Can’t see the food for the trees
Govt’s bid to trim emissions will hit Kiwi farmers — but won’t reduce climate change
With this week’s announcement on reducing agricultural emissions, you have to wonder whether this Government has a political and economic death wish.
Let’s start with the politics. Their earlier decision to place a gun to agriculture’s head and get the sector to either write its own emissions control plan or join the Emissions Trading Scheme was brutal but effective. After a lot of soul-searching, sector representatives signed up to a robust plan that many of its members won’t have liked. Sure, it wasn’t perfect from the Green Party’s perspective, but then they won’t be happy until we are all living in hippy communes on the Coromandel so that really wasn’t the test.
The point was, the sector had signed up to something it could grudgingly cope with. A smart Government would have accepted it, declared victory and moved on. Not this one. No doubt under internal pressure from the likes of David Parker and the Greens, they meddled with the plan — and made it tougher.
Under their plan, farmers will get less credit for planting trees, bush and riparian strips which sequester carbon, and more dictation on what the all-important carbon price will be.
The result is something which once again manages Labour’s internal political needs and contradictions but does nothing for the country as a whole. They have created a political dog’s breakfast, and their own modelling suggests sheep and beef farmers will be selling up to the pine tree farmers, decimating smaller regional communities. Add this to Three Waters, co-governance and the grand centralisation, and you have an even bigger recipe for regional revolt at the next election.
The economics is even poorer. Having proven to ourselves that when you close your borders, service exports collapse and we end up even more dependent on agriculture to pay our way in the world, we’ve decided to pick this moment to voluntarily hobble our food producers with greater costs that will reduce our competitiveness with every other food producing country. All this at a time when rampant inflation is driving up farm input prices and food prices worldwide. Genius.
But that’s okay. Our fearless leader will be able to proclaim we are “world-leading” on the world stage and what is that worth to us? The clue is in the fact that nobody else is doing it.
It’s hard to credit just how cavalier this Government continues to be with our exporters. As well as an ongoing devil may care approach to the competitiveness of our food producers, there is the complete ambivalence to resurrecting our international education sector (previously worth $5 billion a year), and the spectre of a Tourism Minister who hates most tourism.
The most draw-dropping revelation for me this week wasn’t actually the emissions plan but Stuart Nash blithely proposing a massive increase in the international visitor levy from $35 to $200 at a time when the sector is on a massive mission to rebuild visitor numbers. What planet is he on?
Thankfully, Cabinet has slapped him down on this for the moment, but they did invite him to propose it again next year, so the idea hasn’t gone away. Cue more head shaking.
All this is happening while our trade deficit is blowing out and our dollar is depreciating rapidly. Part of that story is the strength of the US dollar, but part of it is our deteriorating relative economic performance. That will flow through to more local inflation and even higher interest rates. The simple lesson is that you can’t keep smacking around your own export sectors and hope to become a wealthier country.
Which brings us back to carbon emissions. I believe most Kiwis want to do their bit for climate change, partly out of self-interest (concern about more violent weather systems and the like) and partly because we like to be good global citizens. Yes, there are extremes at both ends, the full-on climate deniers on the one hand, and on the other the hairshirted greens who use climate change as another tool to advance their radical socialism.
Where the argument is lost with middle New Zealand is when actions taken here result in exporting emissions to another part of the world and not reducing them, or worse still, increasing them. And that is the issue with our agricultural emissions. New Zealand is acknowledged as one of the most, if not the most carbon-efficient food producers on the planet. Producing a kilo of meat or dairy protein here has less impact than producing it almost anywhere else.
So if we produce less here, and the world eats just as much as before, more food is going to be produced in a less carbon-efficient food system elsewhere, meaning emissions overall will increase. The same levelheaded Kiwis who want to do their bit to reduce climate change, including most farmers, think that makes no sense. And they’d be right. It’s just national scale virtue-signalling — of the most self-destructive kind.
It is a mistake that the world climate debate has been measured and conducted on national lines rather than industry lines. As long as countries and not industries are measured on their emissions reductions, we will have these nonsensical tradeoffs which make climate change worse.
The world needs to grapple with this issue if it is to achieve more meaningful emissions reductions. Carbon-efficient producers of goods and services can’t be penalised because of which country they are in, or there will be no incentive to actually reduce emissions. They can just shift production to a less conscientious country with less stringent targets.
it is not just an issue for agriculture. Our remaining big nonfood industrial processors are in the same boat. James Shaw proudly removed the additional ETS credits we were providing our trade-exposed industrial emitters so they could compete on a level playing field. He called them a loophole.
Partially as a result of that, the oil refinery at Marsden Point has closed, and the future of other big plants is more shaky. In all cases, closure won’t reduce emissions, it will just shift them offshore. Our politicians might feel better, but the workers at those plants and the communities they exist in, not so much. And world emissions stay the same or increase.
Atmospheric carbon is a worldwide problem. It doesn’t respect national boundaries. We need to reduce the emission-intensity of our food producers across the planet, not hobble the most carbon-efficient food producers in the world so the Government of a small country can feel good about itself. This is a debate that has to be had, and one where our Prime Minister could be productively world-leading.
We’ve decided to pick this moment to voluntarily hobble our food producers with greater costs that will reduce our competitiveness with every other food producing country.