The Government today announced it has proposed introducing split-gas farm-level emissions pricing from 2025 in a world-first scheme.
But as RNZ noted in its report, the Government is concerned its farm-level scheme may not be ready by 2025, and proposes a processor-level levy as a backstop alternative to the Emissions Trading Scheme.
It also proposes sequestration will be accounted for through the Emissions Trading Scheme and is seeking feedback on whether to charge farmers and manufacturers for synthetic nitrogen fertiliser.
Key points emphasised in the Government’s announcement are:
- Modelling shows the Government’s proposal should meet Zero Carbon Act 2030 methane reduction target;
- Government largely adopts the farming sector’s proposal to price emissions at the farm level, giving farmers control over their own farming systems with the ability to reduce costs;
- Revenue would be recycled back into agriculture sector through new technology, research and incentive payments to farmers;
- Consultation will work through sequestration, levy setting process, and transition assistance. Consultation open from now until 18 November 2022.
The Government press statement is headed Pragmatic proposal to reduce agricultural emissions and enhance exports and economy
The disappointed reaction from Federated Farmers was expressed in a press statement headed Government’s Farm Emissions Plan – Say Goodbye Small Town New Zealand.
Greenpeace expressed its disappointment in a press statement headed He Waka Eke Noa Fails To Cut Dairy Emissions.
In other words, farm leaders say the proposal goes too far; the environmental lobby says its does not go far enough.
This does not mean the Government has hit the Goldilocks sweet spot and got it just right.
The press statement from the Beehive was released in the names of Prime Minster Jacinda Ardern and two other ministers – Climate Change Minister James Shaw and Agriculture Minister Damien O’Connor.
They announced the proposal at a dairy farm in Featherston this morning.
It is the Government’s response to the plan put forward in May by the He Waka Eke Noa partnership – farmers, industry bodies and Māori with the support of the Primary Industries and Environment Ministries – to price greenhouse gas emissions at farm level.
The Government says it has released for consultation a pragmatic proposal to reduce agricultural emissions, setting up our biggest export earner for future success and putting New Zealand on track to meet our 2030 methane reduction target.
The Government has included many of the recommendations of the He Waka Eke Noa Partnership of agriculture sector groups for farm-level emissions pricing, and proposed modifications in the consultation document based on advice from the Climate Change Commission.
The Prime Minister said:
“This is an important step forward in New Zealand’s transition to a low emissions future and delivers on our promise to price agriculture emissions from 2025
“The proposal aims to give New Zealand farmers control over their farming system, providing the ability to reduce costs through revenue raised from the system being recycled back to farmers, which will fund further research, tools and technology and incentives to reduce emissions.”
Cutting emissions would help New Zealand farmers not only to be the best in the world but also the best for the world, gaining a price premium for climate-friendly agricultural products while helping to boost export earnings, Ms Ardern said.
The consultation provided an opportunity for people to provide feedback on the issues of sequestration, the levy-setting process and transition support, she said.
Agriculture Minister Damien O’Connor said the proposed farm-level emissions pricing system supported farmers to make decisions about what they do on their farms by incentivising emissions reductions and climate friendly practices.
“By rewarding farmers who take action to cut their emissions we can support more farmers to improve their productivity and profitability while achieving climate goals,” Damien O’Connor said.
“The Government is already supporting farmers by investing in the development of high-impact technologies and practices, including the establishment of the new Centre for Climate Action on Agricultural Emissions to shift the dial on climate friendly farm practices.
“Farmers are already experiencing the impact of climate change with more regular drought and flooding. Taking the lead on agricultural emissions is both good for the environment and our economy.”
Climate Change Minister James Shaw stressed the importance of working with farmers to reduce emissions, rather than relying on forestry offsets.
By 2025 New Zealand would introduce a system that required farmers to pay a price for their emissions and reward them for taking action to reduce their climate pollution.
Mr Shaw contended the levy improved on the proposal put forward by the He Waka Eke Noa partnership and brought New Zealand’s gross methane reduction targets within reach.
“It is better than the ‘backstop’ of bringing agriculture into the Emissions Trading Scheme, which could see agribusiness simply offsetting farm emissions without making any actual changes to reduce emissions on farms.”
Cabinet considered a range of options alongside the levy, including a system based on managing the total volume of pollution, rather than managing the price.
This was not Cabinet’s preferred option for 2025, but it is seeking feedback on its merits.
“There are a few other outstanding issues which we are keen to hear views about, such as how nitrous oxide emissions from fertiliser should be treated,” said James Shaw.
Federated Farmers said the plan aimed to reduce sheep and beef farming in New Zealand by 20% and dairy farming by 5% to achieve “the unscientific pulled-out-of-a-hat national GHG targets”.
That is the equivalent of the entire wine industry and half of seafood being wiped out and it
“… will rip the guts out of small town New Zealand, putting trees where farms used to be.”
Moreover, the Government’s rehashed plan to reduce on-farm greenhouse gas emissions threw out the two and a half years of work by the industry to come up with a solution, supposedly all that time in a ‘partnership’ with Government to achieve a workable solution which would not reduce food production.
“This is not what we’ve got this morning. What happened to the ‘historic partnership’?”
Federated Farmers National president and climate change spokesperson Andrew Hoggard says small towns, like Wairoa, Pahiatua, Taumaranui – much of the East Coast and central North Island and a good chunk of the top of the South – would soon be surrounded by pine trees.
Greenpeace Aotearoa lead climate campaigner Christine Rose said dealing with farm emissions is one of the most important decisions the Government will make around the climate crisis, “but He Waka Eke Noa fails to do its one job.”
Ms Rose says the Government’s proposals would favour the agriculture sector’s worst climate polluter – intensive dairy – and disadvantage less polluting, extensive beef and sheep, and Māori-owned farms.
“Greenpeace suggests phasing out the drivers of intensive dairy directly. We need a sinking lid on synthetic nitrogen fertiliser and imported feed.”
The agri-industry’s proposal to have farming organisations nominate their own representatives to a powerful price-setting board did not make the cut with Cabinet. Instead, Government Ministers will set the price for methane, after getting advice from the Climate Change Commission and also consulting farmers.
Cabinet’s decision to disallow the industry to price its own emissions is a step in the right direction, Ms Rose said,
But she insists the industry has failed to secure a system that will properly regulate, price or cut methane emissions.
Sources: NZ Government; RNZ; Federated Farmers; Greenpeace