By Mike Cranstone, President Federated Farmers Whanganui
The He Waka Eke Noa model for pricing farmed animal emissions could either serve as the death knell or an innovative way to position our products. How the Government chooses to set the price for methane and the longer-lived nitrous oxide greenhouse gas will determine the answer.
Agriculture Minister Damien O’Connor is regularly quoted as saying we must lift our game so that discerning, affluent consumers choose to buy New Zealand food. The ag industry has put in its effort paddling the HWEN waka, now O’Connor and government officials need to step up with the messaging to the world, starting with the New Zealand public.
If ‘climate footprint’ is the new currency for discerning consumers, then New Zealand needs to get smarter on how it measures and reports its carbon reduction ambitions. The message must be concise and transparent and one that can be used in market positioning.
New Zealand’s competitive advantage used to be our low cost of production; environmental regulations, among other factors, has eroded that.
As a premier exporter of food, NZ should measure and promote the carbon intensity of every agricultural product that we export.
This will enable us to leverage our farmers’ high levels of productivity to drive the value side of the ledger rather than just the cost. We can establish and market ourselves as the world leaders in low carbon food – food that does not lead to increases in the warming of our planet.
Our politicians and industry leaders have committed New Zealand to do its bit in addressing global climate change, and HWEN is about agriculture doing its share of this challenge. It can be successful for both agriculture as well as for our politicians, but the rhetoric needs to change so that agriculture is not headlined as the problem.
Mitigating climate change is about reducing the warming impact, so when quoting our greenhouse gases the messaging always needs to have split out the methane. The Climate Change Response Amendment Act 2019 is the foundation legislation of our climate response and has a split gas approach, so we need to hold our politicians, media and everyone individually to account, and ensure they use that split gas approach when reporting emissions.
It is the use of the archaic and irrelevant GWP100 metric that extorts methane as 43% of new Zealand’s gross emissions. With stable livestock numbers, agricultural methane emissions are not contributing any additional warming. In fact, livestock numbers peaked in 2017 so we are providing a cooling effect.
Success for New Zealand is dependent on politicians scrapping the sound bite that we aim to be carbon net zero by 2050. To achieve that egotistical target relies on creative accounting rules that treats New Zealand’s atmosphere as being separated from the rest of the globe. Ignoring emissions leakage is like still thinking that the earth is flat.
The world is facing its most severe food crisis; 400 million people are fed out of Ukraine’s food basket. Article 2 of the Paris Agreement which states, ‘emission reductions must not threaten food production’ will be the critical acid test when assessing countries’ climate mitigations.
The world needs more food, and most of the world’s population have a protein deficient diet.
Trade has seen the global supply of food increase with each country producing what it is most efficient at. The supply has increased, and the real food costs have reduced.
Success for global agriculture emission reductions should be measured by how much we can reduce the carbon intensity of the world’s food supply. New Zealand can be a leader of this rhetoric and establish itself as the premium supplier of low carbon food.
So will HWEN be the death knell for our industry or will it create a genuine opportunity?
The answer really lies in the hands of the politicians and industry leaders.
If there is a deliberate and legitimate aspiration to achieve success for our country then they must use “warming” in how they levy farmers and how they deliver messaging to New Zealand.
They must use “intensity” in how they measure effect – success in reducing agriculture’s emissions must be seen as reducing the carbon intensity of food.
They must not use the policy tool (tax) to drive land use change that leaves individual farming businesses with no other options but to exit.
Warming impact the true issue
Three principles that should be a foundation when setting the methane and nitrous oxide levy prices;
- The pricing of methane must be capped at the level of our warming contribution.
The additional reductions required to meet the current 24-47 % methane reduction target are providing a cooling effect. NZ is relying on this cooling to offset significant unabated growth in CO2 emissions. The price of the levy that farmers will pay should not be inflated to incentivise these additional reductions that will benefit all of NZ.
- The levy must not be used as the tool to drive land use change. With no alternative technologies available and comparatively less revenue, less intensive sectors such as sheep, beef and deer farming communities will suffer widespread losses and entire communities left decimated.
- Article 2 of the Paris Agreement states, ‘emission reductions must not threaten food production’. Reducing the carbon intensity of the food we produce should be the metric by which we measure our success in reducing agriculture emissions.