New Zealand farmers and growers have three weeks left to consider their sectors’ response to emissions reductions. Vincent Heeringa wonders why primary sector emissions are harder to fix than they should be.
While rioters tossed their toys, steel poles, chairs and parts of Molesworth Street at police last week, a more nuanced and important debate is being held by farmers and their industry representatives.
Since January, a roadshow has been touring the country, consulting farmers, growers and food producers on how to deal with primary sector greenhouse gas emissions. He Waka Eke Noa is a joint industry-government-Māori initiative that’s been given the grace by the Government to fashion its very own emissions programme outside of the Emission Trading Scheme. If He Waka Eke Noa cannot come up with an emissions strategy that satisfies the Government, that ‘free ride’ may be withdrawn and the primary sector folded into the ETS.
The stakes couldn’t be higher. In a week of disaster-news, the Intergovernmental Panel on Climate Change released the second of three reports of its Sixth Assessment Report. The conclusions are devastating and frightening, best summarised as “we are at the very point of no return. It’s now or never, kids”.
One waka, altogether-ish
So what’s the primary sector proposing as its contribution to emissions reductions? At first glance, it’s thin gruel. He Waka Eke Noa proposes two options, or three if you count falling back into the ETS. The first is charging for emissions per farm, including a separate price for methane and offsets for planting trees. The second is taking an industry average and charging the processor whose costs would be passed on to farmers.
The per tonne cost of the emissions would be determined by the ETS, with a 95% discount from the start of pricing in 2025.
The net result on all three options is, wait for it, an estimated 1 percent reduction in emissions by 2030. Hmmm. To put that in perspective, New Zealand has committed to reducing net greenhouse emissions by half by 2030. At COP26 in Glasgow, nations pledged a 30 percent reduction in methane emissions (methane being a key agri-GHG). Auckland Council has committed to halving emissions by 2030.
A 1 percent reduction seems laughably off pace.
The response has been scathing from some. Newsroom quoted Forest & Bird climate advocate Geoff Keey saying it’s time to scrap HWEN and give the job to the minister.
"He Waka Eke Noa had one job, to come up with an emissions reduction plan for agriculture that would cut emissions. They have completely failed. This plan is bad for the climate, bad for the future of farming, and taxpayers are going to have to pick up the tab," he says.
"The agriculture industry has had over 30 years to deal with its climate problem. Once again they’ve failed, and now the Government needs to get on with the job agribusiness won't do, and put them in an improved ETS."
Greenpeace Aotearoa campaigner Christine Rose is of a similar mind, telling Newsroom: "The He Waka Eke Noa voluntary partnership with big agribusiness polluters is like a round-table of greedy foxes discussing security measures for the hen house. It’s time to walk away.
"The dairy industry has shown that it will always resist measures to reduce emissions. Today’s proposal is just more of the same deflection and deferral and doesn’t stack up. The Government must get real and put rules in place that will actually reduce emissions. We know what needs to be done. Jacinda Ardern and James Shaw need to show some mettle, stand up to the dairy industry and include 100 percent of agricultural emissions immediately."
What do farmers think? They're lukewarm. Rural News reports universal rejection of the ETS option and no clear winner between the other two. Either way, cost is high on their minds.
“Concerns have also been raised about what the real cost of emissions reductions will be, both for individual farmers and the overall NZ economy – especially with a growing carbon price. Even with the 95 percent discount – decreasing 1 percent a year from 2030 – one sheep farmer calculated his initial annual bill will be $25,000 but this will have grown to $40,000 by 2030.
"Where am I supposed to find that money?" he asks. "It will make me financially unviable, and there are thousands of other farmers around NZ in the same boat."
There are fears this will lead to a huge exodus of sheep and beef farmers. Ironically, that could see these properties converted into pine plantations, where high-emitting manufacturers and transport companies will plant trees to offset, rather than reduce, their carbon emissions.
Messy hen house
The critics and the farmers are both wrong and their stances are not helping find a way forward. Here's why.
Let's start with the environmentalists. Their arguments are glib. For one thing, Greenpeace is using the wrong analogy and not just because we don't have foxes in New Zealand. I don't mean to be pedantic but it’s not the foxes who should close the farm gates. That would be the Government, which has singularly failed to provide the industry with targets, expectations or even a framework for emissions reductions.
In a fascinating set of papers dug up by Stuff, reporter Ben Strang reveals that the 1994 National-led government vastly underestimated the trajectory of emissions, predicting a net reduction in the coming years. “Given the extent of carbon absorption by our forest sinks we expect to achieve a reduction in net emissions of over 50 percent below 1990 levels by 2000,” said the then Environment Minister Simon Upton.
As Strang points out, in the following six years, net emissions flipped from minus 2.8m tonnes of CO2, to 3.85m tonnes. During that decade, greenhouse gas emissions went from a net 35.3m tonnes to 46m tonnes. Fast forward to 2018 and net CO2 emissions were 11.51m tonnes, and net greenhouse gas emissions were at 55.45m tonnes.
