In 2019, following the passage of the Zero Carbon Act, the Government consulted on bringing agriculture into the Emissions Trading Scheme (ETS). The agricultural sector, working together, convinced the Government not to do this and to work with the sector and iwi on an alternative approach for managing farmer emissions – through the He Waka Eke Noa partnership – with a view to introducing the framework in 2025.
However, the Government made it clear that if industry did not meet certain milestones, it would bring agriculture immediately into the ETS. There is already legislation in place that would allow it to do this – the ‘ETS backstop’.
The partnership needs to provide advice to the Government by the end of April 2022 on an alternative framework.
The partners in He Waka Eke Noa (including the Government) have developed two alternative options to the ETS.
A high-level explanation of these options has been released, along with an outline of what the ETS backstop would look like. Farmers have also been mailed a joint DairyNZ/B+LNZ summary of the options – you can access an online copy of this on the B+L website.
Information is being made available now, so farmers have time to understand what’s being considered, how the options work and how they compare. There will be a full formal consultation process in February where farmers can provide feedback.
B+LNZ has worked to try and come up with a better system for agriculture that seeks to fairly treat different types of farming systems and the different stages of farmers in their development, as well as working for other sectors. They have been part of this process with other agricultural organisations, including DairyNZ and Federated Farmers, and the Government and iwi.
B+LNZ’s key priorities have been
- de-linking the methane price from the carbon price (to reflect the separate greenhouse gas targets in the Zero Carbon Act)
- getting more recognition of the sequestration happening on farms than currently under the ETS
- the ability for farmers to be recognised for progress on reducing their warming impact, and
- money raised being invested back to agricultural research or on-farm changes that reduce emissions.
Their vision is to establish a framework that is separate for agricultural emissions from the ETS and which can be evolved and improved over time.
While they’re not perfect, B+LNZ believe the alternative emissions pricing options have advantages over the ETS for sheep, beef and dairy farmers. They believe they provide farmers with a lot more control and options to reduce the costs they face over time, either through getting their on-farm actions recognised or through better recognition of their sequestration.
The proposals are a starting point and will evolve as science, measurement and technology allow more accurate recognition of what’s happening on individual farms.
How does this process relate to the methane reduction targets?
New Zealand is the only country into the world to have taken a split gas approach to methane emissions, through the Zero Carbon Act. B+LNZ does not agree that the methane targets in the Act are justified based on the science around methane’s impact on warming.
B+LNZ’s overall vision is to come up with an agricultural specific framework through He Waka Eke Noa and get the methane targets successfully reviewed in 2024, so that by 2025 when the He Waka Eke Noa framework comes into effect the fundamental building blocks will be in place for a fair system for agriculture.
If an agreement on a pricing framework can’t be reached and agriculture goes into the ETS, in effect farmers will have lost the split gas outcome and it won’t matter what the targets are as the methane price will simply be linked to a rapidly-increasing carbon price.
Key dates
February 2022: All farmers will have a chance to have their say on the pricing options, through a formal engagement process – B+LNZ, DairyNZ and Federated Farmers will be running a roadshow around New Zealand to get farmer feedback and answer questions and there will also be an opportunity to provide feedback online.
April 2022: Farmer feedback will inform the recommendations He Waka Eke Noa partners provide to the Government about pricing. The Government will consider this advice and farmers will then likely get a further opportunity to provide feedback on pricing as part of further public consultation before the final framework is put in place in 2025.
For more information on the road shows and where the closest one to you is go to https://beeflambnz.com/emissions-pricing-roadshow. Have a listen to the podcast above to the interview with Sam McIvor.
Listen to the podcast to get the full story and full perspectives.
Angus Kebbell is the Producer at Tailwind Media. You can contact him here.
35 Comments
Fodder. Where did the " fodder" originate? Directly as green plants grazed ,or cropped plants cut ,carried ,stored and eaten. Where did the plants get the carbon? Hmm..ahhh ..ohhh...from the Atmosphere?..oh,you mean it is a carbon cycle ,apart from deposition of manure with carbon content ,to soils ,or carcasses releasing carbon on consumption..ah ,sequestered to soils, or variously through humans and other carnivores ,back to soils or similar,or back to atmosphere? So it is a carbon cycle,and no new "carbon"was either created or destroyed.
That is obliquely,your point,Beanie?
I am literally an environmental scientist and engineer. The science is conclusive. We need to reduce the concentration of CH4 in the atmosphere - pretending we're all good if we balance the 'flows' is seriously delusional. It's like saying that poisoned drinking water is fine as long as we don't make it any more poisonous.
