For sheep & beef farmers, the tradeoffs needed to meet tighter GHG regulation are becoming clearer. If methane is out of the basic equation, less than 10% planted in trees could mop up all liable emissions

The conversation around meeting a zero-carbon environment for New Zealand by 2015 appears to be warming up. Climate Change Minister James Shaw started the conversation announcing last week a six-week consultation period leading up to the parliamentary process and a likely Act by 2019.

With the likelihood agriculture will be coming under the Act it is worthwhile having a look again at what this may mean for livestock farmers.

Currently the New Zealand traded carbon credit is worth around $20.50 average (and there is a huge diversity around 'average' for sheep or beef farms).

New Zealand sheep and beef farms produce approximately four tonnes of greenhouse gases per hectare per year. On the face of it this would mean the average hectare would attract about $80 per year of GHG liabilities.

The vast majority of this is made up of Methane (CH4) and Nitrous Oxide (N2O). Of the livestock emissions methane makes up around 60%. (This could get up to 70% depending upon livestock systems.)

Given the discussions the other week that if methane is omitted from the calculations, and there appears to be the likelihood the government may accept this argument even if international bodies choose not to, the liability per hectare reduces to around $32 per hectare.

When the program does come into force the price of carbon is likely to rise, even if only for a few years until mitigating techniques are instigated; however not to the giddy heights some have been predicting but more likely $25-$30 per tonne of CO2.

Some farmers believe that by increasing pasture production, the humus content of soils (and hence the soil carbon content) will increase to outweigh methane or nitrous oxide emissions completely. If true, even small increases in soil carbon over time could strongly impact on our national carbon budget, because nearly half (13.61 million hectares) of usable land in New Zealand is used for livestock farming.

However, research being conducted by Landcare Research shows that soil carbon levels in New Zealand's grazing lands are at or near steady state.

The main form of mitigation for sheep and beef farms is likely to be in the form of tree plantings. Trees are not a permanent solution unless they replace all livestock (and let’s not go there) but pine trees for instance can sequester up to 50 years and other slower growing species far longer, especially natives. A hectare of pine trees for instance can sequester on average over a 30 year period between 19 and 29 tonnes per year per year depending upon the region.

So, with the methane out of the equation it means for an average 300 hectare farm 29 hectares of trees should be able to mop up all liable emissions, regardless of what the cost is.

For many hill country farms this will benefit the environment. For others it may be seen as a sacrifice, however depending upon the cost of carbon it may prove to be a useful income source.

Dairy farmers with an average of nearly 11 tonnes (Pre-Methane reductions) of GHG have a greater problem with less means to reduce. The big message to all is to keep the pressure on to keep livestock methane out of any National equations.

Following on from this the next big question will be how will be GHG’s be measured; maybe a simplistic trade off will be methane for a generic stock unit-based equation? Works for me.

MARKETS

Regarding the markets; things are quietening down somewhat on all fronts in the saleyards, North and South Islands, although prices are still healthy. Good news is schedules have held with some small lifts for cow down South.

Wool has stopped the elevator ride up and is now in a holding mode. And venison still the glamour girl.

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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11 Comments

Should start by subtracting off the carbon content of the equivalent CO2 absorbed by grasslands to produce the methane.

Seems incredible that we are on track to borrow to fund emissions that are greater than actually exist.

The recent work seeing methane as a flow not stock would address the current calculations - Let's hope the ignoring methane option is adopted.

Next step is to subtract the carbon content of the millions of tons of our agricultural and horticultural exports which has been extracted from the atmosphere.

Norway is not responsible for it's export gas emissions, Australia its export coal emissions and neither are we responsible for any subsequent agricultural consumption emissions.

Then we need to accurately reduce our carbon emissions captured in the soil as dung.

Cumulatively we are talking very significant quantities of CO2 removal not currently counted.

I don't (directly) pay for carbon emissions when i consume electricity, yet the burning of diesel gas and coal produce emissions. Likewise Norway doesn't pay for extraction of oil and gas.

I don't pay for carbon emissions when i drink milk, yet the animals produce emissions. Likewise Indonesia/Malaysia doesn't pay for extracting the palm kernel that is turned into co2/methane.

In both cases it's the activity that produces the emissions that pays.

End consumers still pay the tax but it's indirect like every other cost of production.

Trying to tax a proxy for emissions, like palm kernel or oil extraction is fraught with difficulty and can lead to perverse incentives. What happens to the carbon tax Norway has paid if a UK power plant employs carbon capture technology. What rate should Indonesia pay for palm kernel when it has such a diverse set of uses?

10% sequestration, assuming stocking rates per hectare stay the same, means 90% of previous production as well....unless the forestry is bundled with financing which assures a near-constant annual return, and unless that return is roughly equivalent to the S&B income thus foregone..

Aside from the carbon stuff, has anyone else noticed how cheap beef is in the supermarket? I was in this morning and New World had Silver Fern Farms, Rump steak at $12.99 a kg. Selling 5.79 kg packs at $75.00. It's been like that for a couple of weeks now.

My mates in California had a big fathers day party and got some NZ lamb (just to remember me) Costco were selling back legs at $5 US a lb, boned. Thats sounds far too cheap to me.

Wait on a moment the grazing stock are eating grass and crops that are capturing carbon from the atmosphere and growing from that carbon then some is lost from methane and CO2 so where is the production of GHG that is additional to what is already going through this process and NOT adding to the atmosphere.

Zeebeck - depends what you count, and who ducks paying.

But there's a lot of fossil energy burnt to provide food - we'd probably be more efficient working out how to eat the oil straight.
https://www.mepartnership.org/counting-calories-

"So, with the methane out of the equation it means for an average 300 hectare farm 29 hectares of trees should be able to mop up all liable emissions, regardless of what the cost is."

Yes, but only for 30 years & then another 29 hectares has to be planted.

"When the program does come into force the price of carbon is likely to rise, even if only for a few years until mitigating techniques are instigated; however not to the giddy heights some have been predicting but more likely $25-$30 per tonne of CO2."

Yes initially, but over the long term carbon prices are expected to increase substantially into the $100's per tonne.

NZ also faces huge threats from synthetic meats.

Better to gradually transition NZ agriculture into ETS pricing and then let the market decide how resources should be allocated.

" Yes, but only for 30 years & then another 29 hectares has to be planted. " ….

Not true - after the initial harvest the sawn timber and byproducts eg MDF, LVL, Plywoods produced will be locked up in housing for many years then eventually when the house is knocked down taken to landfill so permanently removing the CO2 absorbed from the atmosphere.

Alternatively the logs can be exported thus removing any liability for NZ's emissions.

The same area can then be replanted and the growth / harvest / store regime repeated.

"will be locked up in housing for many years " - yes but not permanently, which is what is required

"then taken to landfill so permanently removing the CO2" - also not true - landfills leak methane as organic material breaks down.

The wood would have to be permanently buried. Perhaps in an ocean trench subduction zone - throw enough timber at it & we might produce oil again in a few million years.

Carbon Sequestration has never happened on any scale. The reason is simple - it takes too much energy to do.