By Andrew Hoggard, President Federated Farmers of NZ
The recent open letter on He Waka Eke Noa in Farmers Weekly has sparked a lot of discussion, and that’s a good thing. We should always be open to debate whether we are doing the right thing, and so much of the farm emission pricing discussions happened behind closed doors, meaning most farmers never got the chance to properly go on the journey to consensus between the 11 partners. The Covid-disrupted short consultation period, and the Government’s unwillingness to further extend political timelines, didn’t help.
It’s also fair to say that things have changed since that farmer consultation, both inside and outside HWEN. Inside HWEN, the final proposal to the government was slightly different to that presented during consultation - for the better in my opinion, addressing many concerns we heard from our members.
Outside HWEN, a key thing that has changed is the counterfactual – i.e. ‘if it’s not HWEN then it’s the ETS’. In our own member survey, there was a higher number of respondents who favoured going with the farm level levy, as opposed to the processor levy, the ETS or just telling the government to bugger off. We heard loud and clear that a large reason for this view was due to concerns about the ETS ‘fallback’ option. Feds have constantly voiced opposition to the Government’s threat to bring agriculture into the ETS if HWEN does not work out. In 2019 we called the ‘fallback option’ a show of poor faith and it has frustratingly further complicated an already complicated issue. Certainly in our National Council deliberations, this weighed heavily on us - if Feds didn’t support HWEN, would we be held responsible for farmers going into the ETS?
However, I now question whether that ETS ‘fallback’ alternative is a likely outcome. Feds have always criticised bringing agriculture into the ETS, as designed at the processor-level in current legislation as unworkable, expensive, unscientific and a blunt tax on food production, and we are increasingly not alone in saying this.
In March and June this year, the Climate change Commission released two reports and did what it was established to do, deliver independent advice. While I do not agree with everything in these reports, their comments regarding the ‘fallback option’ in there June report are notable, stating:
We conclude with high confidence that processor- level pricing within the NZ ETS will not enable farmers to make informed decisions on farm management actions to reduce the emissions intensity of production, and will be limited in its effectiveness at reducing emissions while supporting production.
Would the government really ignore their experts just because a group of farmers asked for a different approach to the levy? So I think yes we can have some good debates on whether the current mechanism in HWEN is the right one, or are there better changes that could be made.
While there are aspects of the open letter that I am personally in agreement with, there are probably two aspects I disagree with. Firstly, the call to farmers to question their Feds subscription. We cover a massive range of issues that affect farmers, and while you may not agree 100% with our stance on a singular issue at a certain point in time, I am sure I can point out nine others where you do. If we are not doing that other work, who is? Will you be getting better outcomes over a wide range of issues without us?
Also, if you are upset about a certain issue, then the way to change that is to be more involved, not less. Our decisions should reflect what the grass roots is feeding up through our Provincial Presidents. With HWEN, unfortunately, the decision had to be made in the absence of member knowledge. But the government will be coming back with their version in a few week’s time, so then is your opportunity to ensure your views are heard by your provincial exec and reflected up through the organisation to determine what position we take into the submission process.
The second aspect I would push back on is the conflation of the targets with HWEN.
The 2030 and 2050 methane reduction targets were set in the Climate Change Response Act, and quite frankly if we want changes to the targets it’s best done through that Act. Federated Farmers submitted that the targets should be based on what reductions are required for no additional warming to be caused by methane. This ‘no additional warming’ goal is the same as the goal set for long-lived gases. Feds are advocating for methane to be treated the same on a warming basis as all other gases, a very reasonable policy. Using the best available science (including the science underpinning the GWP* metric) a 10% reduction in methane by 2050 adds no additional warming and is therefore ‘zero carbon’ equivalent.
When HWEN was proposed by industry to the government, the current methane targets (10% by 2030 and 24-47% by 2050) had not long been approved 119-1 in parliament, albeit with National proposing changes that would have revisited targets and made clear the importance of food production. This was a very strong majority in parliament for the current administration.We’ve got some good political capital, but we didn’t have a hope in hell of a reset of the targets via HWEN. If I was that good a negotiator, I wouldn’t be waking up at 4am to get cows in, I would be on Wall St making millions.
Some people like to say ‘let’s integrate GWP* with HWEN’. The GWP* metric used for anything other than setting split gas targets and budgets runs the risk of grandparenting. If I have been a really inefficient farmer, then yes it’s really easy for me to say I have reduced or can reduce at 0.3% per year. But, for a farm that has always been on the ball, then this is a huge ask on them. If you try to apply it at a sector level then you potentially create perverse outcomes if we have land use change between sectors, and could well remove the ability for people to try alternate land uses, depending on market returns.
Heavy-handed methane targets remain the elephant in the room that needs to be addressed. There is currently no plan by the government to look into them until 2024. Even if we got a pricing mechanism we could all agree on, it won’t matter in the slightest if we have a 47% reduction target for 2050. Likewise, even if we got a reduction target we felt was fair, but still had a pricing mechanism that was just a blunt revenue-raising instrument, it would be a poor outcome.
There is a lot of talk about the need for farmer buy-in, but to achieve farmer buy-in farmers need to agree on both the ‘where’ (targets) and also the ‘how’ (HWEN).
Feds will continue to advocate for 2030 and 2050 methane targets that are in line with the warming goals that are being set for other emissions. We will also continue to advocate for a mechanism of achieving such targets in a way that is best for all our members and are open to their feedback, be they arable, beef, dairy or sheep.
