Farming faces emissions pressure

Immediate phase-in among big moves advised for scheme

The Productivity Commission has called for bige mitting agriculture to be pulled into the emissions trading scheme (ETS), among other suggested bold steps towards a lowemission economy.

The ETS remains New Zealand’s main lever for offsetting emissions and works by allowing polluters to buy carbon credits from companies which capture emissions, such as the forestry industry.

The Government was reviewing whether to incorporate agriculture, which now accounted for half of the country’s gross greenhouse emissions, largely in the form of methane and nitrous oxide.

The sector itself has long resisted the move and Federated Farmers strongly opposed any livestock emis- sions being included until mitigation options became cheaper and overseas competitors faced similar costs.

The lobby group argued ongoing improvements would reduce agricultural emissions in the meantime.

But the commission’s draft report, released today, recommended an ETS phase-in should happen, amid changes to make a “broad-based and effective” pricing scheme.

It was among several other big recommendations: others included mandatory financial disclosures about climate risk and a cross-party commitment to transition to a lowemissions economy.

Climate change policies already in place had not been effective in slashing our domestic emissions, which the latest figures showed had climbed by 20 per cent from 1990 levels.

“Our report shows that major changes will be needed,” commission chairman Murray Sherwin said.

“Our inquiry shows that, if credible and stable climate policy can be established now, businesses, households and consumers will be better able to plan for change and manage the risks of moving to a lowemissions economy.”

The commission also called for more resources for New Zealand to make the shift; regulation and policies such as a “feebate” scheme for imported vehicles; and a new institutional framework to support them.

The strategy it outlined generally involved replacing fossil fuels with clean electricity, and a major change to land use favouring large-scale new forestry plantation and significant growth in horticulture. In the longer term, new technologies that emerged in response to higher emissions costs would offer more options, the commission found.

Sherwin said the challenges of achieving a low-emissions economy were large but the transition was on a scale which New Zealand had achieved before.

“New Zealand can reach its low emissions targets if . . . the journey is embarked upon without delay.”

Climate Change Minister James Shaw said some of the recommendations were already part of the Government’s work programme.

Those included its proposed Zero Carbon Act, which aimed to reach a net zero emissions goal by 2050; setting up a new Climate Change Commission, and looking at options for disclosure of climate-related financial risks.

“As the Productivity Commission points out, this transition to a lowemissions economy will require major changes but New Zealand can achieve [them] and reap the rewards.”

Massey University sustainable energy lecturer Professor Ralph Sims said the challenge for the Govern- ment would be remaining bold on the issue at a time many industries and businesses had yet to grasp what a low-emissions future meant.

“The [furore] over the Government’s statement that no more permits for offshore oil and gas exploration will be issued is but one example,” Sims said. “Yet we have no choice but to transition away from all fossil fuels starting from now.

“[We will] be working alongside the vast majority of countries in aiming to reach near net zero emissions in around just 30 years time in order to keep the climate of our planet from becoming untenable.”

Professor Shaun Hendy, an innovation commentator and director of University of Auckland-based Te Punaha Matatini, said New Zealand would need to be fast adopters of green technologies if our highemissions economy was to remain competitive — and it otherwise risked missing out.

The draft report was open for feedback until June 8, when the Government was due to consult on its own zero-carbon legislation.