The Labour Government has softened a plan to levy farmers for their methane and nitrous oxide emissions after a farmer revolt, promising "relatively low" prices for at least five years, ample handouts to farmers to offset the levies and the inclusion of 'riparian planting' trees next to waterways in the Emissions Trading Scheme (ETS).
The concessions follow a rejection by farmers of a set of 'He waka eke noa' proposals from the Government in early October that were forecast to substantially reduce sheep and beef farm numbers and that excluded riparian planting from the ETS. The schism between farmers and the Government came after a two-year collaborative process designed to bring farmers 'into the tent' to price climate emissions that make up more than half of New Zealand's overall emissions.
The Government has also put off the hardest decisions about actual price levels until early next year and it now appears unlikely legislation to enforce the prices will be passed before the election. The Opposition has previously pledged to repeal the levies if elected.
On the eve of a Carbon Zero Act deadline to report back on its plans and now well behind the National/ACT Opposition in opinion polls ahead of next year's election, the Government has announced a final plan for:
- a "relatively low" initial methane price and a pathway of pricing for five years, to be reviewed after three years;
- a low nitrous oxide price that would mean farmers were no worse off than before the scheme;
- significant payment schemes to offset the costs for farmers; and,
- the inclusion of riparian planting in the ETS, which had originally been recommended by the He Waka Eke Noa colloboration, but was removed by the Government in the initial proposals in October.
Prime Minister Jacinda Ardern, Agriculture Minister Damien O'Connor and Climate Change Minister James Shaw announced the final plan in an Auckland CBD Government Policy Office at the last possible minute before the expiry of a December 31 deadline under the Carbon Zero Act. The Act includes a requirement for a 24-47% reduction in biogenic methane emissions below 2017 levels by 2050, including a 10% reduction below 2017 levels by 2030.
Ardern said the changes announced today would "give greater certainty for farmers and better recognise on-farm sequestration."
“After listening to farmers and growers through our recent consultation, and engaging over recent months with industry leaders, today we have taken the next steps in establishing a proposed farm-level emissions reduction system as an alternative to the ETS backstop,” Ardern said.
"We are working hard alongside the agriculture sector to strike the balance between building good levels of sector buy-in, while also ensuring the system is robust and meets our emissions reductions goals," she said.
“With or without the Government’s proposals the world is changing and New Zealand needs to be at the front of the queue to stay competitive in a market that is increasingly demanding sustainably produced products. Tesco, the biggest buyer of New Zealand products in Britain, wants all their products to be environmentally accredited and reach net zero across their entire supply chain by 2050, and Fonterra has warned farmers it risks losing customers and facing trade barriers if it doesn’t meet sustainability expectations, prompting the co-operative to look at setting a target for reducing emissions across its supply chain.
“If we don’t establish a credible plan to reduce agriculture emissions the future of our exports are at stake. I’ve always said we’re open to changes if they build greater levels of buy in. Today we move forward by moving closer together on a workable system.”
O'Connor said the Government had committed to a five-year price path to provide certainty for farmers, however he confirmed the final decisions would be made by ministers, rather than the industry-led bodies.
“The Government is also urgently working with the sector to develop a process to recognise on-farm carbon sequestration, which is a top priority for farmers," he said after more than two years of discussions and three years after the Act was passed in Parliament.
“We’re committed to working with He Waka Eke Noa’s partners to investigate options for targeted transitional support for farmers and officials will do further work on the use of collectives to simplify reporting and payment obligations," O'Connor said.
“We will continue to support farmers and growers to lower agricultural emissions," he said, pointing to $380m of support for farmers announced in Budget 2022.
Details on pricing and compensation scarce
The full report included the following details on pricing:
- A farm-level split-gas levy for agricultural emissions would price emissions from biogenic methane and nitrous oxide (including from fertiliser) separately
- Te legal point of responsibility for reporting and paying for emissions would be GST- registered business owners who meet the emissions thresholds (equivalent to ~200 tonnes CO2-e per year)
- Reporting could be done at either the individual farm level or via a collective.
