Editorial: Taking time over farm emissions pricing

Farming is a problem for New Zealand's emissions profile, but is also important for the country's GDP and future food needs. Photo / Brett Phibbs file

Negotiations on agriculture’s role in global warming are travelling at the slow and deliberate pace of trade pact talks.

It’s the coffee-and-club-sandwiches-at-endless-meetings approach to making progress.

Unusually for the pre-Christmas week, the Government reported an update to its plan, which followed a submission period, after a document came out in October, following consultations. More talks are to follow.

What is clear is the Government is going for a very minimalist levy scheme for agriculture to encourage emissions reduction from the sector. The announcement said, soothingly for farmers, that pricing would “be set at lowest price possible to achieve outcomes”. The Climate Change Commission had advised that behavioural change be linked to the rising price of carbon.

Kid-gloves treatment of farming frustrates climate activists, because the agricultural sector makes up half of New Zealand’s gross greenhouse gas emissions. There’s also broad public support for stronger action on climate.

The Government is trying to get industry buy-in on a emissions levy by 2025. Farm emissions would be priced outside the Emissions Trading Scheme.

Methane accounted for 43.5 per cent of New Zealand’s gross greenhouse gas emissions in 2020, with nearly 89 per cent produced by livestock. Carbon dioxide was 43.7 per cent of the total, with transport at 38 per cent contributing the most. Overall, agriculture produced 50 per cent and energy 40 per cent of gross emissions in 2020.

The bottomline is a need to cut pollution. So why take such a mild approach on agriculture lacking a sense of urgency? This country is not the only one more immediately focused on transport and renewables than farming. Ireland last week updated its climate plan which emphasised incentives for farmers.

From a political point of view, a more low-key scheme that’s been sent to the room of back-and-forth discussions simply takes the air out of the issue for election year.

New Zealand also relies a lot on trade for wealth generation. Export revenue for food and fibre is forecast to reach $55 billion in the year to June 30, 2023, according to the Ministry for Primary Industries.

Long-term strategy for New Zealand does need to take into account the global picture of how climate change - through environmental damage and competition for resources - will affect food production in the years ahead. Countries will try to lock in food supplies.

Natural disasters and conflicts combined this year to cause famine, supply shortages, and food and fuel inflation. The number of food-insecure people in the world increased by about 120 million. The conflict between Ukraine and Russia involves two of the world’s major grain hubs. This year food production has suffered in the wealthiest of countries.

The past five years have been the hottest period in recorded history in New Zealand. But the country enters the next few decades of warming from a mild temperature base. It will be better placed than many other countries to maintain high levels of food production, even if the types of goods change.

Global warming will bring new trade patterns, overseas supply shocks, changes to how goods are produced, and attempts to limit the damage from floods and droughts.

New Zealand’s resilience has to be enough to ensure it can cope with what’s coming.

Agriculture has to be a clear part of the country’s work to cut emissions and meet targets: Aside from the practical benefits of that, it’s essential for the country’s reputation and trade.