So how “transformational” will the zero carbon legislation prove to be?
Many New Zealanders have come to believe global warming poses a real danger to their lives – but will the new legislation remove, or even lessen, the danger?
Under the legislation, agriculture for the first time is brought into the emissions trading scheme. That’s won support from Green lobbyists, but many say it’s too little, too late – “a weak-ass carbon reform”.
On the other side, the criticism is just as pointed. There are no tools to measure on-farm emissions and what the government proposes could shrivel NZ’s growth rate by up to $50bn a year.
Agriculture Minister Damien O’Connor and Climate Change Minister James Shaw in launching a formal consultation on the proposals laid out a scheme which will involve farmers calculating their on-farm emissions annually and being charged – or credited for reductions – from 2025. Emissions from nitrogen fertiliser would be paid by importers and manufacturers of fertiliser, also from 2025.
It is also considering a recommendation from the Interim Climate Change Committee that, in the meantime, emissions from livestock and fertiliser would be paid by dairy and meat processors and fertiliser firms from about 2021. Funds raised would be recycled to incentivise emission reduction and build the systems needed to model and account for emissions.
The government has spent the past 11 weeks considering the work of the ICCC, which was tasked with advising how best to bring agriculture into the country’s emissions trading scheme, and how to implement the government’s proposal for achieving 100% renewable power generation by 2035.
The committee’s report advised against the latter in preference for a greater focus on electrification of transport and industrial heat.
For agriculture, it urged early action, given the sector accounts for almost half the country’s total greenhouse gas emissions.
But it also recognised that it could take five years to implement a farm-level scheme of levies and rebates – hence the proposed collection through processors in the interim.
Shaw said resolving how to treat agriculture in the emissions trading scheme was probably the hardest question in NZ climate change policy and one that has been “struggled with for the better part of three decades now.”
Getting farming sector support for farm-level pricing from 2025 was “fairly historic” but he also noted the massive undertaking that will now be involved providing the necessary infrastructure.
The government is aiming to start voluntary on-farm emission reporting from 2023 and mandatory reporting the following year. That assumes a decision by 2022 that farm-level pricing is actually feasible.
The problem is there are no tools by which farmers can measure any reduction in emissions. Farmers who succeed in lessening emissions or offsetting them before 2023 won’t get any credits for doing so.
Harry Clark, ICCC member and director of the NZ Agricultural Greenhouse Gas Research Centre, believes the models needed to estimate on-farm emissions will require a lot of data and government and industry will need to work together to understand what information is available now, how much it will cost, and whether simpler models might be an option to start with.
That issue involves how feasible is it going to be and how cost-effective is it going to be?
The government has allocated $229m for improving sustainable land use, including $43m for the upgrade of the Overseer farm management tool.
O’Connor said Overseer is still probably the best modelling tool worldwide to be starting with. He said farmers want a system that is “practical, realistic and enduring” and getting those broader structures right will take time.
The key thing, he said, is that the sector is moving in the right direction.
The ICCC’s levy-rebate proposal, while integrated with the emissions trading scheme, was intended to be less complex and costly as farmers wouldn’t have to trade emissions units.
Based on a carbon price of $25-$50 a tonne, the ICCC expected pricing methane and nitrous oxide could raise between $47m and $95m annually during the first decade. That money would go into an Agricultural Emissions Fund to pay for programmes to help farmers reduce emissions.
The ICCC wasn’t asked to provide targets for the individual gases but has suggested officials need to determine a process for determining their different treatment.
Farmers would only be at risk for 5% of their emissions initially, as the sector would be granted a 95% free allocation – like those available to other high-emitters that are also trade-exposed.
At $25 a tonne, the ICCC estimated the emissions charge would cost farmers 1c kg/MS or 3c a kg of sheep meat.
Farming leaders have proposed an alternative transition arrangement, to be funded through their existing levy bodies, like Federated Farmers, DairyNZ and Beef + Lamb NZ.
