Cabinet’s emissions pricing plan leaves too much to chance

Only the Green Party has a plan to reduce agricultural emissions at the scale and pace needed. The Labour Cabinet’s plan for pricing agriculture emissions announced today falls short.

“The Labour Cabinet’s emissions pricing plan leaves too much to chance. People deserve a plan that will work - and with a strong hand in the next government, the Green Party will make it happen,” says Green Party co-leader and climate change spokesperson, James Shaw.

“We need an enduring cap on total emissions that reduces over time. That is the only way we will be able to cut pollution in line with what science tells us. We can start immediately by reducing reliance on the things that fuel emissions-intensive farming, like nitrogen fertiliser and imported supplementary feed.

“In my role as the Minister of Climate Change, I have made clear to my Labour colleagues why I do not support their preferred option for pricing agriculture emissions. We have agreed to disagree. 

“I do support Cabinet’s decision to develop a standardised way of measuring on-farm emissions. While the Know Your Number programme has had good uptake, a single accounting system for farm-level emissions will be a critical component of any future pricing system.

“I also strongly support the decision to recognise carbon sequestration from things like wetlands and small-scale planting in the Emissions Trading Scheme, rather than in a parallel levy system. This was recommended by the Climate Change Commission and was always the first preference of the agricultural sector themselves. I have worked very hard to get this decision over the line and I look forward to implementing it in the coming year. 

“However, I do not think the Labour Cabinet’s proposed levy-based system will work to actually reduce emissions.

“First, under Cabinet’s plan, there will be no cap on agriculture emissions - and therefore no guarantee that emissions will decline. 

“For most of its history, the existing Emissions Trading Scheme (NZ ETS), which covers every sector of the economy except for agriculture, also had no cap. It was a massive public policy failure, which saw our country’s emissions go up almost the whole time we had an NZ ETS which was supposed to bring emissions down. 

“Our emissions only started to come down when I introduced a cap into the NZ ETS in our first term of Government. We should learn from the mistakes that were made with the NZ ETS when it comes to a pricing system for the remaining half of our emissions that come from agriculture. 

“Second, Cabinet has said it would set the price of emissions itself. Any system that leaves pricing decisions up to Ministers – even with a role for the Climate Change Commission – is guaranteed to be subject to lobbying. Future governments are all too likely to set the price too low to drive change. Rather than encouraging more environmentally sustainable farming practices, a low price is likely to just be absorbed into business as usual and passed on to customers.

“Third, Cabinet has also made a promise to keep the price as low as possible. It is unclear that there will be any revenue to recycle back into incentives for farmers to cut emissions, once behind-the-farm-gate deductions and operating costs for the scheme have been covered. Given that the scheme is designed to raise revenue for incentives, rather than to use price as an incentive, this is a serious flaw.

“Fourth, Cabinet’s preferred option is unfair to farmers who have already invested in reducing their emissions. Because the levy would be set at a flat rate, farmers who have already worked to cut emissions without reducing production will pay the same rate as those who have done nothing. 

“Finally, the plan approved by Cabinet is weak enough that it could be easily dismantled by any future government. In opting for short-term political convenience, Cabinet is short-changing the future of our children and grandchildren - as well as the future of the agricultural sector in Aotearoa.

“Only the Green Party has a credible plan for what we should do next. We need to learn from what works for pricing emissions in all other sectors in Aotearoa, and apply the same basic principles to agriculture. 

“First, it is essential to set an annual cap on methane emissions - and reduce it every year to guarantee the methane targets in the Zero Carbon Act are met. We would then draw from the expertise of the Climate Change Commission for decisions on how to allocate methane units within the cap in a way that is fair and recognises the circumstances of different types of farming, like sheep and beef farming, dairy or horticulture. 

“Farmers and growers would be required to hand in units for their on-farm emissions of methane and nitrous oxide, and could trade between themselves. Only farmers and growers would be allowed to trade units, without the influence of speculators or outside organisations. This would mean farmers themselves set the price of emissions reductions through the market, providing a powerful incentive to invest in action to cut emissions. 

“Landowners could earn revenue from the ETS by planting trees, rewetting peatlands or any other scientifically valid way of removing carbon dioxide from the atmosphere. This would give farmers the revenue they need to cover their methane or nitrous oxide emissions. 

“While this system is put in place, we would take immediate action to cut agriculture emissions. We would immediately reduce the cap on synthetic nitrogen fertiliser, and banning unsustainable imported feeds like Palm Kernel Expeller. With Green MPs in the next Cabinet, we can take these steps at the same time as developing an effective agriculture pricing system,” says James Shaw. 

Green Party Agriculture spokesperson Teanau Tuiono added:

“We can have a thriving, sustainable farming sector that supports rural communities and tackles the climate crisis. This year’s election is a critical moment that will shape the future of farming for decades to come. A decision to take the least action possible is not good enough. 

“New Zealand faces a stark choice. It can either elect a National-Act government with a policy platform of delaying action on agricultural emissions and dismantling the Zero Carbon Act, the Climate Change Commission, and with every other action we have taken. Or, the Green Party will be in a position to set the direction of the next government and demand that agriculture fully plays its part in protecting the climate. 

“Our children deserve action that meets the scale of the crisis and ensures agricultural emissions actually reduce in line with the Zero Carbon Act targets. Anything less than this is too little, too late. Dealing with agricultural emissions is a challenge that has defeated successive governments for decades. We cannot leave another generation to inherit the burden of slow progress.

“If we get this right, we can change the way we grow our food to keep our climate healthy and benefit our rural communities for generations to come,” says Teanau Tuiono.

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