David Frame on the ETS and HWEN, on afforestation, and how we can get to where we need to be climate-wise and still maintain the lifestyle we have - in spite of underperforming public institutions

“It’s actually farming, by and large that keeps the export receipts flowing into the country that lets us maintain the lifestyle that we have. And in spite of the fact that people keep saying, oh, we need to move away from that, we need to be this highly skilled country. You know, our education system does not line up with delivery on that. We have consistently failed to produce companies at scale that are those highly skilled service sector companies, we have consistently failed to educate people and even to the level of the top half of the OECD countries.”

This week I am catching up with academic and environmental advisor David Frame to get his thoughts on where we are at in terms of environment and emissions policy for New Zealand Farmers Dave joins me now.

Frame works on various aspects of climate change science and policy, and various other global public goods issues. He say’s most of his climate change work has two aspects. One is looking at extreme events and how the climate is changing at the moment. He's directing an endeavor fund program on that, which is around $10 million of investment looking at what kind of fraction of extreme events can be sheeted back to climate change, and how that might change in the future. "That's a fairly big chunk of what I do. And the other aspect is I use simple climate models to shine light on policy questions. And that's we're in New Zealand that the main manifestation of that is looking at methane and the role of methane and climate change in the near climate targets and climate policies."

I asked him what his thoughts were on the HWEN proposal and indeed the Government response.

“First of all the structure of He Waka Eke Noa is fine, it treats the gases in line with their impact on the climate, pricing, there's a whole bunch of different ways you could go about setting up the price or quantity based mechanism, you know, cap and trade system or just a levy to what has been suggested, and on biogenic methane on farms and that's totally reasonable. I do think that it concentrates all the risks, all the mitigation on to sheep and beef farmers, and I don't think that's what most of the people who are active in this area think is kind or the right or the fair outcome. So you know, I think there's an open question about how much you allow farm sequestration to offset the methane warming, Simon Upton has just released a report describing how a one off planting on farm could offset an extra herd member basically so if you have a sheep it's about 0.08 hectares of pine, this would permanently offset that extra member of heard forever. There's a lot of ways you could use sequestration that are sensible, and that would lead to sound outcomes.”

“I think it’s regrettable that the government didn't involve more variables that it just went with the levy and just on the methane. Because real farming systems of course, you know, you're integrating across a whole bunch of different properties and variables, you're worried about your soil, you've got trees, you've got the animals, you've got fertilizer use and fertilizer use as another component of climate policy, really because of nitrous oxide emissions which are very significant. And it's really a question of how many moving parts you want your agricultural climate policy to have. Nitrous oxide is actually something of a hybrid between the short lived and long-lived gases. It's mainly long lived, but a bit short lived. There's kind of an open question about policy design there, and I would hope that the government in the sector would go back and try and do a bit more integration, so that the policy ends up being a little bit more rounded, and a little bit less, perhaps just singularly focused on methane where there aren't many options to do something about that. So I think there's further work to do, but it's a hell of a lot better than sticking it in the ETS, which I think would have been an unsubtle policy that where farmers would then be exposed to price rises that are necessary in the face of needing to get to net zero on carbon dioxide and I think that could have all sorts of consequences down the track. We will have farmers that end up inheriting those price rises, when they really shouldn't for their methane.

Frame hopes He Waka Eke Noa is going to be a work in progress and that a future National Government sticks with it. He believes it's reasonable that we have prices on greenhouse gases, and is the fair thing to do but says there's a question of how high they should be particularly in the absence of other countries doing anything like this, and the question of conditionality of what other countries are doing, how much we are prepared to expose our industry to prices that no one else faces when this is after all a collective problem. They should be active parts of the discussion around He Waka Eke Noa.

The discussion moved to afforestation, and I asked for his views on afforestation and if wholesale land use change for the sole purpose of carbon farming is the right direction for this country?

