Farmers are already paying for ETS through fuel, electricity prices, PM Key says; Still not certain farmers will be included in 2015

Farmers are already paying towards the Emissions Trading Scheme via fuel and electricity prices, Prime Minister John Key says.

Key has attacked the Labour Party for announcing it would bring farmers under the scheme by 2013, instead of 2015, which has been penciled in by the National Party. By doing so would increase the prices of domestic dairy and meat products, Key said.

Labour leader Phil Goff hit back at Key’s claims, saying Fonterra executives told him domestic prices were set on international markets.

Key said this afternoon it was still not certain that farmers would come under the scheme even in 2015, unless other countries had made similar moves to tax agricultural emissions.

Key said the dairy industry’s position as New Zealand’s single biggest export earner was the reason for not hitting it with ETS costs, as they would work toward making the industry less competitive on international markets.

There was always the risk that domestic dairy prices would rise from 2015 if National were to bring agriculture under the ETS as planned, Key said.

“But what we’ve said though of course is that we’re going to review that, and there’s a review being undertaken at the moment. We’ve also put a caveat on that, saying we’ll only bring agriculture in if it’s consistent with what we see from other producers around the world,” Key said.

“At this point we’re not seeing a lot of movement in other countries. In fact if New Zealand was to come into the ETS for agriculture in 2013, we’d be the only country in the world doing that,” he said.

“It’s not guaranteed for two reasons. A) we’ve got the review, and we’ll...have that review to hand in the middle of July I think – late July. But also, [B)] we are very conscious of the international competitiveness of our [dairy] export sector.

“It’s our largest export earner, it counts for a lot of potential growth in the agricultural sector in New Zealand, and we think our farmers should be competitive,” Key said.

“We also think they are actually effectively paying via the ETS already. Farmers are large users of electricity, large users of petrol and diesel and the likes, so to argue that they’re not paying something towards emissions trading at the moment is just simply not correct,” he said.

'Farmers can't mitigate their emissions'

Asked whether it was fair households and other businesses had to pay under the ETS currently, Key replied: "We’ve got to look and see why we have an emissions trading scheme."

“For a start it’s to actually reduce emissions, and that means that someone can mitigate their emissions by doing something different," he said.

"If we simply just put another big fat tax on farming, then how can they actually mitigate their costs? Now, we think through petrol, diesel and electricity, they can work to be more efficient. But simply in terms of their output, well, it’s not easy for them to reduce their emissions, short of shooting productive animals. If that’s Labour’s policy, that’s an interesting policy, but I don’t think that’s right," he said.

Householders and other manufacturers had other options

“They can insulate their home, they can use another form of fuel, they can use energy saving devices," Key said.

“A farmer, if you’re going to put an emissions trading scheme on them for the emission of methane and nitrate gases that come from the burping and farting of animals, when there is no other option, that’s pretty tough on them. Now we’re working on nitrate inhibitors, we’re working aggressively through the Global Alliance in terms of trying to solve those issues. We’re working in terms of scientific research," he said.

“But the Labour Party is simply saying, ‘I’m going to put a big fat tax on farming early, and I’m going to use it to fund something else which is independent. And that’s actually not the right correlation, even if they could get their numbers right, and they haven’t done that.”

'Can't price NZ farmers out of the international market'

An emissions trading scheme added a cost onto productive activity. Key said.

“Now, we do that to try and send the right price signal. If we see that in terms of, let’s take electricity, putting a price on carbon makes sense, because we’re actually seeing new generation in the area of reknewable energy because it [the ETS] is pricing at an advantage renewables over fossil fuels which emit greater emissions," he said.

“So our point is simply: You can’t just add costs on the farm and not say that over time costs would rise to consumers – they have to.

“In the case of Fonterra at the moment, they’ve got a price cap when it comes to milk in New Zealand because they are making good profits on the international market. Taken to the extreme, ultimately if New Zealand [dairy] exporters, which are a large part of the [global] export markets eventually got priced out of the market, then global supply would reduce, and global prices would rise. Otherwise why can’t we put any old price on the farm?" Key said.

“From National’s perspective we’re simply saying we think we’ve got that balance about right. But the purpose of the review, and the purpose of having a caveat – that it’s got to be around ensuring that we don’t price our farmers out of the market, is to make sure that they’re internationally competitive,” he said.

(Updates with further comments.)

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?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

27 Comments

Our PM is on shaky ground there.

What the farmers pay for via fuel and power, is the carbon produced from driving the tractors and switching things on.

