NZCPR Newsletter: Labour Plans an Act of ‘Mega Stupidity’

It seems inconceivable that at a time of hyper-inflation and global unrest, any government would deliberately destabilise the agricultural sector by introducing policies that would increase costs to primary producers, reduce production, and fuel price increases. Yet that’s what Jacinda Ardern’s Labour Government is planning to do.

And how are they justifying these radical changes?

Our Prime Minister, as the poster child of modern-day socialism, wants to once again boast on the world stage that she’s taking the lead in climate policy - this time by introducing a price on agricultural emissions of greenhouse gases.

No doubt next month’s climate change COP27 talkfest, where tens of thousands of climate activists from all over the world will fly to Egypt to talk about cutting emissions and saving the planet, will provide just such an opportunity. 

That our Prime Minister wants the owners of ruminant livestock to pay a penalty for a by-product of a digestive process that is older than the dinosaurs, is madness personified.

Methane, an atmospheric trace gas, is part of an ancient natural cycle. Plants absorb carbon dioxide and using the green chlorophyll in their leaves combine it with water to trap the sun’s energy as food. When plant matter is eaten by ruminants, methane is produced, which breaks down into carbon dioxide and water vapour to continue the cycle.

Over three-quarters of the planet’s methane comes from natural sources such as wetlands, with the balance produced by landfills, rice paddies, and livestock. Since New Zealand has only one percent of the world’s farmed ruminants the actual contribution of Kiwi livestock to methane in the atmosphere is almost too small to measure. 

On October 11 the Prime Minister held a press conference to announce her plan to reduce agricultural emissions:

“This is an important step forward in New Zealand’s transition to a low emissions future and delivers on our promise to price agriculture emissions from 2025. The proposal would see New Zealand farmers lead the world in reducing emissions, delivering a competitive advantage and enhancing our export brand.

“No other country in the world has yet developed a system for pricing and reducing agricultural emissions, so our farmers are set to benefit from being first movers. Cutting emissions will help New Zealand farmers to not only be the best in the world but the best for the world; gaining a price premium for climate friendly agricultural products while also helping to boost export earnings.

“We’re committed to building a system that works for farmers. We will continue to work in partnership to drive as much consensus as possible to ensure we have a system that lasts the distance.”

With those lofty words, the Prime Minister signalled her intention to tax the agricultural sector so heavily that by 2030 an estimated 20 percent of sheep and beef farmers and 5 percent of dairy farmers will be forced out of business.

Agriculture is New Zealand’s biggest industry, generating more than 70 percent of our export earnings and about 12 percent of our gross domestic product.

The impact of Jacinda Ardern’s tax on the sector will be significant. Prices of home-grown protein - including milk, cheese, and meat - will undoubtedly rise as local production falls. And our crucial export returns will decline - by up to an estimated 5.9 percent for dairy, 21.4 percent for lamb, 36.7 percent for beef, and 21.1 percent for wool.

We can see the potential fallout by reminding ourselves of the consequences of a previous reckless decision by our Prime Minister when, without warning, she banned new offshore oil and gas exploration on the eve of a meeting of world leaders - so she could boast about her decisive climate change leadership.

That decision contributed to the closure of the Marsden Point Oil Refinery - with a loss of 240 local jobs and many hundreds more indirectly - leaving New Zealand dependent on imported fuel that we used to produce ourselves.

Paradoxically, the PM’s actions did not reduce greenhouse gas emissions, but increased them - as the Taranaki based methanol producer Methanex explained:

“Over half of methanol production globally is produced from coal, which has an emissions profile of 5x that of natural gas-based methanol. Methanex New Zealand production, and in fact all Methanex’s global production, is natural gas based. Due to the lack of New Zealand supply and the outlook because of the ban on new offshore permits, Methanex was forced to make a decision to shut down the Waitara Valley facility. This has increased global emissions as the marginal industry supply is coal-based methanol production from China. This shutdown therefore runs directly counter to New Zealand’s stated policy of reducing global emissions.”

The Waitara Valley closure led to the loss of seventy-five local jobs, and many more downstream.

There are very real concerns about the fallout from Jacinda Ardern’s radical plan to tax livestock emissions without allowing farmers to balance their ledger by claiming credits for sequestering carbon dioxide through the plant matter on their farms - including woodlots, shelter belts, riparian planting, native bush, crops, and, of course, pasture.

As a result, the policy will have profound and widespread consequences, far beyond the damage to those farmers who are expected to be forced out of the industry.

Many of their farms are likely to end up in the hands of those seeking land for carbon farming. If that happens, not only will the soil be ruined for future pastoral use, but the resilience of our rural and provincial communities will be undermined through the loss of farming families and the downstream jobs they helped to sustain. Their departure will impact heavily on farm services, meat processing plants, local schools, and the other local businesses.

What’s even more irrational is that the forced exit of the world’s most emission-efficient farmers will increase global emissions as other less efficient nations increase production to fill the gap.

Quite frankly the policy is absurd and more so given our Prime Minister is forcing this tax onto our productive sector at a time when almost 200 coal-fired power stations are under construction in Asia. In fact, the world’s major emitters of China and India have already admitted they are not planning to take serious action on reducing emissions for up to fifty years, as they prioritise the economic wellbeing of their nations by expanding essential electricity supplies.

