The Government's decison to exclude agriculture from the ETS until technology and trading partners catch up is sensible
The Government has plumped for commonsense rather than economic suicide by deferring the agriculture sector’s entry into the controversial Emission Trading Scheme (ETS).
Farmers and climate change critics have consistently argued for a longer delay and/or for agriculture to be left out altogether – until the necessary technologies are available to reduce on-farm greenhouse gases.
A recent review of the ETS called for a slowdown of its implementation, but left unchanged controversial plans to introduce agriculture into the scheme from 2015. The review panel, chaired by former Finance Minister David Caygill, had recommended that the agricultural gases methane and nitrous oxide be brought into the scheme in 2015, as the current legislation requires.
In the panel’s model, farmers, rather than processors like the meat and dairy companies, would be accountable for those emissions, which make up nearly half the national total. They would get a free allocation of carbon credits covering 95 per cent of their emissions for the first two years, which would fall to 90 per cent over the following three years and by 1.3 per cent a year thereafter.
However, Climate Change Minister Nick Smith has sensibly ruled that agricultural emissions will only be included if “practical technologies are available to enable farmers to reduce their emissions and more progress is made by our trading partners to reduce their emissions”.
Federated Farmers is understandably delighted with the Government’s move. It has always argued that it’s crazy for New Zealand farmers to be hit with the costs of an ETS when they had no way of mitigating these and when other farmers around the world were not being penalised accordingly.
“Farmers are extremely pleased that Minister Smith has reaffirmed a pledge the Government has given to Federated Farmers, that biological emissions will not be included in the ETS if our trading partners do not follow suit,” its vice-president and climate change spokesman, William Rolleston, said.
Meanwhile, critics and environmental doomsayers like the Green Party’s Russel Norman are not so happy. He has even had used recent Reserve Bank forecasts that expect current export commodity prices to remain high as proof that farmers can afford to pay any costs imposed by agriculture’s introduction into an ETS.
“It means that greenhouse-intensive industries like dairy are in a strong position to pay their way. But this Government will continue to give them a handout.”
But Smith has dismissed Norman’s predicable whining by saying the Government’s primary objective with the ETS is to drive investment into more efficient production.
“We are not interested in simply including agriculture in the ETS to impose a cost when there are not practical technologies through which they can reduce emissions, in contrast to a sector like electricity where there are really good opportunities.”
Now there will be the invariable calls from Norman and his ilk of eco-Nazis that New Zealand farmers are getting a free ride, but again this is selective reporting. There is already evidence – which is also noted by Caygill’s Review Panel – that the agriculture sector is reducing its greenhouse gases. Emissions per unit of product from agriculture had fallen by about 1.3 per cent a year over the past 20 years – due to improved management practices, animal genetics, pasture and crop genetics and technological changes.
The Government’s view that it won’t support the introduction of agricultural emissions into the ETS is smart, sensible and economically prudent.