Agriculture leaders have welcomed debate on the management of climate pollution from the farming sector, but say joining the Emissions Trading Scheme (ETS ) is not the way forward.
The Interim Climate Change Committee (ICCC) has suggested bringing agriculture into the ETS by 2025 and charging processors like Fonterra for 5 percent of their agriculture emissions. The money would be funnelled back into the sector.
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However farmers want to leave agriculture out of the ETS altogether, with the industry paying nothing for emissions until 2025. The agriculture sector would instead enter into a voluntary agreement with the Government.
The industry proposal was revealed on Tuesday with the launch of 'Primary Sector Climate Change Commitment: He Waka Eke Noa - our future in our hands to manage agricultural emissions.'
DairyNZ chief executive Dr Tim Mackle said it was an unprecedented sector-wide proposal to work constructively and collaboratively with Government, Maori and Iwi to make real and meaningful changes at the farm-level to reduce emissions.
"We and the ICCC both agree that a farm-based mechanism is the best way to address biological emissions, however, our views diverge when it comes to how we get there," he said.
"Bringing agriculture into the ETS at the processor level amounts to little more than a broad-based tax on farmers before we have the knowledge, support and tools to drive the practice change that will reduce emissions," said Dr Mackle.
Federated Farmers said the Government's discussion paper was a positive first step on a practical path to reduce livestock greenhouse gas emissions.
"We are agreed that a priority is to find a workable and affordable way that farmers can measure emissions and sinks at the farm level, and to adopt practices and any new technologies that will help drive down methane and nitrous oxide emissions," said climate change spokesman Andrew Hoggard
However he said the group was opposed to using the ETS.
"The ETS has failed to reduce carbon dioxide emissions from transport - in fact, transport emissions have near doubled since 1990. Universal pricing of methane will be similarly unsuccessful."
He said Federated Farmers had committed to is working with the government to design a pricing mechanism where any price is part of a broader framework to support on-farm practice change.
"Such pricing would be set at the margin - that is, only applying to methane emissions over the 0.3 percent per annum reductions that science tells us is enough to ensure methane no longer adds to global warming."
The ICCC estimated that the price incurred by farmers bringing agriculture into the ETS at 5 percent would be $0.01 per kilogram of milk solids.
Public consultation on the discussion document is open until 13 August.