Climate Change Minister James Shaw launching the Government's Emissions Reduction Plan in May

As the Government sends out  Minister Kieran McAnulty to try and calm provincial New Zealand over Three Waters, the Climate Change Commission yesterday further complicated the debate over how farmers should pay for their greenhouse gas emissions.

Last night Climate Change Minister James Shaw appeared gun shy and was unwilling to add anything to his joint written media statement with Damien O’Connor from earlier in the day.

The Government is obviously worried the whole row could easily end up in the courts.

Alternatively, it could further inflame the provincial protests being driven by the Taxpayers’ Union and Groundswell.

And caution is now so much the watchword on this that POLITIK understands the Government is now planning another round of consultation on the final shape of the scheme before the end of the year when they must make a decision.

.At the heart of the debate is the He Waka Eke Noa partnership of 13 agricultural organisations and their proposal that farmers pay a levy on their greenhouse gases — methane and nitrous oxide —  based on individual environmental plans for each farm.

The levy would be able to be reduced by “sequestration”, or the planting of trees on farms to capture atmospheric carbon.

In its advice to the Government, made public yesterday, the Commission says farmers are likely to be ready to price the emissions off their farms by 2025.

Their report provides an important endorsement of the He Waka Eke Noa proposal.

“A detailed farm-level pricing system outside the NZ ETS is the best approach to pricing agricultural emissions in the long term.,” it says.


But the Commission does not believe that farmers will be ready to go much further than simply calculating their Greenhouse Gas (GHG) emissions.

“A detailed farm-level system would recognise and reward the widest range of mitigation actions and give farmers a greater choice about how to respond to price signals in the way that makes the most sense for their business,” the report says.

“However, the sector would not be ready for a detailed system by 2025, and it is important that pricing agricultural emissions is not delayed.

“Any delay will make it less likely that Aotearoa New Zealand will meet its climate targets.

“In the interim, a basic farm-level system using elements of the He Waka Eke Noa proposal as a stepping stone will provide a path to progress towards a more mature, responsive and effective system.”

So the Commission proposes that the basic pricing model stays the same but that the pricing of fertiliser nitrogen (which contributes to nitrous oxide) be done at the importer-supplier level using the Emissions Trading Scheme.

But their most potentially controversial is the Commission’s conclusion that Government should avoid including sequestration in an agricultural emissions pricing system.

The Commission is obviously aware of the political backlash from farmers they may get over this. Farmers want a “carrot and stick” approach to emissions and see concessions for planting for sequestration as a “carrot”.

But the Commission says: “We recognise including sequestration is important for farmer buy-in, but it introduces significant administrative cost and creates significant inequity between farmers and non-farmers without improving emissions reduction outcomes.

“Not including sequestration may push against the principle of “broadly supported” by the agriculture sector, but this is outweighed by alignment with the principles of “practical”, “effective”, “equitable”, “efficient” and “well-aligned”.”

Beef and Lamb NZ chair  Andrew Morrison yesterday pointed to the fragility of the farmer support for He Waka Eke Noa and warned that could be endangered by not allowing a credit for sequestration.

“It’s important to stress, the cross-sector agreement is finely balanced and required significant negotiation and compromise from all 13 partners, to ensure we could all support the final recommendations,” he said.

“On that basis, we urge the Government to accept our proposal without changes to continue that cross-sector support.

“Our farmers have told us that if priced for emissions, they should get proper recognition for the genuine sequestration on their farms.

“Some farms have fewer tools to reduce emissions and are going to rely on sequestration.

“Sequestration was a foundation of the He Waka Eke Noa partnership with Government, and it is imperative it remains so.”

Like Shaw, Agriculture Minister Damien O’Connor was careful to give nothing away in their joint statement on the Commission’s proposals.

“We will consider the Commission’s advice alongside the He Waka Eke Noa partnership recommendations and further analysis and advice from officials before developing proposals on what the system will look like,” he said.

But the Greens’ agricultuire spokesperson, Teanau Tuono, was a little more specific.

“Over the next eight years, we have to reduce our biogenic methane emissions by at least ten per cent compared to what they were in 2017,” he said.

“The fact is, most of those emission reductions will have to come from changing the way we farm.

“While many farmers and growers are already doing the right thing for the climate, time is running out. 

“The decision Cabinet has to take before the end of the year about how it intends to implement an emissions pricing system will shape the future of farming for many years to come.

“ If Cabinet gets it right, we will have a huge opportunity ahead of us to transform Aotearoa New Zealand’s farming sector from being one of the biggest impacts on our climate into one of its biggest solutions.”

And if Cabinet gets it wrong, then it will have ended up empowering the Taxpayers’ Union and Groundswell at the expense of the traditional farmer organisations including Federated Farmers, DairyNZ and Beef and LambNZ.