27 Oct 2015

Is it time to include farming in NZ's ETS?

8:21 am on 27 October 2015

Farmers could have to pay their way under a revised Emissions Trading Scheme (ETS).

The ETS is up for review, and official advice from the Ministry for the Environment to the government shows that the inclusion of agriculture is expected to be considered.

Organic Jersey cow on a Rongotea farm.

Farming produces most of New Zealand's methane and nitrous oxide emissions. Photo: RNZ / Alexander Robertson

The scheme, which is New Zealand's primary tool for addressing climate change, puts a price on emissions as an incentive to reduce them.

At the moment, agriculture is required to report its emissions but is not required to pay for them.

The country is still internationally liable for farming emissions but taxpayers as a whole pay for them, despite agriculture contributing nearly half of the country's greenhouse gases.

Carbon News editor Adelia Hallett said the inclusion of agriculture would be huge news and farmers have always steadfastly resisted it.

"It's been hugely political having agriculture in the Emissions Trading Scheme. When the scheme came in, in 2008 under the Labour government, agriculture was scheduled to come in as a sector by 2012," she said.

"The National government postponed that indefinitely but now it looks like officials are saying, look, we need to at least address this question."

The country's first state of the environment report in eight years, which was released last week, says methane and nitrous oxide concentrations have increased significantly since they were first measured in 1989 and 1996 respectively.

Methane and nitrous oxide are predominantly produced by farming.

Victoria University climate scientist James Renwick said, beyond actually reducing the intensity of farming, it would be hard to reduce animal emissions.

"There's not a convenient technology to hand that can be used to reduce emissions there, so I can understand from that point of view why agriculture wasn't included in the ETS, but given that it is half of our emissions it should be, an effort should be made."

The compounds were first tested in laboratory experiments in rumen fluid.

Several attempts to reduce emissions from agriculture are under way, including tests of methane-inhibiting compounds in rumen fluid (pictured). Photo: RNZ / Veronika Meduna

Federated Farmers national vice-president Anders Crofoot said agriculture was always going to be up for discussion in the review.

But he said it was tough to ask someone to pay for something they could not do anything about.

"Putting agriculture into the ETS at this point, especially when no other country in the world is doing it, is basically just putting New Zealand agriculture at a disadvantage," he said.

"Given that we export the vast majority of what we produce, it doesn't really make a whole lot of sense, and so that's where we actually think it makes a lot more sense to invest in doing R&D."

A Greenpeace climate campaigner, Simon Boxer, said the current ETS was a joke.

He said all industry sectors in New Zealand were having to think about how to reduce emissions and he did not see why agriculture should be exempt - especially when it was one of the country's largest emitters.

"We don't see why there should be any objection for farmers doing their bit and contributing like other sectors, and like the taxpayers and like energy consumers."

Green Party co-leader James Shaw said the whole scheme needed an overhaul, as it was failing to meet its primary objective of reducing emissions.

"The Emissions Trading Scheme as a whole is actually completely stuffed. A whole bunch of people who ought to have been paying haven't been," he said.

"The price of carbon has been so low it's actually been encouraging people to continue to pollute."

Ms Hallett said, if agriculture was included in the scheme, it would push up the price of the units used to pay for emissions.

"It would create more demand. We've now got limited supply, we can't bring in units from overseas anymore - the only units we can use are the domestic ones. That would increase the demand, which would [put] pressure on price."

The official document shows that a continuation of the current one-for-two surrender system - where those obliged to pay for emissions pay one emission unit for every two tonnes, instead of every tonne - is also being considered.

The review is expected to get under way by the end of this year.

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