- relatively low, unique prices could be set initially for both biogenic methane and nitrous oxide for five years based on set criteria
- a price pathway for both biogenic methane and nitrous oxide would be set for five years, with a review after three years
- the price of nitrous oxide would be capped for the first five years at a level that the sector would be no worse off than if the sector had entered the NZ ETS at this point.
- payments would be available to reward the uptake of incentives and eligible sequestration (removals)
- an interim approach would be taken for rewarding sequestration through a declaration-based system from 2025, followed by a transition to the NZ ETS, with sequestration from riparian plantings and from increases in carbon from indigenous forest linked to specific management interventions included from 2025; and,
- an interim, processor-level levy would be proposed only as a transitional step if the farm- level pricing system could not be operationalised by 2025.
The statement said Cabinet would make final policy decisions on the agricultural emissions pricing system in early 2023, followed by legislation to give effect to those decisions.
"Rather than using the Commission’s recommendations for a high price to drive behaviour change, with output-based assistance to moderate impacts, the Government is proposing to accept the Partnership’s recommendations for a low-price to raise revenue, which would then be used to fund incentives to drive behaviour change," officials said deep in the report.
The proposed farm-level pricing system would capture about 23,000 farmers and growers, which is around 96% of the sector’s emissions.
The 200 tonne threshold is expected to cover farms with more than 550 stock units (inclusive of sheep, cattle and deer, calculated on a weighted annual average basis), or 50 dairy cattle, or farms applying over 40 tonnes of nitrogen through fertiliser.
It is proposed to exclude minor-emitting sectors (including swine, poultry, goats, horses, alpacas, llamas, mules and asses) from the pricing system in 2025.
Reaction
Federated Farmers said it remained opposed to the Government's plans, even though they moved some way back towards He Waka eke Noa's original plan,
Federated Farmers national president and climate change spokesperson Andrew Hoggard said farmers wanted a scheme that did not warm the atmosphere and wanted the original 24-47% cut in emissions in the Act changed.
"Feds stick by the position we took in our submission, that without a review of the methane targets based on what is required for warming neutrality and for methane to contribute no additional warming, we will not be giving our support to any pricing mechanism," Hoggard said.
"Considering what is at stake, vague promises of an obscure future review with unknown terms of reference are simply not good enough," he said.
Here is the link to the full report.,
70 Comments
Make the farmers pay for their emission and they will adapt.
What dummybear forgets that in the 70's and early 80's farmers had cheap loans, tax incentives and subsidies which made them slow to adapt to new market conditions. I remember farmers bragging they didn't pay taxes.
They don't vote Labour so who cares.
GBH,
I have regularly disagreed with you, but here, I'm on your side. Indeed, I recently drafted a short paper on NZ farm emissions. With NZ's total CO2e emissions around 0.17% of global emissions, nothing we do could move the global dial. I have done some calculations on what a 20% reduction in farm income might do in reducing emissions and the subsequent reduction in income and they just don't make sense.
I have no farming connections and I certainly don't believe that all our farmers are prefect by any means, but the simple fact is that NZ really really needs the income they bring in. If I then look at what is happening elsewhere, I see China and India opening new coal mines, the emissions from which will greatly exceed NZ's total emissions, I see Europe rushing to build LNG facilities and according to Rystad Energy, that creates 10 times more emissions than piping the gas. I see Guyana about to become a major oil producer.
The atmosphere is agnostic as to where emissions come from and if NZ could magically reduce ours to zero, the world wouldn't even notice.
They can promise all they wish but if you look at Chinas coal consumption alone there is no way they will achieve this in any timeframe that will have a positive impact on the earth. Reduction is what is needed, not throwing the term of ‘sustainability’ and ‘net zero’ on things to make an excuse for continuing down the death spiral we are currently pursuing.
True , but there may be a few for whom climate change is a big issue , if they feel Labour ae not doing enough on climate change , and are more aligned with National on other issues , they will swing. Of course it all depends what climate policy National come out with . Then of course there is ACT to contend with . The problem for National is they have the rural vote with ACT, so could be seen to have nothing to gain , but alot to lose with urban voters.
