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Most people are aware the government is committed to pricing agriculture emissions by 2025, so New Zealand can meet its obligations under the United Nations Framework Convention on Climate Change (UNFCCC).
This commitment requires a 10% reduction below the 2017 level of methane emissions by 2030, a reduction of between 24-47% by 2050, and the achievement of net zero emissions of greenhouse gases (GHG) apart from methane by 2050.
One undesirable consequence of adopting these targets will be the direct contravention of the Paris Accord on climate change, which states that food production should not be sacrificed to achieve GHG reduction.
Footprint
New Zealand’s grass-based agricultural production is among the most efficient in the world, with about half the on-farm carbon footprint of the average of other countries. A recent study by AgResearch found that our exported red meat has a lower or at least no greater carbon footprint than domestically produced meat in other nations in spite of the freight. Sheep meat in particular has a very low footprint.
The government’s original desire was to include agriculture in the emissions trading scheme (ETS), first brought up 20 years ago by Helen Clark’s Labour government, but it was persuaded by the sector’s representative groups to allow them to come up with an alternative proposal that would be a fairer way to price emissions. Organisations, including Beef + Lamb NZ, Federated Farmers, Dairy NZ, Federation of Maori Authorities and six others, formed the Primary Sector Climate Change Action Partnership now known as He Waka Eke Noa (HWEN), which consulted with farmers before finalising its proposal, presented to ministers earlier this year.
The government responded to the proposal by October 11, accepting most of the recommendations, except critically the measurement of all on-farm carbon sequestration from day one and the involvement of agricultural experts in emissions price setting, governance and transitional arrangements.
However, it has become clear that pastoral farming will be under great pressure, even under HWEN’s original proposal, which would see 28% of sheep and beef farms suffering a profit reduction of at least 25% by 2030, while the government’s estimate is a 20% reduction of sheep and beef farmland.
There was a five week period allowed for final submissions, which opened up a serious rift among HWEN partners, with Federated Farmers deciding to present a separate submission. But it has also caused separate farmer groups across the country to object strenuously to HWEN’s proposals, as well as the government’s response. These groups maintain they had no opportunity to review the recommendations that were included in the final proposal. HWEN’s main success was to achieve a split gas approach where methane would be treated separately from carbon dioxide, but the likely price attached to methane emissions is a large part of the problem.
Pricing
HWEN proposes an initial price of five cents per kilo of methane rising to eight cents within five years, amounts which critics say will result in a catastrophic reduction in the viability of sheep and beef farms. Agriculture Minister Damien O’Connor is convinced innovative farmers will adopt new technology that will enable them to meet the targets, although this belief is largely founded on the sector’s huge productivity gains in the last 30 years.
Another issue, even if the government concedes HWEN’s submission on the points made, arises from the high cost of the proposed farm level measurement methodology, which farmers preferred during the consultation round earlier in the year. The sector in general considers the amount to be levied, including the price for methane, nitrous oxide and fertiliser emissions, should only be set at minimum levels necessary to meet the targeted reductions. The revenue should be reinvested in the primary sector to cover administration costs and R&D into methane reduction. The sector is adamant this revenue should not be applied to buying offshore carbon credits or repaying government investment in science and technology.
The sector is adamant this revenue should not be applied to buying offshore carbon credits or repaying government investment in science and technology.
Minister O’Connor is convinced the gap between HWEN and the government can be bridged fairly easily, as indicated by the government’s concession to allow on-farm sequestration from 2025, although no details are yet available on how this will be measured. Unfortunately, the recent reaction of farming groups to HWEN confirms they believe their representative groups have let them down in their eagerness to reach agreement with the government. This suggests a degree of resistance to whatever is finally implemented.
If no agreement is possible, the sector will be incorporated into the Emissions Trading Scheme (ETS), which is a blunt weapon for calculating emissions, based according to many experts on a faulty mechanism because methane, unlike carbon dioxide which lasts for hundreds of years, has an average life in the atmosphere of only 10 years. The split gas approach, accepted by the government, is a concession to agriculture, but the targets and the pricing to be applied to methane emissions is far higher than necessary when the number of sheep and beef have either reduced substantially or remained stable since 1990.
