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How Net-Zero is Driving Up Food Costs

On day one in office President Biden signed executive orders committing our nation to “net-zero” greenhouse gas emissions.  The Biden Securities and Exchange Commission (SEC) is simultaneously advancing the infamous ESG (Environmental, Social, Governance) rule that will punish publicly traded companies deemed to be emissions-intensive.  This blog has already discussed how those rules will raise the price of energy for American consumers (while giving China a free pass): GIVING CHINA A FREE PASS (PART 1) (energy4life.today)

 

But America’s farming industry will also suffer enormous cost increases. Recently, the Buckeye Institute’s Economic Research Center took all of the new carbon emission rules and applied them to a model corn farm.  The report concludes:  “The farm’s operational costs, as expected, all rose significantly.” Buckeye Institute Net-Zero Impact on Food Costs  The report continued: “The economic model then traced how those additional operating costs affected food prices for the American consumer.  Once again, prices rose to compensate farmers for the government’s actions. The results are predictable and unsurprising, but many U.S. policymakers seem unwilling to address or even acknowledge them.”

           

       

But European citizens are forced to acknowledge those higher food costs, because much of Europe has already introduced the net-zero silliness.  The European Union already has an Emissions Trading Scheme (EU ETS) to create a market for carbon emissions credits. Under the ETS, the EU creates and allocates allowances or “credits” to member nations.  In the face of spiking energy costs caused by EU nations’ reliance on unreliable wind and solar, the cost of these credits has landed squarely on the backs of European farmers.  These are the same European farmers you have seen protesting by taking their manure spreaders to European capitals, and doing what manure spreaders do. (Unless you watch the mainstream news…and then you’ve seen manure spreading of a different kind—but not by tractors.)

 

The Buckey report notes that since the beginning of the latest phase of the ETS in January 2021: “…the cost of farm fertilizers and soil improvers increased 49 percent.  As expected, the price of farm products like cereal grains, oils, fruits, and eggs rose 42 percent.  Here is the related chart:

 

                    

The report concludes: “Government climate-control policies ensconced in the Paris Climate Accords, the Inflation Reduction Act, and ESG-guided mandates carry a hefty price tag, especially for U.S. farms and the American consumer. Europe has tested many of these policies aggressively for years, and the results have been an unmitigated failure. Energy prices across Europe have skyrocketed. Chemical companies have been unable to compete globally and have looked for exit strategies to find more profitable environs. Food prices have soared as farms have been battered by higher input, insurance, and lending costs—and tried to pass those higher expenses on to European consumers. Tariffs have targeted European industries that have looked elsewhere to make their products more affordable.”

 

Why, then, in this country would we elect leaders who are willing to advance these same failing policies, and who, at the same time, turn a blind eye to our greatest competitor, China?

 

The warning sign is blinking.  Are we observant enough to recognize it?

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