In Upton’s defence, he was relying on figures supplied by officials and he did set up checks to ensure New Zealand monitored and responded to its emissions. Helen Clark’s government followed up by establishing a levy on agricultural emissions to fund research, and attempted to launch a carbon tax.
You remember the reaction – the other inglorious episode on Parliament grounds: tractors riding up the steps to deliver the ‘Fart Tax’ petition to a beaming Bill English. The farmers were successful and the tax was replaced by an ETS, which was watered-down in 2011.
The ETS, until changed again in 2020, has proven worse than nothing by failing to signal the true cost of GHGs and allowing the trading of dodgy credits. And all the way along, the primary sector was excluded, leaving it without a coherent national framework for emissions.
The toxic combination of self-centred lobbying and near-criminal disregard by governments means we’ve lost 30 years in climate progress. The fox, the farmer, the local officials and everyone on the farm is now left with a very messy henhouse.
Putting the me in methane
There’s a second reason why it’s glib to dismiss HWEN. Critics quite rightly identify methane as a powerful GHG that needs to be reduced. They quite wrongly say New Zealand is doing nothing about it. Indeed climate scientists Professor Dave Frame and Dr Adrian Macey say New Zealand is the only country tackling methane in a serious way.
“In spite of the criticism, New Zealand is alone in having a clear and explicit target for emissions reductions from agricultural methane.”
Also unique is our programme of work [HWEN] to regulate and price agricultural emissions, under which it is expected that, by 2025, farmers will be “calculating their net greenhouse gas emissions and being incentivised to take action on climate change through an appropriate pricing mechanism for emissions.
“Finally, our split gas target makes it clear how our agriculture sector and its emissions fit into the 1.5C-2C temperature goal of the Paris Agreement – something that does not happen when countries mix their long-lived and short-lived emissions in a single target that doesn’t identify the actual effect on temperature.”
Taken together, this policy work means New Zealand has “a target that allows us to work out how much warming we will cause, and this implies that if we achieve the mid-range of our current target we will stop our warming in the 2030s, earlier than the United Kingdom, the EU and US. Targets aside, we are playing a leading role both at home and abroad in research on lower methane technologies.”
Could the sector do more? Be more ambitious than 1 percent? Of course it could and that's where I think farmers are wrong.
Stop moaning
Farmers are wrong to moan about the cost imposed on them by He Waka Eke Noa. No one likes paying more but how much have farmers not paid in the past 30 years? The free ride is real. Not only did the sector scuttle the carbon tax and avoid decades of the ETS, it's now being offered incredible terms – a 95 percent discount starting in three years.
The cost of methane and other GHGs has been externalised to the atmosphere and ultimately to us all (to our grandchildren actually) so paying something now is simply the right thing to do. It's also politically sensible. Reject these terms and farmers will find themselves in James Shaw's ETS before they can say methanogenic archaea.
Rather than seeing cost, progressive farmers will seize on this opportunity to evolve their businesses. New regulations have a habit of driving innovation. This is seen across a wide variety of industries: think of car safety, falling engine emissions, improved building codes and internet protocols.
Knowing your GHG numbers, reducing emissions, even reconsidering land use will be, if not already are, table-stakes for farmers. Without a robust GHG scheme, farmers simply won't be allowed to play, no matter how many tractors they throw at the Government.
Which brings me to the third way we see this so wrong.
The market pull
In the end, this political push-and-shove will play second-fiddle to a much bigger force for change: the market. Consumer expectations for sustainably sourced produce are now so strong that being carbon-positive will eventually be the only way New Zealand can play in the premium end of the market.
How do I know this? The evidence has been collected by the Agribusiness Economic Research Unit, one of the oldest research units in New Zealand. AERU has studied so-called credence attributes – the qualities that consumers use to judge a product beyond freshness, taste and texture. The AERU has discovered that New Zealand's credence attributes align well with consumers' expectations in our main markets and are key to driving premium prices. Environmental management ranks as high as any other measure in these studies. In the latest survey (2021), UK consumers ranked GHGs at 76%, up from 70% in 2015. In China it was the same (though down a little from 2015).
New Zealand gains a premium based on its reputation – but that reputation is hard won and continuously improved. When considering New Zealand's trade advantage, the economist David Teece proposed three pillars: sensing (understanding consumers), seizing (mobilising resources) and transforming (continued renewal).
Reducing emissions is an example of transforming. Without a credible and continuously improving emissions reduction scheme, New Zealand's primary sector will slip and lose its premium place in consumers' hearts and minds.
For the planet, and if not for business, the message is clear: get on with it.
Vincent Heeringa is a freelance writer and consultant. This article first appeared in his blog, The Feed