Landowners learn about emissions targets
A group of about 30 landowners, farmers and professionals attended an information forum at the Wellsford RSA last month to learn the details of the Government’s proposed Greenhouse Gas (GHG) Emissions Pricing Scheme.
This was due to be passed into law by the end of 2022 after a lengthy process culminating in a proposal from the cross-industry partnership He Waka Eke Noa, which was assessed by the Climate Change Commission and partially accepted by the Government with some important exceptions.
The forum was organised by the Landowners and Contractors Association, which is a rurally focused organisation representing north Rodney communities. The main speaker was local farm consultant Max Rowsell, who made the point he was only there to talk about the mechanics of the scheme, not to analyse its rights and wrongs.
He outlined the obligations on farmers for compliance when the scheme comes into law, gave reasons for its introduction and suggested options for on-farm mitigation of emissions. Although forestry is seen as a solution, he advised landowners to take expert advice before changing land use such as wholesale planting of exotic trees, noting the time lag between planting and harvesting or qualifying for carbon credits through the emissions trading scheme (ETS).
He emphasised the importance of reducing emissions because New Zealand is the sixth highest global emitter, mainly as a result of high pastoral production. Emissions have risen by 17% since 1990, with the size of the dairy herd doubling and a sevenfold increase in nitrogen fertiliser use. There is a need for change because consumers in higher paying markets have started to demand socially-acceptable food production, leading to major retailers introducing zero emissions targets for their suppliers.
He told the meeting every farm should have a Farm Environment Plan (FEP) by now, which would enable the measurement of on-farm emissions and offsetting allowances, using the sector’s centralised emissions calculator available from Beef + Lamb NZ and Dairy NZ. This would be used as the basis of a mitigation plan required by December 2024 and farm level emissions pricing to be introduced in 2025.
Mitigation options exist such as higher productivity, land use change and new technologies like vaccines, feed additives and genetic gains, but none of these appears likely to able to meet the government’s timeframe. Better options may come from progressive improvements in farming practice demonstrated by the FEP and the emissions calculator, which confirm the environmental efficiency of New Zealand farming.
Livestock buyer for Silver Fern Farms and Greenlea, Kevin Colthurst, made the point it was difficult for farmers and landowners to take any action in response to the emissions scheme until the government actually decided its final form and the price to be levied. He also reassured the meeting, saying the Far North has an advantage over Canterbury and the Waikato of being able to grow trees easily, which gives farmers more options for land use change to offset GHG emissions.
There were several comments and questions from the floor following Roswell’s presentation, mostly concerned with the impact of tree planting on pastoral land. Maungaturoto farmer Mike Smales, who bought land in 1970 for $10 a hectare, was recently offered $18,000 by an overseas company intending to convert to forestry, but he and his son have decided to look at their options for replanting some of the farm in trees, while retaining the rest in productive land.
Owen Becroft said there was a great opportunity for profit improvement by planting trees on less than 30% of the total farm area, while Ray Hollis from Te Hana had originally planted trees in the early 1990s for which they initially claimed $5 per unit in carbon credits, now worth $80 a unit.
Warkworth Hereford beef and sheep farmer Dean Blythen said it was difficult for farmers to know what to do without proper direction. The mood of the meeting generally echoed Blythen’s concern, with an assumption good land would go out of production, distorted by the carbon price. One voice from the floor said “principles cost you” when rejecting offers to sell out.
The forum was useful for ensuring the attendees were better informed about the expectations on them to measure and mitigate on-farm emissions, but they were little the wiser about how to achieve a reduction, other than carefully planting trees as an offset.
However, there was some discussion about the potential for New Zealand pastoral farming to prove its GHG emissions neutrality by measuring the carbon sequestration capacity of all planting and soil on farms. If this was achievable, New Zealand farmers could then focus on improving their current farm performance without adopting impossible or unpalatable plans to make the politicians happy.
