The ETS Review Panel’s report recommends that agriculture’s biological emissions be brought into the ETS as planned in 2015, with a few changes. Firstly that the two for one deal be extended so that in effect farmers will pay for 5 % of their emissions in 2015 rising to the full 10 % in 2019 with the 1.3% decrease in free allocation kicking in then. This may seem generous until you consider enteric methane emissions were only 2.9% above 1990 levels last year, this makes even 5% excessive.
The panel addressed the three main concerns over livestock emissions this way.
The concern that these emissions were harmless and did not cause an increase in the concentration of any greenhouse gas was ignored by the panel. Too hard for them to counter I believe.
The panel tried to address the concern that NZ was the only country including biological emissions in an ETS by saying that such concerns “ignore the point that these emissions are covered by the target for which New Zealand is accountable”. This comment does not address the issue of us being alone in the world on this and a bit of a laughing stock amongst our international competitors. It also ignores the fact that other countries have international targets too. The panel’s comment also ignores the fact we have no international liability for emissions past 2012, just targets which are conditional, non binding, and with no financial penalty component. To quote Mr Key’s favourite saying they are aspirational. To say they represent a financial liability, as the panel does, is not credible.
The panel also tried to address the concern that farmers have no means to abate emissions by rubbishing this notion; farmers have heaps of options according to the panel. Many submitters submitted on this, most with vested interests, biochar sellers and forestry interests and researchers who make their fortunes researching livestock emission mitigation; amongst them.
Options for farmers to abate their emissions according to the panel are;
Nitrogen inhibitors, these are available if you live somewhere cold and wet, are a dairy farmer and not organic. In other words for most of us they are not an option …..’but could be in the future’ according to the ever hopeful panel. I bet they are not!
It is an upside down world when all of a sudden it is ‘clean and green’ to spray chemicals all over the farm, puffing out fossil fuel exhaust whilst you do it. One thing I haven’t been able to rationalise is that if these inhibitors reduce nitrogen loss and therefore increase grass growth, won’t farmers increase stock numbers or animal intakes to eat the extra grass and won’t that then increase the urine problem? If anyone can help me with that please let me know.
There are no options for farmers to abate methane but the panel believed we would have a vaccine to do this in just 10 to 15 years. I bet we don’t!
Forestry was given as one option for farmers to reduce net emissions but this is nonsense because farm forestry does not reduce a farmer’s net emissions and liability under the ETS. All it does is provide the farmer the opportunity to make money selling carbon credits to reduce the financial impact of the ETS. That is if they want to take on the considerable risks inherent in carbon trading. Every emitter including a motorist has the option of buying land and planting trees, this is not exclusive to farmers.
Another option put forward by the panel is to adopt best practice farming methods to increase the efficiency of production. Basically this means lifting per animal performance. The more product per animal, the less methane produced per kg product. Farmers are continually increasing per animal production anyway and as they do this, their absolute emissions will increase, as will their financial liability from the ETS, but their emissions per kg product and thus their ETS cost per kg product will decrease. Having to pay for livestock emissions will spur farmers on to further increase production to pay for it, thus the effect of this abatement option will be to increase NZ’s total emissions. How increasing emissions helps NZ meet a target of reducing emissions I am not sure, the panel was silent on this.
This last option is the only viable one really but for any abatement to work the point of obligation must be at farm gate level not processor level. The panel strongly recommend this. The panel quite rightly points out that the only way incentives to reduce emissions work is if the obligation is at the farm. Under the current scheme the liability is at processor level so everyone pays the same emission factor regardless of whether they splash DCD about or what their per animal production is.
I believe it is inherently unfair and pointless to have the obligation at processor level and completely unworkable to have it at farmer and lifestyle block owner level. That sums up the ETS really, pointless and unfair. By strongly recommending change, the panel concurs with me on that it seems. The scheme as it exists is only workable because it is pointless and achieves nothing. Any effort to make it meaningful, such as farm gate obligation, will make it unworkable. For that reason I support this recommendation.
The panel did not comment on the lack of environmental integrity in forestry generated carbon credits, namely the fact that soil carbon loss and forestry nitrous oxide emissions are ignored. There is nothing they could say about that really without undermining the importance of forestry to the ETS, and they would not want to do that.
In fact they say that ‘forestry is the key reason why NZ is expected to meet its Kyoto target’ but they are wrong. The only reason NZ is meeting its target is because the target is set using gross emissions, and we are meeting it with net emissions (gross emissions less forestry removals). We had forests in 1990 too but everyone seems to forget this. The panel also got it completely wrong when they say in a table that our 1990 net emissions were 61 million tonnes. They were in fact only 38 million tonnes.
This last error sums up the ETS review really, a half baked glaze over of the intricacies of the ETS to try and affirm that it is working, when it is not. The panel was not objective, stretching credibility beyond what is reasonable in an attempt to justify NZ being the only country in the world to include harmless biological emissions in this crazy scheme.
Farmers have much to fear from this review because the panel debunked Nick Smith’s contention that farmers can’t abate their emissions. Smith is right, the panel is wrong but this is politics, right and wrong are irrelevant. Smith can no longer use this as an excuse to delay agriculture’s entry without undermining the panel. If he does this, the panel might regret being his lap dog.