Government gives farmers until 2025 to come up with their own on-farm emissions pricing scheme; If they don't pull their weight, they'll end up in the ETS

Government gives farmers until 2025 to come up with their own on-farm emissions pricing scheme; If they don't pull their weight, they'll end up in the ETS
Image sourced from needpix.com

Farmers have successfully convinced the Government to give them a chance to come up with a way of pricing agricultural emissions at a farm level by 2025, to avoid being brought into the Emissions Trading Scheme (ETS).

However, if they don’t make enough progress, they risk being brought into the ETS as soon as 2022.

The Government plans to pass legislation, as a backstop, to enable fertiliser emissions (charged at a processor level), and livestock emissions (charged at a farm level) to be brought into the ETS by 2025.

Under the legislation it will have the ability to bring both fertiliser and livestock emissions under the ETS earlier, should a Climate Change Commission review to be done in 2022 find the sector isn’t pulling its weight. In this scenario, these emissions would be charged at a processor level.

The five-year joint action plan between the sector and Government includes:

  • Improved tools for estimating and benchmarking emissions on farms
  • Integrated farm plans that include a climate module
  • Investment in research, development and commercialisation
  • Increased farm advisory capacity and capability
  • Incentives for early adopters
  • Recognition of on-farm mitigation such as small plantings, riparian areas and natural cover

If agriculture ends up being brought into the ETS, emitters will receive a 95% discount or “free allocation of emissions units”. 

While trade-exposed industrial emitters currently receive discounts of between 60% and 90%, 95% is the "upon entry" level stipulated in the Labour-New Zealand First Coalition Agreement

Deputy Prime Minister Winston Peters said: "Our decision to put in place a sector-led plan to reduce emissions at the farm gate shows we've listened to farmers."

Prime Minister Jacinda Ardern said: "I'm proud that we have a world-first agreement as part of our plan to tackle the long-term challenge of climate change and we've done that by reaching an historic consensus with our primary sector...

"This plan provides the primary sector with certainty and puts us shoulder-to-shoulder on a path to reduce emissions."

The 11 primary sector industry groups, part of the agreement with the Government, said in a statement: "We firmly believe this agreement will enable the fastest possible progress to be made towards reducing New Zealand’s biological emissions in an effective and sustainable way that brings farmers, growers and communities along with us."

They have committed at least $25 million a year to achieving the plan in what they say is an "ambitious" five-year timeframe. 

Ardern said the Government was providing "ongoing support", including $229 million allocated at Budget 2019 to "invest in projects to protect and restore at-risk waterways and wetlands, and provide support for farmers and growers to use their land more sustainably".

Greenpeace accused the Government of "selling out" to agricultural lobbyists. 

"Agriculture is our biggest climate polluter. An emissions trading scheme without the sector in it is a joke and won’t be able to combat the climate emergency," it said. 

Here is a copy of a facts sheet provided by the Government:

The Climate Change Response (Emissions Trading Reform) Amendment Bill will be introduced today and have its first reading in early November 2019, and will then be referred to the Environment Select Committee. The Bill should pass in early 2020.

The key features are:

• To price primary sector emissions from 2025 onwards and a joint plan of action to get there and reduce emissions in the interim

• In order to ensure a steady legislative path, the bill will contain agriculture entering the ETS at farm-level for livestock emissions and processor level for fertiliser emissions in 2025 and setting the level of free allocation at 95%.

• HOWEVER – as agreed with the sector we will work together on an alternative pricing mechanism for on-farm emissions in 2025, as the ETS was originally developed for a small number of big companies, not tens of thousands of individuals.

• This will be done as part of a 2022 review which will look at:

– What progress has been made on the agreement with the sector

– Whether there are any barriers to implementing farm level pricing in 2025

– Developing an alternative pricing mechanism to the ETS for farm level pricing

– If the review finds there isn’t enough progress the Government can put the agriculture sector into the ETS at processor level earlier than 2025

– Changes to the bill regarding this 2022 review will be introduced via Supplementary Order Paper (SOP)

• To encourage emissions reductions and build the systems and capability for a workable and effective farm level scheme in the interim period prior to 2025, Government enters into a formal agreement with Iwi/Māori and the sector.

• A Governance Group accountable for delivery of the Commitment will include sector representatives, government officials and Iwi/Māori representatives.

• An SOP will also include change to require the Climate Change Commission to provide advice to inform phase-out of agricultural allocations.