“No, I don't think it is. For a decade or so I've been going to business and climate meetings, and you hear companies in urban New Zealand get up and say, well you know, we're going to change a few light bulbs and do a bit of demand reduction, reduce our electricity consumption and what have you, our fossil consumption where possible, and then to meet our ambitious targets we are just going to plant a lot of trees, but they then kind of have to say, because they know there aren't enough trees, there's just not enough space for that to be a scalable policy, they kind of go well, I don't know what the rest of you are going to do. The fundamental problem from a policy perspective here is something that should be a last option or a backstop policy that's planting trees to offset what you can't reduce is too cheap, and it's the first option people go for instead of being the last. And that's basically a policy design issue, what they really should be doing is limiting the amount of forestry and making people do more domestically to reduce emissions. And to be honest, New Zealand's international policy relies far too much on trees being planted overseas as well, this is this issue with a forestation first instead of actual reduction of our gross emissions it is a generic problem that New Zealand has both at the Government level and at the firm level. And it puts us out of step with the rest of the world who think that mostly your emissions reduction ought to be gross emissions reduction rather than offsetting. So I think it'll have to change if we're serious about it. I also think it will put pressure on the very ambitious goals and the zero carbon act and in the carbon budgets and I'm not sure how they will age those particular goals.”

Frame grew up in Southland and farming is a significant earner for the region; if you are not farming in Southland you are generally working in an industry, by in large that services the primary sector. He has been in academia for a long time and has been at universities one way or another for over 30 years now. He says that in spite of the fact that people keep talking about the need to turn this country into a highly skilled and developed kind of economy and at the highly skilled end of the service sector, New Zealand as a whole hasn't made that transformation.

“It’s actually farming, by and large that keeps the export receipts flowing into the country that lets us maintain the lifestyle that we have. And in spite of the fact that people keep saying, oh, we need to move away from that, we need to be this highly skilled country. You know, our education system does not line up with delivery on that. We have consistently failed to produce companies at scale that are those highly skilled service sector companies, we have consistently failed to educate people and even to the level of the top half of the OECD countries. So all the people who say that the bright new 21st century doesn't involve farming, have very little evidence to point to that actually, there's a major shift underway."

"In fact, our farmers have been among the people who have innovated most, I would argue that they have actually done a good job of reacting over the last 40 years since the old days of the supplementary minimum prices, they are an innovative sector, and they're one of our few. And the other main export earner of course is tourism, which as we've just seen over the last couple of years, is a rather capricious way to make your living. And it's not one where you have highly skilled jobs as a rule. I'm open to the idea that we might do different things in the future, because who knows what the future holds, but there's been a lot of talk about this migration to a highly skilled service economy for over 20 years, well over 20 years, it hasn't really happened. And in the meantime we still expect the farming community to be the ones to earn the money overseas that lets the rest of us live the lifestyles that we do."

"But our universities are not in the top 100, our schools are not having a blinder. If you look at the OECD comparisons, until those highly skilled sectors step up, I wouldn't expect things to change very much. And actually, I personally think New Zealand pays its way well with agriculture. And I think the normal thing to do is build clusters around what you have, rather than what you kind of look at other people having and thinking, Oh it'd be cool if we had a Silicon Valley. I was the Treasury analyst who did the comparison with Finland back in the 90s, when we were looking at Nokia, and that all grew organically out of out of a forestry company who were making their own radio telephones, and that Finland happened to have a lot of engineers for historical reasons. And so that cluster kind of found a way to grow organically and the government supported it. And that was all great, but it didn't come out of nowhere. And I think a lot of what people say when they expect us to move beyond farming is pretty much based on wishful thinking, and they can't really point to these big clusters where we're doing a terrific job, and we're going to be the next big thing. And actually, our best bet in that next big thing space probably is still agriculture. I like the fact New Zealand's a food producing country, I think it's one of the reasons that we actually didn't have the kind of total panics that other countries had in the early days of COVID. Because food security is one of the really foundational forms of security.”

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Angus Kebbell is the Producer at Tailwind Media. You can contact him here.