Under longstanding trade agreements, fuel for international freight carried by sea and air is not taxed. Now, many economists, environmental advocates and politicians say it is time to make shippers and shoppers pay for the pollution, through taxes or other measures.

Now Adam had not been aware of the duty exemption on freight fuel. but he can see some kind of rationale for it. It was the next sentence that grabbed his attention, and he has highlighted the text above.

This is being considered at a time of widely acknowledged food crisis. Apart from appearing to be protectionist in nature, using the cloak of the environment to limit competitive import into rich nations from often poorer countries, it will increase the costs of shipping food to poorer countries also.

But wait, as they say in the adverts, there is more:-

Europe is poised to change that. This year the European Commission in Brussels announced that all freight-carrying flights into and out of the European Union would be included in the trading bloc’s emissions-trading program by 2012, meaning permits will have to be purchased for the pollution they generate.

The commission is negotiating with the global shipping organization, the International Maritime Organization, over various alternatives to reduce greenhouse gases. If there is no solution by year’s end, sea freight will also be included in Europe’s emissions-trading program, said Barbara Helferrich, a spokeswoman for the European Commission’s Environment Directorate. “We’re really ready to have everyone reduce — or pay in some way,” she said.

So the EU, which through the Common Agricultural policy is in part responsible for the food crisis, in Adam’s opinion, through the policy in earlier years of dumping product surpluses into the world markets, thus destroying the farming industry in many poor countries, now proposes to enact further protectionist measures to protect itself and constrain others. Whilst at the same time saying it wishes to see resolution of the DOHA Round. Yeah Right!

As the article notes:-

Some foods that travel long distances may actually have an environmental advantage over local products, like flowers grown in the tropics instead of in energy-hungry European greenhouses.

The article makes other key points:-

And with far cheaper labor costs in African nations, Morocco and Egypt have displaced Spain in just a few seasons as important suppliers of tomatoes and salad greens to central Europe.

“If there’s an opportunity for cheaper production in terms of logistics or supply it will be taken,” said Ed Moorehouse, a consultant to the food industry in London, adding that some of these shifts also create valuable jobs in the developing world.

The economics are compelling. For example, Norwegian cod costs a manufacturer $1.36 a pound to process in Europe, but only 23 cents a pound in Asia.

The ability to transport food cheaply has given rise to new and booming businesses.

“In the past few years there have been new plantations all over the center of Italy,” said Antonio Baglioni, export manager of Apofruit, one of Italy’s largest kiwi exporters.

Kiwis from Sanifrutta, another Italian exporter, travel by sea in refrigerated containers: 18 days to the United States, 28 to South Africa and more than a month to reach New Zealand.

Some studies have calculated that as little as 3 percent of emissions from the food sector are caused by transportation. But Mr. Watkiss, the Oxford economist, said the percentage was growing rapidly. Moreover, imported foods generate more emissions than generally acknowledged because they require layers of packaging and, in the case of perishable food, refrigeration.

That last comment is interesting, it would be useful to know if the Lincoln University study took that factor into account, when it concluded it was more energy efficient to buy NZ lamb for example.

Then we have:

Global supermarket chains like Tesco and Carrefour, spreading throughout Eastern Europe and Asia, cater to a market for convenience foods, like washed lettuce and cut vegetables. They also help expand the reach of global brands.

Pringles potato chips, for example, are now sold in more than 180 countries, though they are manufactured in only a handful of places, said Kay Puryear, a spokeswoman for Procter & Gamble, which makes Pringles.

Proponents of taxing transportation fuel say it would end such distortions by changing the economic calculus.

“Food is traveling because transport has become so cheap in a world of globalization,” said Frederic Hague, head of Norway’s environmental group Bellona. “If it was just a matter of processing fish cheaper in China, I’d be happy with it traveling there. The problem is pollution.”

The European Union has led the world in proposals to incorporate environmental costs into the price consumers pay for food.

Given the past record of the EU on trade liberalisation, Adam is left with a very strong feeling that there is a strong element of protectionism hiding behind a green cloak.

Note the comments in the article which follow on:-

In addition to bringing airlines under its emission-trading program, Brussels is also considering a freight charge specifically tied to the environmental toll from food shipping to shift the current calculus that “transporting freight is cheaper than producing goods locally,” the commission said.

