Emission scheme needs beef

Over the next few months we'll know what sort of emissions trading scheme we'll end up with. Judging by the review process so far by parliament and government, it will be light and easy. If it is, it will fail reports Business Day. It will discourage emitters from investing in new and better technology, leaving taxpayers to pick up the tab for buying international credits to cover our ever-growing greenhouse gas liabilities. The impact will be far greater than simply a taxpayer subsidy of inefficient industry. We will have no credibility in December's Copenhagen negotiations on a post-2012 climate change treaty. Crucially, we won't help drive the agenda on agricultural emissions, which account for half our profile, in the same lead-by-example way we have long done with agricultural trade. The concept is simple: those agricultural emissions are, in large part, a waste of nutrients. Current farming practices spill carbon and nitrogen into air, soil and water. But better breeding and management of ruminant animals and their feed, combined with recycling of those nutrients on-farm, would increase the output, reduce the costs and improve the environment. Producing a litre of milk generates greenhouse gases equivalent to 940g of carbon dioxide, Fonterra has determined in its recently released carbon life-cycle analysis. Around 85% of the gases are emitted on farm, 10% downstream in manufacturing and 5% in distribution of the finished products. Virtually every farmer sees those emissions as a liability. They argue they cannot change their farming practices. So if they were charged for those liabilities in an emissions trading scheme they would become less competitive internationally. Fonterra is slightly more enlightened through its commitment to the carbon life cycle analysis developed by AgResearch, Scion (the forestry Crown Research Institute) and the University of New South Wales and funded in part by the Ministry of Agriculture. Once farmers realise greenhouse gases are a wasted source of nutrients, they take steps to capture and use them. Thus, for example, they are rapidly adopting nitrogen inhibitors to keep nitrous oxide in their pastures rather than leaking out into the air and waterways. The grasses take up the nitrogen, thereby reducing the use and cost of fertilisers. Dairy farmers are focusing ever more intently on such issues because they are having to farm much more intensively. They are, for example, using much more supplemental feed such as maize and palm kernel extract to improve the diet and thus milk production of their cows. There is growing evidence that such changes of diet can decrease cows' methane emissions, the biggest and most difficult to curtail of agriculture's greenhouse gases. By adapting their management systems further, farmers can, for example, collect effluent the cows produce when they're on feed and standoff pads. The effluent is then used to fertilise pasture grasses or crops such as maize, which have much higher nutritional value than grasses.