That's entirely separate from the methane issue.

We will probably never address climate change properly, maturely or actually. The ETS, and/or cap and trade, are all fiscal instruments, attempting to do the real. The assumption is that we need to continue BAU, and on that basis it must be pay-awayable.

Every time fiscal times get tight, there will be the holler "we need to get our economy (an apparently unquestioned noun) right first, then we'll......

So, given that 'economies', global average, are never coming back, nobody will do anything, and as things descend in a saw-tooth manner, ETS's will go out the window.

 

Yep...... The only Q is what the rise is going to be....

Have not seem anything that really joins up Peak oil theory ie allowing for the decline of oil output and hence carbon emisions and hence final Deg C rise.

3+ looks easy...so its a Q of just how much we can get at before we go toes up, Im kind of hoping its earlier otherwise if its 6Deg C our [great-]grandchildren and most species are so porked......

regards

Steven - there is a bit of linking, and it's all bad. It's not the oil, of which there will be around 1/2 left. It's the coal. It's more carbon intensive, and there's more of it, and you need to use more to get the same energy out. Lignite, of course, is worse, as are shale and tar-sands.

I don't think we will stop.

The only hope climate-wise, is that the fiscal system shudders to an unrevivable halt - which you and I know is more likely than anything else.

I went and heard Hansen last week (good scientist, useless orator) and the figures just keep getting fleshed-out. 2deg is inevitable, and the resultant refuee tide wipes us out. 4 deg, and you'd want to be wiped out anyway.

Yet there are turkeys both sides of the house still put growth first.

Go figure.

We are about 1/2 way on oil that is recoverable already I think....there is comment that the drop will be asymetrical, automaticearth seems to think thats quite probable and I agree, I think the good little capitalists wont go drilling unless there is a gun to their heads or huge subsidies so I suspect in terms of extracted oil we are past 1/2 of what will be ultimately extracted.

Ive been reading on coal recently its expected to peak as early as 2011 ie this year, in which case there is far less than anticipated....so ive not seen numbers.....what is so un-predictable is the usage post peak of both...in the past its tailed out, but thats because technology was improving and it was a per field/nation event and not global....so I wonder if it wont get down so far and just drop off vertically...

Hansen, Ive been listening to him on youtube....not a stuning orator, true but his talks are packed with info and quality. The deniers on the other side are a joke by comparison.

2Deg, yes. Refugee tide is worrying, of course most may not have access to energy to get here...but Im sure some will....just how 2 billion can fit on our island is going to be uh interesting......even if its just the pacific islands landing enmass that would be hard enough...just how do we stop them I wonder....

Reading that at 6Deg C its all over for us as a species, (are you now saying its 4?) and probably 90% of all species, DNA really f*cked up this time...still thats still quite a good % to recover with....they will have a long time super warm periods eventually receed....whats a few 100 million years to the planet.

What Im waiting for is the govn to start selling life raft tickets to the rich and famous....

regards

I don't think there's any diffo between 4 and 6 deg, the feedback loops look to me like they'd cover the gap.

Tundra thawing, for one.

You two bunker dwelling tin foil hat wearers (not you christov) do realise that before the last great ice age New Zealand was 5-6C warmer than it is today, don't you?

Human beings were already living on large parts of the planet by then too, you knew that as well, right?

Crikey Dick & Jane , Count , you've just mist out on another  " Bauble of Blogging " .......  Hang in there buddy , one day someone will throw an ad hominem at you , and all will be well ..... . Trust me , little one , Gummy knows it to be true ........

[ ...... exits left towards Bunker ,  with Euphinism of the Day award , and Tin Foil  Hat ..... ]

Can I interest you, Gummy, in this very stylish model? It also works well for the family cat! Just think of the look you’ll create as you sashay your way on the sun kissed beaches of the Philippines. You’ll be the talk of the town!

Peak oil, peak coal, peak growth, even Armageddon won’t get you!

http://sports.gunaxin.com/?attachment_id=38515

 

It is a sad story , the family cat , the boys BBQ'd  the ex-" Tiddles "  ........

....... I had Pippa Middleton in mind , when I  innocently said ,  " Hey you guys like to eat pussy too ? ....... "

 Even so  ,  the tin-foil hat is a classy look .... Hope PDK & steven like their's .

From "Boom-" to "Broom Economies" -  in 15 years.

David - following is the real issue (read full document):

Climate change presents an extraordinary threat to human security by exacerbating current economic, political and humanitarian stresses, eroding development gains, and potentially magnifying existing gender disparities.

