Climate change: Government's planned emission charge for farmers gets mixed reaction

  • 11/10/2022

Federated Farmers claims the Government's plan for agricultural emissions pricing will "rip the guts out of small town New Zealand", but Greenpeace says it doesn't go far enough.

The Government's proposals, released publicly on Tuesday, include requiring farmers pay levies on emissions on 2025, with all revenue being channeled into a package of incentives to encourage emission reductions. Details were also released on how sequestration will be recognised.

"This is an important step forward in New Zealand’s transition to a low emissions future and delivers on our promise to price agriculture emissions from 2025," Prime Minister Jacinda Ardern said.

"The proposal aims to give New Zealand farmers control over their farming system, providing the ability to reduce costs through revenue raised from the system being recycled back to farmers, which will fund further research, tools and technology and incentives to reduce emissions."

The plan's the Government's response to recommendations from He Waka Eke Noa, a partnership between government agencies, the primary sector and iwi. Ministers have also considered advice from the Climate Change Commission.

Two key differences between He Waka Eke Noa and the Government's proposals is that Cabinet will make decisions on levy prices with farmers only having some input, and around how sequestration is recognised. 

A consultation document has been released for the public to provide feedback on - and it immediately came under fire. 

National and ACT are concerned the differences between the He Waka Eke Noa recommendations and the Government's plan threaten putting the sector offside. They also say emission reductions could be undone by production moving overseas.

"Broad industry support is crucial for any enduring solution to agricultural emissions," National agriculture spokesperson Barbara Kuriger said. 

"This plan could have significant implications for our rural towns and communities. The Government has put at risk the consensus built by He Waka Eke Noa Partnership over three years."

The ACT Party's Mark Cameron said the Government had an "obsession with overseas plaudits".

"The Prime Minister wants to go on the world stage and say that New Zealand is the first country to price agricultural emissions. She won’t admit that her government’s proposal only leads to more emissions," he said.

 In her statement on the proposals Ardern said the scheme would be world-leading. 

"No other country in the world has yet developed a system for pricing and reducing agricultural emissions, so our farmers are set to benefit from being first movers," she said.

"Cutting emissions will help New Zealand farmers to not only be the best in the world but the best for the world; gaining a price premium for climate friendly agricultural products while also helping to boost export earnings."

According to a Cabinet paper, Climate Change Minister James Shaw put forward the idea of a cap on  methane emissions, which could be adjusted annually. 

"The Minister of Climate Change has concerns that the proposal does not provide sufficient certainty that Aotearoa new Zealand will achieve its climate change targets," it says.

The Green Party said the plan Cabinet went with doesn't go far enough and Shaw's alternative would "guarantee agriculture plays its part".

Federated Farmers President Andrew Hoggard said the plan will "rip the guts out of small town New Zealand". 

"Federated Farmers is deeply unimpressed with the government’s take on the He Waka Eke Noa proposal and is concerned for our members’ futures," he said.

"We didn’t sign up for this. It’s gut-wrenching to think we now have this proposal from government which rips the heart out of the work we did. Out of the families who farm this land.

"Our plan was to keep farmers farming. Now they’ll be selling up so fast you won’t even hear the dogs barking on the back of the ute as they drive off."

He Waka Eke Noa director Kelly Forster said those involved in the partnership are pleased key recommendations have been followed, but are concerned by some suggestions the Government has gone with alternatives to. 

"He Waka Eke Noa's recommendations were however designed as a carefully balanced package that was as equitable as possible across all parts of the primary sector," she said.  

"The Government has proposed alternative approaches in some areas, such as how sequestration is recognised, which may fundamentally alter the balance and could have significant implications for sheep, beef and deer farmers.   

"Partners will need to carefully work through the detail to understand the impact and it will be important to discuss these with their farmers and growers."

Beef + Lamb New Zealand also raised questions about how sequestration is recognised. Chairman Andrew Morrison said the categories of sequestration recognised have been reduced under the proposed scheme.

"We need to clarify these changes with the Government and understand the intent and practical impact," he said.

"New Zealand sheep and beef farmers have more than 1.4 million hectares of native forest on their land which is absorbing carbon and it’s only fair this is appropriately recognised in any framework from day one."

Greenpeace called the plan a "greenwash". 

"We need a system that actually reduces emissions, fairly, transparently and effectively. The Government’s proposals fail to achieve this. Greenpeace suggests phasing out the drivers of intensive dairy directly. We need a sinking lid on synthetic nitrogen fertiliser and imported feed," said campaigner Christine Rose.

However, she did welcome the proposal for Cabinet to make decisions around levy prices on advice from the Climate Change Commission. 

"Cabinet’s decision to not allow the industry to price its own emissions is a step in the right direction."

He Waka Eke Noa was established in 2019 after farmers expressed their desire to be involved in how the Government planned to tax agricultural emissions. If no alternative was developed, agriculture would fall into the ETS, but with a 95 percent discount. 

In May, the Emissions Reduction Plan (ERP) was released, detailing how different parts of the economy would cut down emissions over the coming decades. More than $700 million was allocated through the Climate Emergency Response Fund to the reducing agricultural emissions, including by accelerating the development of new technologies.

The plan said agricultural emissions make up 50 percent of New Zealand's gross emissions, including most nitrous oxide and biogenic methane.