National’s Climate Change spokesperson Todd Muller he has “total confidence” that technology will be developed to mitigate the effects of climate change.
“To simply take the NZ agriculture sector which is the most emissions efficient food producing sector in the world and say that the future for that sector is to tax it before you’ve got an opportunity to apply technology that hasn’t appeared yet I think is a nonsense. You first of all measure, then you can manage, you apply innovation then you can change.”
Muller argues agriculture should not be included in the Emissions Trading Scheme.
“That particular proposal looks to sheet that cost back to the sector at a manufacturing level and the Interim Climate Committee itself said that if you actually wanted to drive change in an agricultural context you price emissions on farm but that can’t be done at the moment.
Farmers don’t have the tools to be able to effectively measure their on-farm emissions, they don’t have any tools to mitigate or reduce those on farm emissions and the Prime Minister has said that there is no other country in the world that looks to its food production sector as an opportunity to tax.”
On the Zero Carbon Bill, Muller says he supports an Independent Commission but the methane targets are too onerous.
Politicians have been told an “unachievable” 47% methane reduction target would be setting farmers up to fail and investment in technology needs to be made first.
Parliament’s Environment Select Committee on the Zero Carbon Bill were also told this was not a good enough argument and dairy farmers had to accept they needed to create change now – before it was too late.
Arguments were also made for food security and the domestic supply.
It is understood the committee received more than 10,000 submissions on the government’s flagship climate change policy and will listen to about 1300 in the coming months, with the committee due to report back to the House in October.
DairyNZ, Forest and Bird, Horticulture New Zealand and GNS Science were among the first to be heard.DairyNZ says a planned methane reduction target will set farmers up to fail and that the proposals need robust economic analysis.
DairyNZ chief executive Tim Mackle in a written submission on the bill said:
“Farmers want to do what is right. They are ready to go on this journey, but they need a fair target that they can buy into. A 47% methane reduction target is simply setting farmers up to fail, if the tools are not available,”
DairyNZ proposes the target be anchored at no more than 24%, and be regularly reviewed against robust criteria.
Forest & Bird chief executive Kevin Hague argued the world could not wait on new technology to be developed and farmers needed to be doing big things right now to make a difference.
“We hope that it is in the forefront of your mind that we are running out of time to deal with climate change.”
The big question was around methane.
“If we imagine that we are going to hit any of these targets without making significant land use change, we are kidding ourselves.What I was hearing from DairyNZ is the expectation that dairying would continue more or less as it has been with incremental tweaking, and that’s just not going to do it. I believe this committee needs to very clearly object to that approach.”
He believes the government is sending mixed signals to ordinary people.
The Fonterra Sharesholders Council says the government’s proposed 2050 methane reduction target could be “catastrophic” for NZ unless there is a major scientific breakthrough in the meantime.
The council says a gross target, requiring a reduction in absolute emissions, is not appropriate. Nor is its scale reasonable.
“A target which potentially requires almost half of the livestock farming sector to disappear within 30 years would necessitate a rate of change which does not represent a fair and just transition for rural NZ,” the council says in a submission on the bill.
In 2017, New Zealand’s total greenhouse gas emissions were equivalent to 80,853 kilotonnes carbon dioxide. Of that 42% was methane.
While the bill proposes a 24% to 47% methane reduction by 2050, it also includes an interim requirement to reduce emissions to 10% below 2017 levels by 2030.
The council accepts the 2030 target but says a 47% methane reduction by 2050 would require a proportional reduction in the number of ruminants – mostly cows, sheep, goats and deer – by then.
The more extreme in the Green lobby argue just that: they say the obvious way to reduce biogenic methane by 47% is to reduce cow numbers by 47%. And this can be done quite quickly within the farm business cycle, simply by not replacing cows as they are killed.
Simple, really: And let New Zealanders take the cut in living standards that will follow.
And what then would be the chances of cutting child poverty? Or spending what’s needed on health? Or housing the homeless?
Still, NZ would be able to say it’s “leading the world”. And saving it at the same time. Don’t we love doing just that?