Given that a day’s worth of their increased emissions will totally swamp a year’s worth of the reductions the PM is planning to impose on our agricultural base, one has to wonder about the sanity of our decision-makers.

Surely common sense should prevail. Firstly, no New Zealand government should even consider dangerous Armageddon-style policies that will fundamentally disrupt the industries that have created our nation’s wealth. And secondly, all climate policies should be put on hold until the main emitters begin to curb their emissions.

This week’s NZCPR Guest Commentor, agricultural researcher Robin Grieve - the Chairman of FARM (Facts About Ruminant Methane) and Pastural Farming Climate Research - is appalled at the Government’s plan to tax livestock emissions:

“The Government has released its plan to tax farmers for their livestock emissions. ‘World First’ rang the headlines as journalists celebrated New Zealand becoming the first country to price these emissions. Announcing that we are the first or world leading, implies others will follow but that is unlikely. Why would they be so silly? Most countries don’t regard shooting yourself in the foot as a good idea.”

Robin is absolutely right. Destroying our economy to fulfil the goals of environmental fanatics who want to take humanity back to the stone age, is madness.

“With farmers not able to take any useful actions to reduce emissions and avoid the tax, the Government’s scheme is only going to achieve emission reductions by increasing farm costs and pushing a percentage of farmers out of business. Not only is this cruel, but it is also in contravention of the Paris Agreement which ruled out emission reductions that reduce food production. The UN is acutely aware that previous climate policy initiatives, such as pushing biofuel use, resulted in mass starvation as food producing land was diverted to producing fuel. This was described by one UN committee as the greatest crime against humanity ever. Pushing New Zealand farmland out of food production and into forestry is the same thing.”

Robin highlights a very important point.

So as not to create food shortages through its international drive to reduce man-made greenhouse gas emissions, the United Nations specifically included Article 2 in the Paris Agreement, which requires policymakers to develop emission-reduction schemes “in a manner that does not threaten food production”.

This specifically excludes schemes that would penalise agricultural production.

Given the mayhem Jacinda Ardern’s policy will create, surely ignoring this specific UN directive is not an option.

Federated Farmers Chairman Andrew Hoggard believes her plan will  “rip the guts out of small town New Zealand, putting trees where farms used to be.”

He explains that the agricultural industry worked for two and a half years on a proposal which would honour the Paris Agreement by not reducing food production, but the Government then changed the rules: “It’s gut-wrenching to think we now have this proposal from government which rips the heart out of the work we did. Out of the families who farm this land. Our plan was to keep farmers farming. Now they’ll be selling up so fast you won’t even hear the dogs barking on the back of the ute as they drive off.”

He says, “Some overseas buyer can plant trees and take the carbon cash. The government’s plan means the small towns, like Wairoa, Pahiatua, Taumaranui - pretty much the whole of the East Coast and central North Island and a good chunk of the top of the South - will be surrounded by pine trees… So all the small town cafes, car yards, schools, pubs, rugby clubs, hairdressers and supermarkets can say goodbye to business supported by the agriculture around them.”

The ideological madness coming out of the Beehive should not be allowed to continue. No-one should accept it. Leaders in the rural industry should be  sending a message to the Prime Minister that she is breaching the Paris Agreement. They should demand that the policy is dropped and increase the volume of their protest for as long as the government continues to ignore them. Rural service communities should also be outraged - and vocal - and not rely on the opposition parties alone to call out this political extremism.  

Clearly our Prime Minister has learnt nothing from the recent similarly ideological policy failure in Sri Lanka.

UK author and politician Matt Ridley has described what happened there: “Sri Lanka’s collapse, from one of the fastest growing Asian economies to a political, economic and humanitarian horror show, seems to have taken everybody by surprise.”

It turns out that their president in 2021 announced his country would go organic - no doubt, ‘to lead the world’. As a result, the use of synthetic pesticides and fertilisers was banned, amid claims that this “decision will definitely help farmers become more prosperous.”

But at Matt explains, “Within months, the volume of tea exports had halved, cutting foreign exchange earnings. Rice yields plummeted leading to an unprecedented requirement to import rice. With the government unable to service its debt, the currency collapsed.”

Some commentators described Sri Lanka’s organic conversion as an episode of “mega stupidity” on a par with Mao Tse-tung’s order to eliminate sparrows, which led to an explosion of insect pests in the country, massive crop failure, and widespread famine.

Whether our UN obsessed Prime Minister’s dangerous agricultural tax becomes an exercise in “mega stupidity” depends on whether there is enough public opposition to derail her plans.

A consultation document has now been launched, so anyone opposed to Jacinda Ardern’s tax on the agricultural sector, should consider making a submission by 18 November 2022 – full details can be found HERE.

  

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*Should Jacinda Ardern’s tax on livestock emissions go ahead or be scrapped?

Dr Muriel Newman established the New Zealand Centre for Political Research as a public policy think tank in 2005 after nine years as a Member of Parliament. The NZCPR website is HERE. We also run this Breaking Views Blog and our NZCPR Facebook Group HERE.