Climate Change Minister James Shaw

A political scare that appears to have originated from the farmer-protest group Groundswell has fallen flat on its face.

Groundswell emissions spokesperson, Steve Cranston, has claimed that the Government is about to withdraw its support for a farmer-designed greenhouse gas emissions levy package.

Groundswell has campaigned against the package, which has pitted it on the opposite side to National.

But both the Climate Change Minister James Shaw and the Programme Director for He Waka Eke Noa, Kelly Foster, say the claims are rubbish.

Nevertheless, in the process,  Cranston has raised a key point about how farmers will pay for their emissions and highlighted divisions within farming over how to proceed on climate change..

Cranston may not realise it, but he is in danger of playing right into the hands of Greenpeace and the more radical members of the Greens.

Critics like Greenpeace have called on the Government to walk away from the agriculture industry proposal, He Waka Eke Noa.

This would allow farmers to declare their annual greenhouse gas emissions by way of a Farm Environmental Plan and then pay a levy on those emissions.

Shaw has been regarded with suspicion by Greenpeace for some time, but he is also under pressure from his own Green MPs to take a tougher stance on farm emissions than He Waka Eke Noa is proposing.

Green MP, Teanau Tuiono, said last year that it was time to change New Zealand’s outdated model of industrialised agriculture and instead reduce stock numbers and commit to regenerative agriculture.

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Tuono has been a critic of Shaw’s leadership and considered standing against him during last month’s Greens leadership wrangle.

Cranston told NewstalkZB that Shaw did not have faith in the Waka Eke Noa and was working on a new proposal “from the ground up”.

He said  there had  been more and more pushback from the rural community “and not just towards the government, but also to our own industry leadership.”

Groundswell, who are aligned with the right-wing Taxpayers’ Union, have taken a Trump-like stance against the two major agriculture industry bodies, Beef and Lamb NZ and Dairy NZ, accusing them of being out of touch with farmers.

“I think they’re starting to realise that the writing’s on the wall and that farmers are never going to buy into this long term,” said Cranston.

He has called on farmers to refuse to co-operate with the Government by not supplying the farm environmental data, which would be used to calculate that farmer’s greenhouse gas liability.

But Groundswell’s campaign against He Waka Heke Noa points to bigger political tensions within the rural community, particularly in the South Island.

National is often regarded as the farmers’ party, and it is ignoring the Groundswell threat.

It supports He Waka Eke Noa. Leader Christopher Luxon says he is a “big fan” of the proposal.

ACT’s agriculture spokesman, Mark Cameron, on the other hand, does not support the proposal and has said ACT does not support the inclusion of agriculture into any emissions pricing scheme.

Cranston claims that the Government will replace the Waka Eke Noa with a “cap and trade” scheme for agriculture.

Though no decisions have obviously been made, it would appear that such a scheme might be being considered alongside He Waka Eke Noa.

A cap and trade scheme – like the Emissions Trading Scheme — requires each emitter to purchase units to allow a specific quantity of greenhouse gases to be emitted.

Emissions units can be traded.

But the Government can influence the trading price by controlling the number of units in the market.

To reduce emissions, the Government simply reduces the number of units, thus forcing up their price.

Shaw’s party, the Greens, seem likely to prefer a cap and trade proposal.

Tuono said in June that the number one priority had to be reducing emissions to meet the targets and ensure a safe climate for future generations, “but it’s not clear if or how the sector’s proposal will do that.”

Shaw was non-committal yesterday when asked whether a cap and trade proposal was being considered.

“It’s too early to say where things are going to land,” he said.

“We’re in a process right now, which is considering the reports that we’ve been given and official advice, and we’re still receiving advice.

“I don’t want to end-run where things land.

“I think it’s really important to say, though, that we’re continuing to talk with the sector as we go through that process.”

But Kelly Foster said the proposal put forward under the Waka Eke Noa would provide an incentive to reduce emissions.

Farmers would calculate their methane emissions separately from their nitrous oxide and carbon dioxide emissions and pay a levy on each.

“The incentive to reduce is through the levy price,” she said.

She said there were two ways that could be used; one, as He Waka Eke Noa has proposed, would see the Government set the price (the levy), and the alternative would be that the Government set the quantum of units available to farmers. (The cap and trade system).

“We do think that there is a set of prices that can deliver emission reductions in line with targets, and we’ve put that in our modelling; we do think it’s a better approach than setting a quantum and allocating units within that.”

She  (like Shaw) said the Government had not made any decisions on which approach it favoured.

“I do know that they are exploring a few different options,” she said.

“And they’ve come, they’ve come to us and asked some questions about why we’ve proceeded with them and why we haven’t proceeded with them.

“But I  think that that doesn’t amount to them proposing something or thinking that’s not something we take forward.”

Foster’s account sounds like a pretty typical account of a Government decision-making process – exploring options and ultimately deciding on one.

But asking questions about a hypothetical option does not, as Groundswell is trying to claim, amount to the Government having made a final decision.