• Farmers will be required to report their livestock emissions from 2024.

NOTE: Story has been corrected. The initial version incorrectly said fertiliser emissions will "definitely" be brought under the ETS by 2025. As per the above, this isn't the case. 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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14
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The ETS is the biggest con of the 21st Century , its a BS tax, plain and simple . Why the F......... are we attacking our successful farmers whose cows add very little methane to the planet , when the biggest contributor to methane production is Rice growing in Asia ?

Do you think that China would do the same to its rice farmers ?

So we tax our farmers and put them at a disadvantage , and its not as if all the dairy farmers are multi-millionaires either .

Hopefully the farmers and provincial New Zealand vote this awful Government out next year

Dirty Dairy - does Rice fart and belch?

Very well thought out and researched reply, well done.

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... how much better if we stopped listening to the UN , and developed a plan to clean up our rural and urban pollution simply because we live here , and we want the place fresh and green ...

Whats stopping us GBO ? Angry old white men?

I seem to recall this exact racist comment from this same user just a few days ago.

Are we here to discuss the topic at hand, or are we here to announce our bigotry? I wonder what the moderators of the site think of this.

Look around, the place is fresh and green, you have to look very hard to find somewhere that isn't and when you do, it generally isn't on a farm.

... microbial and bacterial emmissions in periodically flooded rice fields produce extraordinary quantities of methane gas and nitrous oxide . . Estimates are that this accounts for 2.5 % of all man made gas emissions....

Permanently flooded rice fields by comparison , have negligible CH4 and NO production .

Agreed.

The route cause of all problems is the greed of the few, and look no further than the banksters who's interest model relies on exponential growth on a planet with finite resources.

The money system has been nothing more than a means of control, through propaganda using the mass media they also control that blind the ignorant masses into thinking they are wealthier with house price inflation. Then it all disappears with retirement home property industry, leaving nothing for their children or grand children to make the (much larger) step into their own home.

Thankfully the educated youth of today have worked the corrupt system out, and the recent demonstrations overseas are gathering pace are testament to this. What I don't understand about this greed game played by the few, is the returns on life at very marginal after you have reached $3-5 million in today's money; and the only conclusion I can only come to is its to feed the big egos they have of themselves.

Note that most emissions 'measurements' (e.g. of livestock CH4 emissions) are in fact modelled outputs. So what is being talked through here is the ever-needful refinement of the models available at farmgate levels, not measurement in any engineering sense of the word. To be sure, those per-farm models will crudely represent some fraction of the myriad factors which generate emissions: soil, crop/feed mix, microbes and insect factors, individual animal gut biomes, temperature, season, time of day - it's a long list with many interactions not fully understood. But 'emission measurement' it ain't.

Queue the Farm Emmissions target re-set ....

... this is the government par excellence of targets missed , resets , delays , and promises broken or abandoned . . .

What a shame that Simian is leader of the Nits ... the Crusher would be making great capital out of this if she was Head Nit .

Ah but is Jacinda stalling for time she doesn't want this to be her nuclear moment rather than her nuclear free moment given the lack of conclusive scientific verified evidence either way that CO2 , CH4 is the main contributor to climate change.

If there is some way of accurately measuring methane emissions and then some proven methodology for reducing them then admission of agriculture into the ETS makes sense, otherwise the whole process simply becomes a tax on production.

So long as methane is actually a proven problem and not just part of natural process. And so long as credits such as soil carbon is added. Basically five years to prove the BS of Agri being 48% of the problem wrong.

Surely farting has to be a natural process?

I mean based on the dopey logic they apply, we should cull (or at least tax) all the Wildebeest in the great migration.

Also you can only conclude that the mass eradication of the Bison in North America was actually great foresight by the first wave of "greenies" intent on stopping climate change.

https://www.ecowatch.com/biomass-humans

try apples with apples, eh?

Oh I fully appreciate the problem. But it is still frowned upon to stand on the rooftop yelling get rid of the people.

Very good let's look behind headlines.

https://youtu.be/8-zaQWAaPAg

Actually we are measuring the wrong end of the process.

All activities - including agriculture as practiced - are dependent on fossil fuels. A much simpler way would have been to physically dial-down the amount available in NZ, YOY.

That would have been simple, clear, and would have had the desired effect. Currently we are allowing unlimited gas in the tank, but debating how closed-off the exhaust-pipe should be. That closely resembles denial en masse

Exactly, but the problem is not the Government's to solve.

