Alistair Boyce: A Considered Refutation of the Farm Emissions Tax and the ETS

Like many New Zealanders I was bewildered by the Jacinda Ardern government media announcement to tax farmers as the primary tool toward meeting Emission Trading Scheme targets. It seemed anathema to me, and I sought alternative perspectives and a reality and fact check.

By chance perspective presented themselves in the form of farming and forestry friends with conservation, hunting and fishing experience. These guys go all the way back to Rob Muldoon and ‘Think Big’. This group have lived and breathed New Zealand’s mountains, bush, streams, rivers, sea, forests and fields.

In the following discourse I have taken the liberty of paraphrasing, interspersing commentary with documentary narrative recorded in notes from our conversations and discussions.

The Discourse

This is referred to as “the water story”. In relation to the Emission Trading Scheme (ETS) the government is providing scant consideration of this valuable resource. Carbon forestry uses considerably more water than farming and in perpetuity (i.e., forever). Hydro electricity generation and efficient farming irrigation are permanent losers.

The other primary concern is the carbon forestry industry and the fact it is overtaking farming and our natural environment at an alarming rate. Incumbent to this is the, often lauded wilding pine spread for which New Zealand cannot claim carbon credits. New Zealand is fast becoming a permanent and random pine plantation.

Currently permanent carbon tree planting is being driven up by market forces and does not require government incentive (taxpayer dollars) with value of carbon credits rising from $80 to $200 (anecdotal). Carbon forestry does not require resource consent. The ETS is based on carbon prices increasing, leading to increasing tree planting and carbon forestry. Under the current ETS regime marginal farmland can net 7-8 times more profit than sheep and beef farming and in general is already more profitable than mainstream farming.

There are ongoing concerns about the international trading of carbon credits and reference is made to The Listener article, Emissions Trading-” We Cheated” of April 2016. Unrestrained market forces can easily end up taking precedence over protecting the environment.

It is estimated at the current rate of conversion by 2050 one third of New Zealand will be covered in forestry, mainly exotic trees and mostly pine. Under the ETS these trees must stay using free water, forever depriving downstream water catchments, hydroelectricity and farm irrigation.

The government should conduct an urgent analysis on carbon forestry water impacts on farming.

There is a huge and permanent impact on increasing water supply to feed the trees forcing decreased water availability for irrigation and hydro electricity production. To meet shortfall, without electricity infrastructure, more coal will be imported, on carbon producing ships and burnt at Huntly power station, increasing emissions. Currently carbon investors do not have to pay for water. Predominantly international investors buy marginal farmland at low prices, squandering free water and potentially driving profits offshore.

Increasing compliance and the new Emissions Tax make marginal farming with low stock rates uneconomic and mainstream farming marginal with negative impacts through the rural socio-economy. This land will convert at an ever-increasing rate to non-native, non-natural permanently carbon credit forested land. Investors buy at low prices and have access to free water with a permanent profit line that probably leaks overseas and provides minimal rural socio-economic multiplier for the people of New Zealand. It can be considered as an international trading scam that has been exposed since 2016. 

Small town New Zealand are and will be squeezed out. This is acknowledged in government forecasts. The New Zealand economy based on farming sector exports is jeopardised in the name of spurious global climate change ideology, being a market leader in cutting food production when the world population require efficient increase. So, who really wins?

Government climate change papers direct farmers to be forced off the land. There is no government regulation to stop it. Responsibility gets handed over to District Councils, presumably to manage the resulting socio-economic dislocation while rates decrease as the rural sector contracts.

The easy profits of carbon farming take over the farming sector dislocating the rural economy.

Carbon forestry uses more water than farming depriving natural water catchments, like wetlands, lakes, streams and rivers of their life blood. I researched a paper stating that per hectare high country land “converted to pasture had reduced low flows by as much as 50% and conversion to forest resulted in a 62% reduction”. Otago farmers affected by carbon forestry in their region are concerned about DOC reports showing impacts of water yield loss in dry regions of New Zealand. Conversion to forestry means fewer days remaining farmers can irrigate. A 2006 paper proves concerns regarding water supply and its quality in this case to Dunedin. Negative effects on hydro power generation capacity are also highlighted. 2006- this clearly isn’t a new revelation.

We argue and agree on four main drivers of climate change emissions.

1.       Foremost is population, especially increases. tourism, immigration, travel and natural population growth increases the carbon footprint upsetting the ETS balance the most with all the derivative consequences.

2.       Increasing international trade.

3.       Increasing GDP (economic growth).

4.       And last is increasing intensification(efficiency) of farming.

In response to the need to feed the planet’s populace, global food production was excluded in the ‘Paris Accord’ yet the government insists on penalising farming (food production) rather than tackling population-based drivers of emissions.

There is no doubt New Zealand farming production is highly efficient and already reducing its carbon footprint of its own accord.

People, population and economic production drive increasing carbon emissions. Free trade agreements, international horticulture, incumbent nitrogen fertilizer, shipping, transportation and international labor movements are all primary culprits. An example is given of the wine industry which appears untouched by government ETS policy but is a relatively higher emitter.

There is an obvious problem in the privatisation of electricity. It is in the interest of suppliers to have “shortages to maximise profit”, keeping prices high. Closing the Tiwai aluminum smelter is an obvious alleviation. Electrifying the vehicle fleet currently seems a taxpayer subsidised rich person's option.

Electricity infrastructure is not even close to being in place to satisfy the bigger picture.

Concluding Commentary

Think through the ‘water story’; do we want New Zealand to turn into a permanent pine plantation taking over the natural environment and dislocating our rural sector?

There is now the obvious dichotomy of how a government manages economic and population growth and wealth creation with the ETS target and equation inhibition.

The net result of the course that the 6^th Labour government is ‘ploughing’ translates to the possibility of one third of New Zealand planted in permanent forestry by 2050, free water and easy profits for offshore investment entities with irretrievable social dislocation of our rural economy and its productive importance to our national economy being jeopardised.

Right now, rural New Zealand is the primary target when its production is only a symptom and not the primary cause of emissions. There is almost an irony as native forest is pushed aside for the heralded pinus radiata; and the needs of hard-working small town New Zealanders are swept aside like pine needles after Christmas.

The real drivers are being ignored by the government. The rural sector is the scapegoat, destined to be marginalised and divided from the bourgeoisie of expedient centralised decision making. The people of New Zealand will pay a heavy price with socio economic dislocation, the negative rural business multiplier and sliding export revenue. The example of the Sri Lankan socio-economic calamity is highlighted again. International food shortages adversely affect the poor. Climate change ideology and policy under this government appear to be a privileged persons toy rather than a serious attempt to curb emissions.

It's climate change socialism on steroids, dangerously close to totalitarianism in the guise of green ideology. A command economy that limits and lowers food production but does not deal with the primary drivers of climate change emissions being population dynamics and economic growth.

New Zealanders either comply in the divisive ‘hermit kingdom’ or pick up sticks and leave for an alternative country (maybe Australia) craving pragmatic climate solutions that also provide for the wellbeing of people, which is surely still the government's primary and immediate purpose. Instead, this confused government is embarking on a high-risk strategy that fails scrutiny

The brain drain will fast become the rural drain and the planet and New Zealand's population will be no better off, in fact the future of both will be further compromised. 

Alistair Boyce is a publican/chef who enjoys hunting, the natural environment and has close connections to rural communities.