Whatever way , I hope there is a clear difference for voters to choose, what the decide is up to the voters.
Not sure there is such a thing as a natural Nat voter, who actually votes labour over climate? Tactical Nats gave labour the thumbs up last election to head off Green influence, when it became obvious a Labour gov was in the bag. And Nats were a truly awful opposition, with bullets bouncing around toes as thick and fast as the "Special Operation".
“ a truly awful opposition.” Well now, you left your run quite late, but nonetheless you are a front runner for understatement of the year. Instead of responsible members of parliament, a display of brawling, spoiling batch of blue suited delinquents. Yet they will have my vote next year because right now, as they are, they are a better prospect for stable government than Labour, a house divided, cobbled up with The Greens out of left field and the Maori Party, quantity unknown. What a blasted conundrum this present lot of politicians are presenting to the electorate.
This whole emissions thing needs to be dumped, it's the biggest con job ever. How about addressing the elephant in the room and just start reducing the world population over the next 30 years. Either we do this the nice way or we wait for nature to do it for us. I will give you a clue, waiting for nature is not the nice way.
.. look at the photo attached to the article : Jacinda is looking downcast ...she's been having bad dreams of angry farmers , 28000 of them , roaring across the great paddock in their John Deeres ... coming closer & closer to her ... and she in her handpainted lady size 7 Louis Vuitton gummies are stuck fast in the mud ... closer they get ... she cannot move ...
One stark reality about this hapless government is their consistent inability to react to anything until after it has happened. Primary production has been cast down as the sum of all sins for five years now so is it any wonder that rural industry & community are up in arms. But it is no wonder at all that this government has only just noticed that, anymore that it is coincidental that a general election is taking place in less than a year. You can read ‘em like a book.
Like any shonky vehicle, when the going gets rough, things start flying off the wheel. Knee jerk reactions such as this, the facade is crumbling away, faster and faster. The priority now will be self preservation, not of the government but the whole menagerie of its mps, themselves individually. Whose seat is no longer safe. How can I get up the list. To hell with the team, it’s me first. As always what looks bad from the outside is always ten times worse on the inside. Indications are 2023 is to be a very ugly & bitter year for the caucus of this government. 1990 beckons.
To a disturbingly large number of urbanites, a farmer owns the land and all the stock on it. S/he has a stud animal and a bunch of breeding females, who each year produce a bunch of young animals, who are either added to breeding stock or sent to the works.
If s/he is a dairy farmer, s/he milks once a day, early in the morning, then spends the rest of the day...doing stuff. Sheep farmers shear once a year, and spend the rest of the time...doing stuff. Beef farmers just...do stuff. Croppers have really, really big gardens, and anyone can manage a garden.
S/he gets a lot of money in return. Fashion consists of gumboots, khaki shorts, a singlet (overlaid with a flannel shirt on colder days), and a bucket hat. S/he owns one dog.
It's a very tidy image.
1) "We're going to …insert policy… because it represents our party and our voters' core values"
2) There is opposition to the new legislation, "too bad, we are determined and stand proud"
3) "We're doing badly in the polls and may no longer be in government next year, let's dilute and soften our policy"
4) The people opposed to the original policy are somewhat appeased but will still not vote for the party who implemented the policy
5) The party's core voters are disillusioned with their party's lack of belief in their values and flip flopping and are also less likely to get out and vote for their party
Well the ETS isnt going anywhere - bit weak for a few years. TESCO, Nestle, Danone will want nothing less - damn customers.
Farmers are working out pay a little, plant trees get paid a lot.
Next farmers will complain the carbon prices isnt high enough as they reap the carbon from planting (and Cash)
Banks are happy - more income to cover higher interest - watch the farms coming to market in Feb due to interest rates, costs, lower returns and old farmers finally broken by age and new requirements.
The only people to pay are the average Joe taxpayers - as usual - Oh forgot the Climate and Environment but who really cares anyway and they don't vote.!!
