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Troxler: “Green banking” will drive up grocery prices, put food supply at risk


Carolina Journal

On January 29th, Steve Troxler, North Carolina’s Agriculture Commissioner, joined eleven other Republican Agriculture commissioners who signed a letter to six of America’s top banks, voicing their concerns with the Net-Zero Banking Alliance (NZBA), a project of the Paris Climate Accords

NZBA banks would have to require that their customers measure and disclose greenhouse gas (GHG) emissions in certain sectors, agriculture being one of those sectors. Critics worry it could ultimately drive up costs of food, fuel, and fertilizer, and put the food supply at risk.

“Agriculture in North Carolina already contributes 34% of offsets to carbon emissions according to newly released numbers by the NC Department of Environmental Quality,” Commissioner Troxler told the Carolina Journal in an email. “We are proud of that but we also don’t want to be judged on production practices that could impact the bottom line.”

The implementation of these commitments would cause extreme consequences for farmers, including cutting beef and livestock consumption by half, using electric farm equipment, which is inefficient, and moving away from nitrogen fertilizer. According to a report from the Buckeye Institute, the American farmer will see costs rise by a minimum of 34%. Grocery bills for a family of four will increase by $1,300 per year.

The commissioners express significant concerns that the banks have given the UN Environment Programme (UNEP) the authority to monitor the bank’s climate targets to ensure alignment with the UN criteria. This is especially concerning due to the UNEP’s primary leadership in persuading Sri Lanka to adopt its fertilizer ban. The documents signed by these banks indicate that they intend to establish emissions targets by the end of the year, if not sooner, according to the report. 

“Achieving net-zero greenhouse gas emissions in agriculture requires a complete overhaul of on-farm infrastructure—one of the goals of the NZBA. This would have a catastrophic impact on our farmers,” according to the letter.  Changes to align with net-zero road maps include switching to electronic machinery, installing on-site solar panels and wind turbines, switching to organic fertilizer, altering rice-field irrigation systems, and other changes. These changes will increase food costs while decreasing production at the worst possible time as demand is expected to rise dramatically. 

The Buckeye Institute developed a model corn farm that must abide by the new carbon emission rules. Operational costs rose significantly, as did prices for nitrogen fertilizer, propane, and diesel fuel. The model then tracked how those prices drove food prices higher for the average American consumer.

“The results are predictable and unsurprising, but many US policymakers seem unwilling to address or even acknowledge them. That has to change, or the United States will face dire, economic consequences instead,” according to the report.  

Climate initiatives such as the NZBA and ESG reports directly result from President Biden rejoining the Paris Climate Accords. The agreement aims to reduce GHG emissions to zero or as close to zero as possible. In line with that goal, the Biden administration agreed to reduce emissions by 50-52% by 2030 or by an economy-wide net-zero GHG emissions by 2050, according to the report.

“Contrary to assurance from the US Security and Exchange Commission (SEC), American Agriculture which accounts for 10% of America’s CO2 emissions will not be spared,” according to the report.

“Without taking remedial steps to fix the problems being perpetrated by international agreements and federal climate control rules, the American economy, businesses, farms, and consumers will pay the price, and that price must be understood,” according to the report from the Buckeye Institute.

“Food prices are still rising, but more slowly,” said Jeffrey Dorfman, professor of Agriculture and Resource Economics at NC State. “The CPI for food was up 2.6% from Jan 2023 to Jan 2024. This was mostly driven by food away from home, which saw prices rise by 5.1% in the last twelve months. Food at home (groceries) only went up by 1.2% in the past year. Based on those stats and reports from major food companies in the last few weeks, I expect that grocery prices will only rise slightly this year. Restaurant prices are still being pulled upwards by the higher wages restaurant operators are having to pay to get enough workers.”

“In America, decade-high oil and natural gas prices led to surging inflation, and U.S. gas prices hit an all-time high crossing $5.00 per gallon in June 2023,” according to a recent report by the Buckeye Institute.

“Gas prices are sort of wobbling up and down, more related to world political tensions than inflation in general or the state of the economy,” said Dr. Dorfman. “I never try to predict gas prices as nobody has any idea what they are going to do.”

During the North Carolina Agriculture Forum earlier this month, Dr. Dorfman presented the economic outlook in agriculture for 2024. He had stated that fertilizer would be one of the few things that would see prices come down as inflation came down, but for most other things, prices won’t be coming down.

“I do expect to see fertilizer prices come down some in 2024 as natural gas prices have really been low recently,” said Dr. Dorfman in a recent email to the Carolina Journal. “There are some indications natural gas suppliers are trying to restrict production to raise prices, but I am not sure they can pull that off successfully. It’s possible fertilizer prices will up some, but they will still be much better than their 2022 levels when they were extremely expensive.”

The agriculture commissioners are not the first state officials to join and take action against climate initiatives. Last year, 21 attorney generals, led by Utah’s Attorney General Sean D. Reyes, challenged the Environmental, Social Governance (ESG) practices of international Shareholder Services, Inc. (ISS) and Glass, Lewis Co.

“Both ISS and Glass Lewis support the priorities established by an international group of financial institutions committed to aligning their lending and investment portfolios with net-zero emissions by 2050,” stated a letter from AG Reyes’s office.

Bank of America, one of the six banks that received the letter signed by 12 Republican Ag Commissioners, did not respond to the Carolina Journal’s request for comment.

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