Climate change will have severe implications on agriculture that relies on precipitation, affecting local cropping patterns – especially of staple crops – and international production and trade.

 http://home.wfp.org/stellent/groups/public/documents/resources/wfp213809.pdf

Science increasingly support the theory, that humans activities contribute to “Climate Change”

---

 The consequences of “Climate change” have the potential to bankrupt the world.

 http://www.swissre.com/rethinking/climate/the_effects_of_climate_change.html

 http://www.swissre.com/rethinking/climate/Weathering_climate_change.html

 

 

 

 A video, especially for all “Climate Change” deniers:

http://www.youtube.com/watch?v=zORv8wwiadQ

 

Walter : Got any videos for one who believes that the planet's climate does change , but who believes that is a naturally occurring thing , and nothing at all to do with mankind's activities and cow farts , and who likes to scarf bags of Gummy Bears ,  and whose hobbys include baiting Bernard Hickey and other left wing central government we-know-best control freaks ?

I suggest youtube and look up "head stuck in sand" or similar searches

regards

 

 

........... Hey , since when does  Spotless provide a secretarial service for the guys who mop out the public loos ?

Roger – you are obviously not able to watch the video, so please don’t make inappropriate comments then. Furthermore my article clearly says “Climate Change” is a natural event, with the increase likelihood of humans adding to the problem – affecting us and our economies badly etc.

Thankyou for the clarification , Walter . Clearly the video was never meant for me , because I am not a " climate change denier " . ............ Do you have one of porcine aeronautics for me to watch , instead ?

and the level of civilisation was?

regards

"Peak Coal"  I can see the Tui bill board already !

http://www.energybulletin.net/node/11901 

 

Peak oxygen , Ross ! ........ The world has limited supplies of oxygen . Simply , they're not making anymore of it . O2 molecules are in finite supply upon this planet .

...... Conserve oxygen today , by skipping every second or third breath . ... C'mon , it'll save on your CO2 emissions as well . Do your bit for NZ , and for the world-wide environment . Don't be a greedy right wing neo-liberal type denier . Save some oxygen for future generations .

Gummy has been practising , doing slow and deep breaths on the telephone , for several years now . It is easier than you think , and can be surprising fun too .

..... Get together , organise a conserve oxygen party at your place , and all breathe slowly , in unison . ....... Ahhhhhhhhhhhhh !

 

regards

Gummy, I'm a convert! We must take our message of protest to the people and the Govt. now. Before it’s too late! I've already made my placard.

 

STOP BREATHING OXYGEN NOW!

 

I'll see you on the streets!

plant more trees for more o2 Gummy.Of course we will need more co2 to "feed these trees"

but we already have that covered.no worries then

Peak coal and peak oil is about the maximum peak of production and not about how much there is.

regards

Goofy let the cat out of the bag . The ETS is a crock of shit , it is nothing to do with the environment , it is a new tax , pure and simple . And as ever , sock the farmers . Labour have learnt nothing since the electorate administered an arse kicking  to them in  2008 .

..... Clearly the Clark & Cullen hatred of business and of farming is still a theme within Labour .

As utterly pathetic as National is as a government , who'd go back to Labour ?

.... Key is rightfully clobbering Goofy . .... Sheer idiocy to link the R&D to the ETS .

No kidding! Ooh, look, the planet kept warming up even though I've been paying all this extra tax on my fuel and plastic shopping bags and food wrap etc etc. Ooh, look, the planet kept cooling down even though I've been paying all this extra tax on my fuel and plastic shopping bags and food wrap etc. etc.

 

Take your pick. We are being scammed. Again.

 

A farmer with ETS obligations could always retire their marginal land, put it into forest to earn credits to mitigate their emissions and help protect water-ways at the same time. Other emitters don't have that opportunity.

National is so stupidly pro-farming at the expense of the environment and other sectors of the economy, (e.g.the scutting of national standards for water quality) that they could easily lose my vote, if only there was a credible alternative.

The thing that really annoys me about climate change is that governments and other challenged-of-thinking types just see it as an opportunity to raise taxes. The ETS is a crock. It will not impact climate change. What is worse is that the unscientifically minded see the ETS for the crock it is and take it as a cue to assume climate change is not real. But if you can ignore the science and the data, how long can you ignore continued impact and increasing frequency of extreme weather events?  Climate change is a real issue that needs to be seriously addressed.