Leverages for Advancing Carbon Accounting in the United States Food System: An analysis of the political and economic leverages through which carbon accounting can serve as an effective tool for reducing net greenhouse gas emissions of the United States’ food system

Abstract

The present-day global food system is responsible for 25 to 30% of total greenhouse gas emissions (Boehm et al. 2018; Ritchie, 2019). Food systems are defined as the interconnected processes, systems, and players that deliver and influence food production, preparation, and disposal. Food systems can represent a variety of scales: local, regional, national, international, and global. All scales include actors across the following sectors; producers, processors, distributors, consumers, retailers, and wholesalers (Von Braun, Afsana, Fresco, Hassan, & Torero, 2021). Life Cycle Analysis (LCA) is the study of a product’s life within the linear production model and is a tool for “identifying or comparing the environmental impacts of a product” by assessing their interactions “with the natural environment” (Golisano Institute for Sustainability, 2020, para. 13). The data collected through this process can then be utilized to inform carbon accounting strategies. Carbon accounting, in relation to the food system, is a strategy of budgeting a specified quantity of emissions for a particular product, within a designated time, then only consuming products whose cumulative footprint falls below this quantity ("Carbon Accounting 101," n.d.). Carbon accounting can therefore be utilized as a tool by all sectors of the food system for emissions reduction strategies. GreenSwapp is a Netherlands-based, for-profit business that is developing an algorithm to quantify carbon equivalent emissions of food products. To achieve this, GreenSwapp connects their database containing thousands of LCAs to their clients’ product portfolio, producing carbon footprint estimations for each product, through which the company can employ carbon accounting strategies. The University of Michigan GreenSwapp team was tasked with assessing the feasibility of a federal carbon accounting mandate for food distributors and identifying alternative leverages for intervention within the United States’ food system. To comprehensively understand the feasibility of this mandate, researchers needed to conduct an in-depth analysis of the state of carbon accounting in the US food system, as well as the policy landscape this mandate would be implemented within. This study asks, given that the global food system contributes 25-30% of net carbon emissions, what is a strategy to influence the system components and primary actors to significantly reduce carbon emissions in the US

food system? To approach this question the team, 1) identified the primary sectors of the US food system, 2) conducted a literature review of the current state of carbon accounting including US policy climate in relation to carbon accounting, historical action taken, and influential actors, 3) interviewed three or more stakeholders in all identified food system sectors, and 4) performed a qualitative analysis on interview data. In this report, we share the current state of carbon accounting in each sector of the food supply chain. In summary, the sustainability initiatives adopted, and internal mechanics of producers depend on the scale of the producer, which comes with distinct challenges. For example, a smaller producer (farm) typically has fewer opportunities, technology, and resources for implementing precision agriculture, regenerative, and/or organic agriculture compared to a larger producer. Alternatively, many processors already calculate their emissions, this is especially true for the vertically integrated companies. It is up to processors to decide what to do with these calculations. While some already have goals set, they require a strong business case for such changes. Processors have influence on their purchasing, packaging, energy, and selling decisions. Sustainability measures within the wholesale sector are primarily implemented through energy reduction and intentional sourcing. However, this only takes place when the company recognizes 1) its profitability and 2) has accurate information about partner emissions. Retailers see their goal as providing what their customers want. Incorporating carbon accounting is difficult at the retail level because it is so far removed from production. This is especially for medium and small-scale retailers and therefore makes them reliant on other sectors for providing data. Large scale retailers are likely to have some amount of vertical integration with other steps in the supply chain. This has the effect of reducing data barriers for assessing their products. Finally, consumers directly interact with carbon accounting only when emissions information is conveyed through labeling. However, because consumers prioritize price and taste, these qualities must overlap with sustainability to have a significant influence. The policy climate within which a carbon accounting mandate would be implemented including historic and existing policies as well as influential actors, was analyzed at the international, national, state and municipal levels. At the municipal level there is no legal power to require carbon accounting or labeling. However, there is a significant opportunity for local governments to model sustainability as a priority with procurement policies and to encourage businesses and community members to value sustainable choices with voluntary programs and certifications. At the state level, there are 25 states and the District of Columbia that have carbon reduction goals. They are leading the way because there is no established federal goal. Half of the top ten food producing and processing states are in the US Climate Alliance, suggesting that if those five states make headway in reducing emissions, then overall food emissions can also decrease. State laws also have the potential to influence companies nationally, such as California’s Proposition 65 that mandates companies label products with cancer-causing ingredients. Finally, at the federal level, more than 20 different regulatory agencies control the actions and processes of the US food system. Historically, the federal government has largely failed to adopt emissions regulatory standards; in 2022, the Supreme Court ruled that the EPA 4 could not mandate state emissions caps. However, the recent passing of large climate solutions bills such as the IRA and the Bipartisan Infrastructure Law, are expected to reduce emissions by 40% compared to the 2005 levels by 2030 (US Department of Energy, 2022). One of the programs funded by these laws is the Greenhouse Gas Inventory Assessment Program which will establish carbon accounting standards for food producers. The influence of lobbies, trade organizations, and advocacy organizations with food-based missions, were also determined to have significant influence over the success of the proposed policy, primarily through financing. A network visualization displaying interview data specifically in relation to questions of sectoral relationships, influence, and power found processors to be the largest leverage for system change. While countless factors could influence the feasibility of a carbon accounting mandate, five key barriers have been highlighted in this report: barriers for the collection and reliability of associated data (data barriers), lacking regulatory structure and financial resources for policy adoption (resources and regulation), the potential for corporations to misrepresent sustainabilityrelated data for financial gain (greenwashing), prominent political barriers for legislative success (political contention), and the risks of investing time and resources into this policy in relation to others with greater potential for emissions reduction (opportunity cost). Lastly, this research identified five alternative leverages through which carbon accounting could be utilized as a tool to reduce net US food emissions. These leverages include enhanced investments in the collection and regulation of carbon accounting data, utilizing LCAs for targeted reductions, implementing a state-level carbon accounting mandate, implementing a federal carbon labeling mandate, and utilizing existing programs such as SNAP and the Healthy Eating Index to increase the procurement, affordability, and salience of sustainable food. The results of this project include a network visualization of the relationships between sectors, an analysis of the policy climate in relation to carbon accounting, and an informed list of alternative leverages for expanding the use and impact of carbon accounting, all in the context of the US food system. Utilizing this information, GreenSwapp, and other organizations promoting the expansion of carbon accounting throughout the US food system, can identify organizational action that optimizes their use of time and resources, while simultaneously maximizing their impact.