Climate change: official plan to price and reduce agricultural emissions would lead to a reduction of less than 1%

Environmental groups are in turmoil over a proposed agricultural pricing and emissions reduction plan as developed by industry and government.

None of the pricing options identified in the document would reduce emissions by more than 1% from 2017 levels, meaning the government would likely fail its own target of reducing methane emissions by 10% by 2030.

Instead, the plan relies on incentives and research funded by fees from possible levies to incentivize farmers to become more efficient.

Other government policies such as the National Freshwater Policy Statement are expected to have a greater impact.

None of the options presented would reduce emissions by more than 1%.

Dominico Zapata / Tips

None of the options presented would reduce emissions by more than 1%.

In 2019, Labor and the Greens reneged on an election promise to put a price on agricultural emissions, allowing New Zealand’s highest-emitting sector to continue to pollute freely, while other industries pay through the emissions trading system. ’emission (ETS).

Farmers have long argued that they do not have a good option to reduce emissions and remain competitive in the global market, unlike other sectors.

* Decision to keep agriculture out of ETS “a burden on farmers’ shoulders”
* The government sets a deadline for farmers’ emissions
* Farmers: the emissions plan may not be as important as it looks

Instead, the government has launched a partnership policy program between the agricultural sector, Māori, and the government called He Waka Eke Noa, aimed at designing an emissions pricing policy by 2025, preferably at the level of exploitation.

As a safety net, he passed a law bringing agricultural emissions into the emissions trading system by 2025, in case no program was designed in time, and said that could occur as early as 2023 if sufficient work is not completed.

The first major policy document of this partnership was released on Tuesday.

The draft plan examines the ‘safety net’ option of entering agriculture into the ETS as well as options for a farm-level tax and a processor-calculated hybrid tax that have enabled some operations get payments to reduce emissions themselves.

James Shaw and Jacinda Ardern accepted an industry proposal to work in partnership with the industry on an emissions pricing plan.


James Shaw and Jacinda Ardern have accepted an industry proposal to work in partnership with the industry on an emissions pricing plan.

Each scheme has advantages and costs – farm-level levies are expected to be much more expensive and complex to manage than processor levies, but would reward actions by individual farms to reduce emissions.

The prices are either based on expected ETS prices, with a 95 percent discount that the government says would apply to agriculture in 2025, or on a “single levy rate” set by the minister.

Modeling suggests that the farm-level tax would cost farms between 1.4% and 6.0% of their operating profit, with agriculture in South Island Hill Country being the hardest hit.

However, these costs would not lead to significant reductions in emissions.

“Initial modeling suggests that these prices would result in reductions in total agricultural emissions of less than 1% reduction of both CH4 and N2O below 2017 levels, in addition to reductions resulting from other environmental policies,” states the document.

Greenpeace maintains that the government should withdraw from the partnership.

Sean Gallup / Getty Images

Greenpeace maintains that the government should withdraw from the partnership.

He warns, however, that the $ 137 million in revenue generated would be recycled back into the sector and that this should allow research and development activities that do the heavy lifting of reducing emissions.

The hybrid tax would increase a similar amount and also not directly reduce emissions by more than 1%, with research and development once again having to do the heavy lifting on emission reductions.

The safety net of integrating agriculture into the ETS is also expected to reduce emissions by less than 1%, although this could lead to higher costs for some farmers, with a 14.7% reduction in profits from operation for intensive farms on the North Island by 2030.

Greenpeace Aotearoa activist Christine Rose said the government should abandon the program altogether.

“The government needs to get real and put in place rules that will actually reduce emissions. We know what needs to be done, Jacinda Ardern and James Shaw need to be courageous, stand up to the dairy industry and immediately include 100% of agricultural emissions. , Rose said.

“Relying on endless consultations to find answers we already know, and voluntary agreements designed to fail, is like shuffling the loungers while the lifeboat burns.”

Climate advocate for forests and birds, Geoff Keey, said the partnership should be scrapped.

“He Waka Eke Noa had a job to come up with an emissions reduction plan for agriculture that would reduce emissions. They have completely failed. This plan is bad for the climate, bad for the future of agriculture, and taxpayers are going to have to foot the bill, ”Keey said.

“The agriculture industry has had over 30 years to tackle its climate problem. Once again they have failed, and now the government must continue the work that agribusiness will not do, and put them in. an improved emissions trading system. “

DairyNZ President Jim van der Poel said it was essential that the voice of farmers was at the table.

“The pricing of the NZ ETS would escape the control of farmers and they would face a broad tax base. In addition, farmers would not be recognized for farm work aimed at reducing emissions. We are working to get a better deal for farmers while meeting environmental goals, ”said van der Poel.

Climate Change Minister James Shaw has been invited to comment.

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