The latest Climate Change Commission advice on farm-level emissions pricing is generally supportive of farmers but struggles from mixed messaging, argues Professor Craig Bunt
Comment: The advice on farm-level emissions pricing released by He Pou a Rangi Climate Change Commission this month has received a mixed response not only by parties outside of agriculture but from across the agricultural sector as well.
Perhaps this mixed response reflects the mixed messages contained within the advice, which is generally supportive of and recognises the challenges faced by farmers, something that might not seem obvious when reading various comments from the agricultural sector (and social media opinions).
This support recognises the changes and key factors critical for the sector’s emissions reduction plans being successfully implemented, such as designing and building IT systems, administrative support, and the need for enforcement and establishment of regulations.
In terms of how synthetic nitrogen fertiliser emission could or should be priced, most would agree with He Pou a Rangi that any pricing should be at the manufacture and importer level.
There are good comments in the advice that some in the sector have yet to understand, particularly that emission reductions from the agricultural sector will not only maintain access to high-value markets but also that this is increasingly what the market expects.
Where the advice fails to provide a good argument is in its suggestion that all on-farm carbon sequestration be recognised through the New Zealand Emissions Trading Scheme (NZ ETS). While some sequestration is already recognised this is essentially limited to intentionally planted vegetation for sequestration that may or may not include harvesting.
Regardless, this form of recognised sequestration operates very much solely as only a revenue stream. To advise that other forms of sequestration, riparian plantings, wool, soil carbon, shelter belts be regarded the same as already recognised sequestration processes fails to take into consideration their essential and unique roles within farming.
Farming is one of the few human practices that sequesters carbon while producing emissions. Biology is at the core of all forms of farming, and everything produced by growing contains fixed carbon. It makes more sense to calculate all on-farm carbon fixing and off-set it against emissions at the farm level.
To move the recognition of other types of on-farm sequestration to the ETS will likely add more administration burden to farms. Furthermore, moving recognition off-farm will have unintended consequences such as reducing the incentive to plant more vegetation.
Proposing that on-farm vegetation promotion should be progressed in a separate yet undefined system and not also indicate how to recognise and reward benefits such as improved biodiversity and water quality will not encourage a move towards increased on-farm emissions mitigation.
The advice also suggests it is somehow unfair that only farmers would have access to financial reward from non-ETS vegetation. As mentioned, farming is an activity that sequesters carbon, and under all emissions plans and trading schemes this is very much unrecognised.
An industry that produces emissions while undertaking activities that sequester carbon should have control and be rewarded to encourage these activities. Those who miss out from such financial reward are likely not sequestering carbon to any great extent as part of their day-to-day activities and might even be producing emissions only.
The advice recognises that no other country prices agricultural emissions. This additional cost about to be applied to farming needs to be offset by encouragement (and retention of control) and acceptance by farmers.
Of concern to farmers is the additional cost of pricing emissions and that this may led to producing less and planting more trees, which will quickly diminish as an option for maintaining financial viability. The advice recognises this and recommends that financial assistance is appropriate to limit the disruptive change and help transition to a lower emitting agricultural sector.
It is of concern that the advice appears to not be supportive of technology and science solutions to reduce emissions, and while there are currently very few options on the market this appears to be the primary reason for the lack of support. A detailed analysis of the timeline for and what forms of new mitigating technology will enter the market is required to confirm this position is appropriate.
The advice is not anti-farming as some on social media would suggest, and contained within it is a great level of support and recognition of the challenges farming faces. Many different groups, agencies, and departments have recently released a barrage of reports, plans, responses, advice, and opinions relating to emissions reductions.
Now is the time for increased dialogue between the various groups. It’s going to be informative observing who is keen to talk and who refuses to listen.
