Farmers on the clock

Govt sets agriculture emissions deadline

The Government will announce plans today to make New Zealand the first nation in the world to fully fold agriculture into an emissions pricing scheme, with a comprehensive price on greenhouse gases introduced by 2025.

Stuff understands the Government will do this by accepting an agricultural sector proposal to give it those five years to develop a farm-level pricing mechanism separate from New Zealand’s Emissions Trading Scheme (ETS), which the sector opposes. Farmers will pay no additional levies or charges in the meantime.

If this new scheme is not established, agriculture will be folded into the ETS by default in 2025 – a ‘‘backstop’’ measure neither the Government nor the sector wants to use. It could even be brought in as early as 2022 if the Government felt agriculture was not moving fast enough.

While the Government stands ready for criticism from green groups and more vociferous climate activists that it is moving too slowly, Stuff understands Prime Minister Jacinda Ardern’s objective is to make the key components of emissions policy bipartisan – in the same way trade policy is. This is to give certainty to the farmers, investors in the sector and the economy overall.

A senior Government source said

Ardern was not wedded to the ETS as the mechanism to lower emissions. ‘‘The overall objective is to drive down emissions,’’ the source said.

One industry source close to the decision told Stuff political consensus was crucial. ‘‘We can’t keep jumping from one end to the other on this stuff. This is beyond politics now. This is really the consumer talking,’’ they said.

‘‘I would like to think that if you’ve got the sector and the Coalition Government working together on this, the Opposition might be aligned as well.

‘‘That would certainly be our hope because we would like this to be across governments if we could. The political reality may be somewhat different.’’

Agriculture accounts for about half of all New Zealand’s carbon emissions. One reason given to Stuff for the timeline – five years until agriculture enters into the pricing mechanism – is to allow the sector to adjust and develop with the

If this new scheme is not established, agriculture will be folded into the ETS by default in 2025.

Government a comprehensive measuring and accounting regime.

The Government’s plan rejects an earlier recommendation from the Interim Climate Change Committee to start pricing agriculture from as soon as next year.

Sector sources say the plan gives farmers a direct and healthy incentive to work out their own farm-level pricing system for emissions and not incur the backstop.

The ETS backstop is still unpopular with farmers, with the sector source close to negotiations saying the Government and sector had ‘‘agreed to disagree’’ on it.

The source also said the sector was determined to reduce emissions quickly enough to make the backstop irrelevant.

The Government source said the sector would naturally oppose the backstop, but both sides were confident it would not be needed. The sector has already committed to measuring all emissions at a farm-level by 2022.

Thanks to the coalition agreement with NZ First, emission pricing will still be discounted by 95 per cent initially.

The move comes after months of negotiations within the three governing parties and the sector, and more than a decade of political rancour on the issue.

It lays down a serious gauntlet for National, which has longopposed agriculture’s entry into any emissions-pricing scheme but has signalled a willingness to work with the Government on climate change.

Stuff understands all major sector groups, including Federated Farmers, have agreed to the Government’s plan in spite of disquiet over the backstop, which will be passed as an amendment to the main emissions trading law.