If ever there was a non tariff barrier lurking in the green disguise that is one. Where is the effort by our government to combat this attack on our main export industry?

The problem is measuring the emissions. The fact that food travels farther does not necessarily mean more energy is used. Some studies have shown that shipping fresh apples, onions and lamb from New Zealand might produce lower emissions than producing the goods in Europe, where — for example — storing apples for months would require refrigeration.

But those studies were done in New Zealand, and the food travel debate is inevitably intertwined with economic interests.

Note here the twist that the NZ study is skewed. Again where is the effort by our government to combat this?

Last month, Tony Burke, the Australian minister for agriculture, fisheries and forestry, said that carbon footprinting and labeling food miles — the distance food has traveled — was “nothing more than protectionism.”

Shippers have vigorously fought the idea of levying a transportation fuel tax, noting that if some countries repealed those provisions of the Chicago Convention, it would wreak havoc with global trade, creating an uneven patchwork of fuel taxes.

It would also give countries that kept the exemption a huge trade advantage.

The Australians are speaking up. Where the bloody hell is the New Zealand government on this issue?

We seem pre-occupied with trying to seem greener than green, witness the ridiculous award presented to the PM by the UN, for achieving nothing, yet the EU is mounting an insidious attack upon our economy.

This is all taking place at a time of food crisis.

The impact of such moves by the EU would be, amongst other things, to :-

  1. increase food costs
  2. increase bureaucracy
  3. destroy export crops from developing countries, causing hardship for the poor and limiting their ability to import what they require for survival – thus worsening the food crisis
  4. further reduce the ability of the poor to advance their lot
  5. allow under a green cloak, the effective subsidy of inefficient production in rich countries to the detriment of the poor
  6. potentially create surpluses in richer countries which will be dumped on the poor
  7. limit trade liberalisation

For New Zealand

  1. export markets would be affected
  2. ability to service debt would be negatively impacted
  3. inward investment may be lessened
  4. economic downward drift would be accentuated

Adam will be posting more on this and related issues in the future .

For now, he would like to know what our politicians propose to do about the issue.

It seems that presently they are content to stand supinely by.

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3 Comments
  1. Jamesey permalink
    June 20, 2008 10:34 am

    Mr Smith,

    I don’t actually see the problem here if the EU includes agriculture within their carbon reduction schemes and removes subsidies which makes their products artificially cheaper to produce than ours. The only problem is that they haven’t as yet done either of those things, which would provide even more impetus for our government to work with developing countries in the WTO in order to liberalize the agricultural markets in the United States and Europe.

    In order to achieve an average 10% reduction of greenhouse gases from sectors not covered by the ETS, such as transport, buildings, agriculture and waste by 2020, the Commission has set national targets according to countries’ GDP.

    http://renewenergy.wordpress.com/2008/01/24/eu-unveils-plans-to-beef-up-carbon-trading-scheme/

    Even if the carbon schem were implemented here to the extent that the Greens demand its unlikely to work, at least in regards to changing peoples behaviour. You only have to look at the current petrol consumption, which has remained steady, rather than declining as you would have expected, despite the record high petrol prices.

    Every industrial nation is completely hypocritical in regards to carbon emissions. For example Germany has exempted COAL POWER PLANTS from the scheme. Their claim to lead the way in the fight against climate change is as bogus as Helen Clark’s award from the UN.

    “But with Germany wanting to exempt coal (!) and the United Kingdom probably emitting about 92 percent more methane than it declares on top of the price tumble of late April, Kyoto doesn’t seem to be working.”

    http://www.jennifermarohasy.com/blog/archives/001458.html

  2. June 20, 2008 12:42 am

    Thanks for the article, I understand where you are coming from, but could you really blame an agglomerate of souveraign countries – the EU – for tackling emissions and related externalities? Personally I feel there is a good reason to expand this emission trading scheme to many more (at best all) countries. Effects would indeed be including those described by you, but the long term objective is much more valuable I believe.

  3. April 30, 2008 1:46 am

    It’s a complicated issue but with record petroleum prices, there can be no logic behind the explanation that imported food can be cheaper than local produce!

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