‘Complete failure’ on farm emissions
Environmental groups are in uproar over a draft plan to price and reduce agricultural emissions as hammered out by the sector and Government.
None of the pricing options identified in the document would reduce emissions by more than 1 per cent on 2017 levels, meaning the Government would likely fail its own goal to reduce methane emissions by 10 per cent in 2030.
Instead, the plan relies on incentives and research being paid for by the fees from the possible levies to spur farmers to become more efficient.
Other Government policies such as the national policy statement on freshwater were projected to have more impact.
In 2019, Labour and the Greens reneged on an election promise to price agricultural emissions, allowing New Zealand’s highest-emitting sector to continue to pollute freely, while other industries pay through the Emissions Trading Scheme (ETS).
Farmers have long argued that they have no good option to reduce emissions and remain competitive in the world market, unlike other sectors.
Instead, the Government launched a partnership policy programme between the agriculture sector, Ma¯ ori, and the Government called He Waka Eke Noa, aimed at designing a policy to price emissions by 2025, preferably at the farmlevel.
As a backstop it passed a law introducing agricultural emissions into the ETS by 2025, in case no scheme was designed in time, and said that could happen as early as 2023 if sufficient work was not completed.
The first major policy document from that partnership was made public yesterday.
The draft plan looks at the ‘‘backstop’’ option of agriculture entering the ETS as well as options for a farm-level levy and a hybrid levy calculated by the processor that allowed some farms to get payments for reducing emissions themselves.
Each scheme has benefits and costs – farm-level levies are expected to be far more costly and complex to manage than processor levies, but would reward things individual farms
did to reduce emissions.
The prices are either based on expected ETS prices, with a 95 per cent discount that the Government has indicated would apply for agriculture in
2025, or a ‘‘unique levy rate’’ set by the minister.
The modelling suggests the farmlevel levy would cost farms anywhere from 1.4 per cent to 6 per cent of their operating profit, with South Island hill country farming hit the hardest. A Canterbury dairy farm would lose up to
$13,000, or 1.3 per cent of operating profit.
But these costs would not result in significant emissions reductions.
‘‘Initial modelling suggests these prices would lead to reductions in total agricultural emissions of less than 1 per cent reduction in both CH4 [methane] and N2O [nitrous oxide] below 2017 levels, additional to reductions as a result of other environmental policies,’’ the document reads.
It cautions, however, that the $137 million in revenue raised would help deliver research and development which does the heavy lifting of emissions reduction.
The hybrid levy would raise a similar amount and also not directly reduce emissions by more than 1 per cent, with research and development again expected to do the heavy lifting on emissions reductions.
The backstop of putting agriculture into ETS is also expected to reduce emissions by less than 1 per cent, although this could result in higher costs for some farmers, with a 14.7 per cent reduction in operating profit for North Island intensive farms by 2030.
Greenpeace Aotearoa campaigner Christine Rose said the Government should ditch the scheme altogether.
‘‘The Government must get real and put rules in place that will actually reduce emissions. Jacinda Ardern and James Shaw need to show some mettle, stand up to the dairy industry and include 100 per cent of agricultural emissions immediately,’’ Rose said.
‘‘Relying on endless consultations to find answers we already know, and voluntary agreements that are designed to fail is like shuffling the deckchairs as the lifeboat burns.’’
Forest & Bird climate advocate Geoff Keey said the partnership should be binned.
‘‘He Waka Eke Noa had one job, to come up with an emissions reduction plan for agriculture that would cut emissions. They have completely failed. This plan is bad for the climate, bad for the future of farming, and taxpayers are going to have to pick up the tab,’’ Keey said.
‘‘The agriculture industry has had over 30 years to deal with its climate problem. Once again they’ve failed, and now the Government needs to get on with the job agri-business won’t do, and put them in an improved ETS.’’
DairyNZ chair Jim van der Poel said it was key that farmers were heard.
‘‘The NZ ETS pricing would be out of farmers’ control, and they would face a broad-based tax,’’ he said.
‘‘Also, farmers wouldn’t get recognition for on-farm work to reduce emissions. We’re working to get a better deal for farmers while still meeting environmental goals.’’
Climate Change Minister James Shaw has been asked for comment.