As long as the rules are the same for all their suppliers I don't think NZ farmers have anything to fear from Tesco.
Ignoring the arbitrary rules of the ETS, if NZ sheep farmers are allowed to count sequestration from all the growing vegetation on their land (the same as UK farmers, who are allowed to count their hedges ffs) then we should do fine.
Farmers are also working out if they plant trees that land is now not really theirs. Fine if you have a lot of hectares and some very unproductive bits. But plant trees and be at the whim of every changing government edict does not suit a lot of farmers who realise land ownership is now a very complicated thing not to be disturbed lightly.
Govt achieves a perfect score
The latest ANZ Business Confidence survey is out.
Business confidence has fallen to an all time low of -70.2
But if you think that is bad enough, look at the breakdown by industry:
- Services -64.0
- Retail -68.6
- Manufacturing -74.5
- Construction -75.7
- Agriculture -100.0
Yep Labour has managed to get it so that not a single farm or agricultural company in the entire country is optimistic over the next 12 months for the economy – a perfect 0, never before managed.
https://www.kiwiblog.co.nz/2022/12/govt_achieves_a_perfect_score.html
Do farmers want continued access to credit? Because the banks are signed up to net zero and must reduce the emissions of their lending portfolios in line with agreements. The transition will happen one way or another, via regulation, access to capital, access to wholesale markets and through consumer preferences. Farmers need to get on board and work with their stakeholders, or change will be forced upon them. But hey, it wouldn't be the first time.
I think we should defer any implementation until there is a demonstrable and measurable reduction in greenhouse gas emissions from all the major emitters. Going out on our own like this where no other major emitting country is doing so shows the greatest naïveté by our Government. We must not sacrifice part of our national income until the major emitters lead the way and sacrifice their national income. I suspect not one of them will reduce their national incomes due to political suicide in democracies or the risk of being ousted in dictators.
So I have been hearing it from all over the place, but with only one ear open, a mind like a sieve and christmas to organise I cant be sure of the detail. However here it goes...the UN (?) just came out and downgraded their global warming best guess by half. Down to 2.5° to year 2100 . Haha, what a joke. My grass going hell for leather soaking up all the CO2 it can right now. Those cattle of mine cant keep up. Meanwhile the jets have fired up and the tourists are back in their hordes, all the jabbed have done their pacific holiday for the year, now its a drive off to the beach for a swim in a septic auckland sea. The hypocrisy.
If only the future ended in 2100 right? Perhaps it will? "Human-made greenhouse gas (GHG) climate forcing today is 4 W/m2 , equivalent to 2×CO2. Eventual climate response to this forcing, including slow feedbacks, is ~10°C (Fig. 1). Human-made aerosols reduce this to ~6-7°C."
http://www.columbia.edu/~jeh1/mailings/2022/Pipeline.arXiv.13December2022.pdf
My post infers the ridiculous in the situation. Here we are debating emissions targets, so much hoohaa, meanwhile I see green everywhere on my spot on the earth. Animals turning that green stuff into manure. Native forest of 1000s of hectares next door. Birds singing. Kaka flying past.
Living 70kms from a super volcano after a while gives perspective. Dig down just a little and the charred remains of trees are right there. Just 1900 yrs ago this property was obliterated. It will be obliterated again. And all the emissions targets and hoohaa wont stop it.
Check out the history of Mt Egmont/Taranaki. Most of Taranaki blew out of that mountain. And it will again. Probably sooner than later.
Emissions. Hah, NZ is great at emissions. Farming this land in this very short geographic timeframe, is a little heaven in a history of hell.
Better to just focus on the things we can control wouldn't you think? Rather than say "let's just pollute our way to a fried planet some time in the next 100 years, because we are super comfy today", why not take some of that right of centre personal responsibility and say tomorrow's generations deserve some comfy living too? Supervolcano cards fall where they may. As do asteroid impacts. Could be tomorrow, could be 100 000 years.
