Carblecast
Climate policy for the coffee and cocoa industry
Carble
November 24, 2023
Measure, model, and mitigate carbon emissions and deforestation with Carble.
In Episode #6 of the Carblecast, Sander Reuderink, CEO at Carble, tells how climate policy has developed over decades and what the coffee and cocoa industries can expect on policy moving forward. Listen and watch episode #6 or read the blog below the video.
“Here is what Dr. Meadows computer shows. Since the year 1900, the Earth's resources, there at the top of the chart, have been steadily used up as population, food consumption and production of goods have soared. Ahead of us some time after the year 2000. This computer study foresees calamity. Resources drop more steeply and food and production follow suit. Population continues to expand for perhaps one more generation, then collapses calamitously as deprivation takes hold.”
This is a quote from the presentation of the 1972 study ‘The limits to growth’, which was commissioned by the Club of Rome, and was hugely influential in starting the climate movement. With all major cocoa companies and the majority of large coffee companies working on reducing their impact on the climate, clearly, it is good for people in the industry to know how the climate movement has developed since, and what we can expect in terms of policy going forward.
In 1992 the first climate policy framework was signed at the UN level, the United Nations Framework Convention on Climate Change. All the states that have signed the convention form the Conference of the Parties, or COP, and meet annually to make decisions on policies to stabilize atmospheric greenhouse gas concentrations.
One of the most well-known of these Conferences of the Parties was COP3 in Japan, during which the Kyoto Protocol was adopted. The Kyoto Protocol was the first implementation of measures under the UNFCCC. The Kyoto Protocol was legally binding and set targets to decrease GHG emissions for developed countries by 5% from 1990 levels - a step in the right direction, but clearly not enough to prevent the worst effects of climate change.
Recognizing that much more needed to be done, at COP21 in France in 2015 the Paris Agreement was signed. In the Paris Agreement, 196 countries committed to stopping global warming well below 2C above pre-industrial levels, and pursuing efforts to limit it to 1.5 degrees.
These targets can also be used to calculate the remaining amounts of carbon that can be emitted to remain within the scenarios. According to the most recent forecasts, we have 250 gigatonnes of CO2 emissions left while remaining within the 1.5C scenario, which is forecasted to run out in 2029.
So, the current policies are not enough to meet the goals of the Paris Agreement. The difficulty is of course, that although governments are legally bound to the Paris Agreement, not all sectors within their jurisdiction have been covered by legal requirements to reduce emissions.
So although sectors like Energy and Industry need to purchase emission rights from the ever-decreasing pool of the EU Emissions Trading System, sectors like agriculture are not yet covered. But this is changing for us in the coffee and cocoa sectors, and a long list of climate policies is coming our way, especially here in the EU.
The most well-known one is of course the EU Deforestation Regulation, which requires anyone importing wood, palm oil, soy, cocoa, coffee, rubber, or cattle products to establish a due diligence system that shows no deforestation took place in their supply chain after Dec 31 2020 and b) provide due diligence statements with each imported shipment. What few people know is that a similar bill is being proposed in the US, called the FOREST Act.
Maybe even more important is the EU Corporate Sustainability Reporting Directives It requires all companies of a certain size to report their GHG emissions and align with the Paris Agreement’s 1.5C targets. Most interesting, it also covers companies' supply chains (Scope-3 emissions), making sure that this policy will have a global impact.
Similar policies are being proposed and adopted around the globe including major economies like the US, UK, and Japan, and the urgency of the climate crisis makes it likely that the requirements on companies in the coffee and cocoa industry will only increase and demand an even stronger focus on reducing emissions. Since the vast majority of emissions in our industry originate at the farm level, my recommendation would be to start collecting data and measure, model, and mitigate emissions as soon as possible!