Yes that's a very good analogy. You turn the heater off and you think all is ok to keep driving further into the desert. Then the car overheats and now you are really in trouble.
ps on a hot day towing a heavy load up a long hill everyone should definitely put the windows down and turn the heater on full blast. Unless you are driving an EV in which case don't even try to tow a heavy load up a long hill.
You can via nzx - https://www.nzx.com/instruments/CO2
Been easy money for the last year - Govt effectively publish the forward prices!
I know about this one. However this one charges 0.96% p.a. which is pretty high for a simple dumb fund that tracks ETS.
What I mean is something like SPY or VOO that charges 0.1% p.a. although that would require more participants trading in the open market including farmers and cooperatives.
Methane offers a much quicker route to reducing the warming effect of greenhouse gases because it is relatively short-lived in the atmosphere. Hence, COP27 will go hard on firm methane targets and the argument put forward by NZ agriculture that we can carry on emitting methane at the same rate that it dissipates will (rightly) get short shrift. We need to reduce the 'stock' of methane in atmosphere - not balance the flows!
NZ agricultural sector and Govt would be better spending their dollars and time working out how to transition away from industrial scale livestock.
All that is true Jfoe, reducing the conversion of CO2 to methane has an immediate effect that lasts as long as methane does...12 years...ie during our lifetime and about the same as our attention span in these matters.
But CO2 lasts a thousand years so if we want to reduce global temperatures for our grandchildren then we need to stop digging carbon out of the ground. Getting a quick win from reducing methane just takes our eye off the ball for the long game.
Well less than 5% of the people I know are making any effort to reduce their carbon footprint. This despite knowing it will cause eventual heating of the planet, and despite the government and councils virtue signaling by declaring a Climate Emergency.
Maybe we need to dramatically increase methane to actually get our attention by giving us a decade long taste of what will be a permanent situation if we don't stop digging up fossil fuels. I think it is only then that the politicians on both left and right will have a consistent mandate to act.
I have been attempting to fight another new subdivision in rural Franklin. I've gone through the Auckland Council Climate Plan and identified all of the areas where this subdivision contradicts the goals of the Plan and there are many. I can almost guarantee that this subdivision will be approved. At the end of the day the council doesn't give a damn. Why should the rest of us? As you can tell, I'm very disillusioned by the whole experience. The whole process is rigged in favour of the developer it isn't even funny. Until the council actually starts doing something about their "Climate Emergency", they can stick it all up their proverbial. I no longer care about playing my part.
And there lies the point. Methane from farms is an easy but pointless target that will allow transport etc to ignore their much more difficult obligations. Fossil fuels are the problem.
Of course it's worth noting that current agricultural practices can't survive without fossil fuel.
Meanwhile, overseas they continue to chop down the Amazon to farm more cows...
Whilst the NZ politicians, RE industry and big business require more people to keep demand and "growth" mantra going. Just as well importing people doesn't contribute to further carbon and methane emissions...
Why would you put that into the ETS which you don’t want to decrease?
Farmers should be funding research at this stage and when there is a viable technology for mitigation we should incentivise it.
Otherwise the country should just focus on the low hanging fruit - transport emissions, electricity generation and industrial heat. I’d rather tax those sources higher than tax cow farts.
Farmers are funding some GHG research e.g.
https://beeflambnz.com/your-levies-at-work/climate-change
https://www.dairynz.co.nz/environment/climate-change/climate-change-res… are funding GHG research
https://www.nzherald.co.nz/the-country/listen/working-with-others-helps…
Well Groundswell don’t like any of this so its off the ETS for farmers by the looks. Its not hard for NZ to do this. The problem is the top 2 inches.
It’s not my fault, I’ve done enough, Its their fault etc etc
Bit like sitting in a sinking dinghy and stopping bailing or plugging the hole as we argue about who should bail the water and plug the hole – we all end up in the water wishing we had bailed or plugged the hole.
Any fossil fuel user is 100% exposed at the current carbon price of $75 per tonne - this includes everyone who uses fossil fuels so in effect we all pay. Ag is a split gas approach where they will ultimately be at between 20 - 40% of total emissions, starting at 5% of total in 2025 - up to 10% by 2030 and then rising to another level (20 - 40%) - yet to be finalised. So ag pays, like everyone, for any fossils fuel emissions now - its the on farm stuff thats been bought in somehow.
We are the only country, I think, to have a split gas system for Ag.
Carbon price worldwide is rising fast - Europe well over $120, Australia now over $50 Aus.
The voluntary market is moving up faster than regulatory markets in price and demand volume - in effect the market is leaving government schemes behind. Markets are driven by customers who pay you for your stuff you sell.
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