Digging down, you are just as likely to strike the ashes of human endeavour, as volcanism!
https://teara.govt.nz/en/photograph/25927/satellite-image-of-egmont-national-park
https://www.rnz.co.nz/news/national/481281/climate-activist-says-govern….
I think its pretty clear famers are best to take this deal , there's not going to be a better one.
All I can say as a farmer is stay positive and look through the bureaucracy. Stay tuned for opportunity. There will be plenty but don't think like grandad might have done and look to the future.
Personally I am confident of a good 2023. Farming will still be a winning thing for the passionate.
Don't listen to the negative crap. We are looking forward to the challenges ahead, bring it on!
Merry Xmas
Yeah I'm not worried Hans, I putter along, very low input, thankfully low debt. These people here have no idea the finance required to grow food. Land is so expensive, the rules and regulations to build infrastructure prohibitive. Those guys that push the barrow and grow a lot of food have balls. They take the risks, on plants and/or animals, machinery and buildings. Bring in export earnings for the country to pay for hospitals teachers etc
The christmas turkey or chop, punnet of strawberries, dollop of cream, and this lot hate us for producing it. I can think of a million things to skimp on to reduce carbon output. Food shouldn't one of them. For the world to be a little more even for everybody, food needs to be cheap. So I reason the people desperate to slam farmers for their carbon are plain mean. Its only going to hurt the poor.
Hi Belle, I know it is late on xmas eve but as a back country farmer we have no life, as they say. I think there is a bit of a chip on the shoulder mentality developing in the rural sector. No one hates food producers. This is a fallacy that I have been noticing being promoted in farming magazines and is only talked about in farming circles. I believe there needs to be a more positive approach taken by the likes of Fed farmers and Beef & lamb. They seem to kow tow to extreme lobby groups like Groundswell etc. Instead they should have a look at many farmers who are just quietly getting on with it and doing alright.
Yes there has always been a financial burden on farmers but it is no different in any commercial business, in fact many farmers have the advantage of inherited percentage.
Sorry about the mistype . I'll leave it there so your post make sense.
I would also say industry , consumers and all levels of government also need to accept the need for change. I am not blaming farmers for trying to keep things as they are , but the need for change is urgent , across the board.
The Feds are at risk of being horribly out of touch with their ultimate customers, especially those in Europe
Farmers may be opposed to it, but the money from buyers talking directly with the processors is making waves, and tipping the procurement balance towards goods with a lower CO2 (eq) profile.
Meanwhile farmers lobby to socialise the GHG pollution and maintain status quo.
Survival of the fittest will go to the people who read the writing on the wall and position for competitive advantage.
Here’s an interesting read. It outlines the decline of wool. It really started back in the 1800s and took around 150 years to finally kill the industry. Note the comments on fine wool and how ice breaker has moved from 100% wool as well. (Would you rebuild a shearing shed if it burnt down today)?
https://www.otago.ac.nz/centre-sustainability/otago0233375.pdf
All food and fibre industries should take note as the same is happening now even faster to all industries. If you sit back and think on the demise of wool we can’t rely on the fact it’s natural. Price rules and someone, somewhere is working out how to make something cheaper, more consistent etc.
We could find people will pay more for intangible services - carbon, biodiversity etc in time rather than physical natural things.
We are very lucky in NZ we can do both but our cost structures (not just Regs!!!)ageing population and diet changes etc are driving most of the change on hill country.
the trends we are witnessing in NZ Ag ie sheep numbers show this trend of change won’t change no matter what laws are passed but we do have options.
I’m very positive about rural NZ it will just be very different to the past.
Well, spent the last 3 nights camping at the Guthrie Smith, and Eastwood hill abortoreum s. Both , on the east coast, both graze sheep under the trees. Interesting, very little flat ground at either, the sheep like to sleep under the trees at night. Where the trees are well spaced or pruned, there is reasonable grass growth underneath. Under unpruned pine type species, the earth is bare, no pine needles or anything. Their focus is on the trees, not farming, but it's certainly a good place to see what trees and spacing the grass does best under.
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