Consensus reached on reducing agricultural emissions

The Government has reached an historic consensus with farming leaders to implement farm-level pricing of climate change emissions from the agriculture sector by 2025; signalling a strong commitment from the Government and farming leadership to cooperate in order to tackle climate change, announced the Minister for Climate Change, James Shaw.

Today the Government launched a consultation document, informed by the work of the Interim Climate Change Committee (ICCC), on how to bring agriculture into the emissions trading scheme, a key part of the Government’s plan to tackle climate change and reduce New Zealand’s emissions. 

Agricultural emissions make up nearly half of New Zealand’s total emissions profile and are the largest contributor to greenhouse gas emissions in New Zealand. 

“The cooperation and consensus between the farming sector and the Government is an incredibly important shift from farmers and growers on the need to tackle climate change compared to nearly 30 years ago,” Agriculture Minister Damien O’Connor said.

“We are now agreed on the outcome; Government and farmers want emissions to be calculated at the farm level where farmers have the most control over how they can manage their own emissions on their property.

“We are now consulting on the options for what we do in the meantime while we build a fair system to price emissions from 2025.

“New Zealand’s world-class reputation for its food and fibre is the backbone of our trade with the world. We know our trading partners expect climate friendly products so our farming sector has to make this transition in order to protect the value of our agricultural exports.

“Driving down emissions can drive down costs on the farm, and there are farm operations out there which are finding that out now,” Damien O’Connor said.

“It’s about offering choices to farmers and growers, along with the supports they need, to measure and manage agricultural greenhouse emissions so they can benefit from making emissions reductions,” says the Minister for Climate Change, James Shaw.’

“The big breakthrough is that, for the first time, the leadership of the main farmers’ organisations and farming businesses have reached a level of consensus amongst themselves that emissions pricing is part of the solution for reducing agricultural emissions, as it is for the rest of the economy, “ James Shaw said. “The significance of this cannot be understated, when you consider how things stood a few years ago.”

“Of course, there is a significant amount of infrastructure that needs to get laid down across tens of thousands of farms to make that work. Some of that infrastructure still needs to be developed. That’s why we need to work closely together over the next few years to make this work.

“The ICCC has provided us with its recommendations on how to make that transition work. Farming leaders have also provided us with their counter-proposal. We’re now putting those options before the wider public for consultation so they can both be tested,” James Shaw said.

Both options aim to see on-farm emissions accounted for and priced by 2025.

The ICCC recommends developing a fund, led by farming leaders, to build the skills and technologies farmers will need to measure and manage their on-farm emissions.

It’s estimated that could provide a fund of $47 million a year which would be 100 percent recycled back into fitting out farmers and growers with the measurement tools and know-how to control farm emissions through a processor levy over the next five years, which would eventually lead to farmers handling emissions at the farm-gate by 2025.

Farmers would receive a 95 per cent discount on emissions in line with similar discounts for other industries.

Farming leaders are offering an alternative sector-led proposal, which it would manage, to get the agricultural sector into an emissions pricing system by 2025, funded through the sector’s levy organisations, like Fonterra, Synlait, and NZ Beef and Lamb.

“The ICCC considered an arrangement like that proposed by the agriculture sector, but expressed some doubt over the ability to implement it. By consulting on it, the Government is creating an opportunity for it to be examined further,” James Shaw said.

The Government’s discussion document is now seeking public feedback on both the ICCC’s recommendations and the farming sector option over the next four weeks.

“We recognise the importance of maintaining farm profitability and understand that bringing agriculture into New Zealand’s emissions trading system requires that farmers are properly equipped to play their part in achieving the climate change goals needed to ensure our country is resilient and well-placed to grasp the opportunities low emissions food production can earn,” James Shaw said.

“It’s important to point out farmers and growers will have opportunities to earn money from their emissions reductions, and the Government is considering options to help farmers get credit for things like riparian planting to help them offset emissions,” Mr Shaw said.

“The options now up for discussion tie to an extensive Government action plan on climate change that includes:

• The Billion Trees programme
• $229 million in the Wellbeing Budget for sustainable land use - $122 million of this to support the on-farm changes required to unlock more value and use land more sustainably
• $60 million for agricultural climate change solutions and to improve the OVERSEER on-farm emissions data measurement tool.
• $14 billion over the next 10 years targeting better public transport, and other clean transport options, including the recent Clean Vehicles discount initiative.

“New Zealanders are committed to seeing greenhouse gas emissions reduced to levels that limit the impacts of climate change.

“What we’re working through, with proposals like these affecting agricultural emissions, is a range of options, initiatives and supports that can turn that commitment into meaningful action.

“We acknowledge and welcome the farming sector’s commitment to engage with the Government to be part of the climate change solution,” Mr Shaw said.

 Further background:

• It’s estimated the average dairy farm, with a 95 per cent discount on emissions, at the current NZ ETS price of $25/tonne would incur $0.01c per kg of milk solids.
• The average cost on beef production is estimated at $0.01c per kg of beef, $0.03c per kg of sheep meat, and $0.04c per kg of venison.