James Shaw has been given much credit for setting the foundations for enduring climate policy. An independent expert Climate Commission would steer the ship and the Government legally bound by the revised Climate Change Response act, would enact the policies required to transform New Zealand painlessly and effortlessly into a carbon neutral happy prosperous green society.
The weakness of Shaw’s foundations and the nativity of the concept on which they are based, have just been exposed by a Climate Commission report which has torpedoed the Government’s plans to price livestock biological emissions.
The Climate Change Response Act requires biological emissions from agriculture to be priced in the ETS from January 2025.
The Government agreed to consider an alternative pricing proposal to the ETS called He Waka Eke Noa (HWEN). They agreed to this because the ETS uses a carbon accounting system which overstates the impact of methane emissions from livestock by at least 400% if not more. The ETS is also incompatible with the split gas approach the Government adopted for long and short-lived gases to allow a different carbon accounting system than that used in the ETS.
Farmers were not particularly thrilled with what HWEN proposed, even though it was supposedly a primary sector initiative, because while it did not perpetuate the mistake the ETS makes in overstating the impact of methane, it still proposed taxing emissions of methane that according to the Government and the Climate Commission are not causing any warming. Methane is a cyclical and short-lived gas and so when emissions are stable, as they are in New Zealand, they just go to and from the atmosphere without increasing any concentration of atmospheric greenhouse gas.
It was the threat of being put in the ETS, which would be worse for farmers than HWEN, that forced farmers to reluctantly and conditionally support HWEN, despite its unfairness. It looked like James Shaw would have a famous victory and get farmer support for pricing emissions.
Then along came the independent and expert Climate Commission to torpedo the dream. The Commission does not want HWEN adopted without significant changes that would make it unpalatable to farmers because it removes their ability to get credits for on farm vegetation. This pretty much rules out HWEN because it would be a brave government that went against the independent and expert advice of the Commission and adopted a scheme in a form it advised it not to, and the modifications the Commission want would mean it loses the farmer support it needs.
With biological emissions having to be priced by 2025 and HWEN ruled out this would have forced the Government to impose the ETS on farmers had it not been for the fact that the independent and expert Climate Commission has ruled that out too.
The Climate Commission said that to be effective at reducing emissions, farm emission pricing in the ETS needed to be at farm level, not processor level, and this was unworkable. Among the reasons the ETS would be unworkable was that it would require twenty thousand farmers or more to be in the carbon market buying and selling credits and the market could not cope with that. This was something our dim-witted parliamentarians obviously overlooked in 2008 when they voted for an ETS that was supposed to be all gases all sectors but clearly was not fit for that purpose.
With no HWEN and no ETS the Government is left with nothing and James Shaw’s plan to price emissions by 2025 is in tatters.
This is an opportunity for farmers to step up and achieve what a parliament that is clearly out of its depth has failed to do. Parliaments since 2002 have made a mess of livestock emissions. They adopted a carbon accounting system that overstates the impact of livestock emissions by a ridiculous amount, they enacted an ETS that was not fit for purpose, and they adopted a split gas approach and set an emission reduction target of net zero without any concept or understanding of what net zero really means when it comes to livestock emissions of methane in a split gas system. They are akin to imbeciles, out of their depth and they just make matters worse with everything they do.
HWEN was a dog of a scheme because it had to be acceptable to an incompetent government with an anti-farmer constituency which had the upper hand by being able to threaten farmers with the ETS. With the ETS ruled out that threat is gone, and farmers now have the upper hand because the Government needs to salvage something.
Farmers should take the lead and devise a scheme that has as its primary purpose the reduction of livestock emissions. HWEN and the ETS were schemes devised primarily to price emissions, not reduce them and that is their limitation. The politicians either just assumed that if you priced emissions they would reduce, or they were ideologically blinded to the fact that there could be other mechanisms. In fact, fourteen years of increasing emissions that are priced in the ETS is proof that pricing does nothing more than make people poorer.
A scheme that was farmer led and recognises that these livestock emissions of methane are not causing warming themselves and only need to reduce to offset CO2 emissions; and had as its primary purpose the reduction of emissions that did not cause any reduction in New Zealand’s agricultural output and considered all mechanisms, not just pricing, will achieve far more than anything any New Zealand government has been able to do.
Robin Grieve, agricultural tutor, orchardist and retired farmer, is Chairman of FARM (Facts About Ruminant Methane) and Pastural Farming Climate Research Inc.