Plan for action on agriculture emissions
A new climate change report has offered some rare consensus from climate experts and the agricultural sector on the need to tackle emissions. But behind the smiles, gaps in opinion remain on the path ahead as Marc Daalder reports.
The agricultural sector and New Zealand’s Emissions Trading Scheme (ETS) have long had a will-they won’t-they relationship.
With the release of a new report from the Interim Climate Change Committee (ICCC) - as well as an about-face from the industry - the two have once again veered sharply towards meeting.
Primary sector groups have agreed that farmers should begin paying for their livestock emissions by 2025.
When the ETS was first introduced under the previous Labour government in 2008, the agricultural sector was slated to enter the scheme in 2013. That deadline was pushed back to 2015 and then scrapped entirely under National, a decision hailed at the time by groups like Federated Farmers.
Now, a government discussion document released after consultation with sector leadership and a review of the ICCC report says all stakeholders agree with the introduction of farm-level pricing.
The development new tools and systems to price livestock emissions at the farm level, integrated with the ETS, will take until 2025.
Despite this landmark agreement on the introduction of agriculture to the ETS, farmers and environmental advocates continue to disagree – this time on how that should happen.
“We and the ICCC both agree that a farm-based mechanism is the best way to address biological emissions, however, our views diverge when it comes to how we get there,” DairyNZ chief executive Dr Tim Mackle said.
The ICCC report recommends that agricultural emissions be priced through the ETS at the processor level by 2020, as a transitional step towards the introduction of farm-level pricing in 2025.
The agricultural sector would receive a 95 percent discount on allocations, similar to the discounts received by some industrial companies.
The Government provided an estimate that the average dairy farm, under the proposed 95 percent discount at the current NZ ETS price of $25 per tonne of CO2 or CO2 equivalent, would have to pay an extra $0.01 per kilogram of milk solids.
Meat production trended slightly higher in the Government’s estimate, with farms paying an extra $0.01 per kilo of beef, $0.03 per kilo of sheep meat, and $0.04 per kilo of venison.
Proceeds from the agricultural ETS costs – an estimated $47 million per year – would be dedicated towards helping farmers transition to the farm-level pricing in 2025.
Meanwhile, DairyNZ and other industry leaders have banded together to present an alternate transitional path, based on a formal government sector agreement to establish a “programme of action” to help farmers prepare for the 2025 deadline, funded by $25 million per year from industry groups.
Called He Wake Eke Noa – Our Future In Our Hands, the programme has the support of Federated Farmers, DairyNZ, Beef+Lamb, the Meat Industry Association and other primary sector groups.
It would involve, among other initiatives, educating farmers about climate change and sustainable farming, providing them with equipment and systems needed to estimate emissions, and working with the One Billion Trees programme.
The Government has taken no position on the interim option, instead presenting both proposals to the public for consultation. Public information sessions will be held around the country from July 22 to August 7, with a consultation period running until August 13.
Mackle went on the attack against the ICCC’s interim proposal, saying that bringing agriculture into the ETS at the processor level "amounts to little more than a broad-based tax on farmers before we have the knowledge, support and tools to drive the practice change that will reduce emissions".
“The stakes are high. New Zealand’s primary sector contributes one fifth of our GDP, generates 1 in 10 jobs and produce 75% of our merchandise exports. We want to avoid shocks like the 80s and make any changes in a stable and considered way.”
'Cooperation and consensus'
At a press conference held after the report's release, ICCC members, ministers and sector leaders were all smiles despite the unresolved issues.
Government officials have chosen to emphasise the points of agreement presented in the discussion document, with Agriculture Minister Damien O’Connor hailing the consensus that had been reached on the need to price agricultural emissions.
Climate Change Minister James Shaw described the event as "historic", while stressing that climate change was a problem that every person and every industry had to tackle.
“We’re asking the same of every single other sector. We are all in this together. Farmers get singled out because that is the sector that has the greatest share of emissions in New Zealand’s profile, but all of us live in cities and drive vehicles. Transport is the fastest growing portion of our [emissions] profile.
“This is about all of us – it’s going to take all of us to do this,” Shaw said.
Even climate activists like Mike Smith, the chair of the Climate Change Iwi Leaders Group who during the press conference announced a lawsuit against the Government on behalf of Māori affected by climate change, agreed with Shaw’s universalist message.
“Everybody’s going to have to take a bit of a haircut. We’ve just got to ensure it’s a trim as opposed to a full scalping,” Smith said.
“We’ve got to take collective responsibility, but we’ve also got to take urgent and timely action.”
Since New Zealand signed the Kyoto Protocol in 1997, the agriculture sector has seen emissions pricing coming, and managed to delay and avoid it all the same.
Smith still cast some doubts on the efficacy of the plan, saying that what had been announced could not be described as satisfactory.
Some climate experts agree. Dave Frame, a professor of climate change at Victoria University of Wellington, said the ICCC's approach of putting methane in the ETS with a 95 per cent free allocation for farmers was a poor idea.
"It is unsatisfying environmentally, because it fails to sufficiently penalise new ruminant methane emissions, and it would not sufficiently reward the climate effects of declining ruminant methane emissions,” Frame said.
Ivan Diaz-Rainey, director of the Climate & Energy Finance Group, worried about the political feasibility of the plan.
“I do wonder if the 2025 farm-level levy/rebate scheme will ever get implemented, however – there will be two elections in between which makes it all seem very aspirational,” Diaz-Rainey said.
His scepticism is not unfounded – since New Zealand signed the Kyoto Protocol in 1997, the agriculture sector has seen emissions pricing coming, and managed to delay and avoid it all the same.
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