The general populace need to understand it is their way of living that is the problem, and simply stop consuming. Something that does appear to be starting to happen.

The only way you can likely address that is by taxing fossil fuels. This will tax the activity that causes most of the issues and will also reduce overall usage of it.

It has to be a natural consumer led process, artificial intervention will only lead to unintended consequences (to Pollies anyway - the general populace are a little more onto it)

A prime example of what life will look like after the O&G shutdown, can be seen during the Pohokura outage. Consumption didn't change one bit - rather we had a massive uptake of Indonesian coal at Huntly to maintain electricity to Auckland.

.. " denial en mass " .. or a failure to sell the story to an increasingly sceptical public ?

Scepticism does not imply denial !

But somehow a large portion of the public seem to be able to dial their skepticism right in on where any change will effect them the most financially. They will then remain so incredibly skeptical no matter what evidence is presented, that their point of view will never change. You can call this what you will.

But it is tapped into by those who would filibuster.

eh.....

Agree. Supplements, fertiliser and off farm inputs are what enhance dairy cow methane emissions.

Not even world first agreements are good enough for some people, they may not be happy until agriculture ceases to exist. I wonder what sort of world they envisage leaving to their progeny.

Yeah, I thought this agreement sounded pretty reasonable. Like, it's clear people want to reduce overall pollution and this works toward that without putting too much burden on at one time and while also incentivising adoption of technology that might help.

And GMO'ing grasses to lessen ruminant emissions. And considering nukes for Awkland power peaking generation to get out of gas (which is gonna run out anyways...) and coal. And consider lignite/biomass to liquid fuels to ease the transition to all-electric or whatever we need for transport in a long thin hilly country unsuited to canals and rail...... but we cannot do any of this because shut up.

"I wonder what sort of world they envisage leaving to their progeny".

I envisage one which can be maintained long-term. That eliminates BigAg as practiced. The rules are: no finite resource draw-down, no renewable resource draw-down beyond maintenance levels, no sink filled beyond existing levels. You determine your levels of per-head consumption, stay under those three limits, and that gives you the carryable population.

But we won't do that, and it's probably too late anyway.

and it's probably too late anyway.

When you add up all the carve-out subsidies for industry and agriculture (which end up being paid for by the taxpayer public under the ETS) - I suspect we'd have made more progress on real emissions reductions if we canned the ETS and spent those dollars on making all public transport free.

Clean and green for a start.

Fact: CO2 levels have been way higher historically pre industry and pre man
Fact: taxes will NEVER alter the climate
Fact: Greenpeace aren’t really interested in pollution, which they should be. When will they talk about vehicle emission standards here? Answer: never.

Fact - the C02 we are digging put of the ground, has been there longer than we have been around as a species. We grew in a habitat which didn't include it being in circulation.

Fact - yes, they can, but there are better ways to go about it because it's a systemic problem.

Fact - emission standards are pointless without restrictions on vehicle numbers. This is exactly my per-head comment.

Disagree with you on the first two, but so be it. As for vehicle emissions, I was referring to toxins, particulates and not CO2. One poorly maintained NZ vehicle that has a WoF can spew out more than 50+ vehicles that have to meet vehicle particulate emission standards in the EU and most other Western jurisdictions. I’d hardly deem this to be a “pointless” exercise, as I actually care about the air I breathe as opposed to the CO2. Greenpeace definitely don’t care about it judging by their perpetual silence on the matter.

T'isn't an agree or disagree issue. We are indeed digging carbon out of the ground, that has been there longer than our species has been around. Or are you a 4000-year creationist; dinosaurs, hanging-valleys and all? And if you tax something enough -and you've up to 100% available - you'll disincentivise it, alright.

Interestingly, modern diesel engines don't make the standards either: https://www.ft.com/content/9d052960-6903-11e8-b6eb-4acfcfb08c11

Greenpeace rightly are addressing things in sequential-importance proportion.

This article got me interested in what else contributes to methane, which lead me to an interesting fact: scientists believe 30% of the methane in the atmosphere comes from wetlands...so how is the government going to balance the ledger and make sure owners of wetlands share the cost along with owners of cows?

I notice the ozone hole is now the smallest its been in decades...probably because it is small most of the time....as for farmers and the ets...probably better to give them 5 years or the shock to their particular ecosystem might be a bit too severe...in the meantime just cut funding to their rural broadband programme in retaliation!