1 November 2021
Hon James Shaw
Minister of Climate Change
Hon Damien O’Connor
Minister of Agriculture
Minister for Rural Communities
Progressing He Waka Eke Noa
As you will hopefully be aware, the He Waka Eke Noa partnership is nearing a key farmer consultation phase, including consideration of pricing mechanism options.
It is important that any pricing mechanism used aligns with the goals of the July 2019 foundational He Waka Eke Noa document (refer Appendix 1) as well as contributing towards meeting domestic emissions reduction targets.
Federated Farmers is increasingly concerned that the He Waka Eke Noa pricing mechanism may be chosen on the basis that the current 10% by 2030 biogenic methane reduction target must be met without regard to social, economic, and environmental consequences and chosen on a basis that is inconsistent with the pricing principles outlined in the foundational He Waka Eke Noa document. These He Waka Eke Noa pricing principles were transparently reiterated in an October 2019 joint media release by all He Waka Eke Noa industry partners (refer Appendix 2).
Appropriate and warming equivalent treatment of biogenic methane targets
Federated Farmers maintains its opposition to the current emission reduction targets for biogenic methane legislated for in the 2019 Climate Change Response (Zero Carbon Amendment) Bill. The 10% by 2030 and 24-47% by 2050 methane reduction targets go beyond what is needed to achieve climate neutrality, and farmers are therefore being asked to do more than other segments of society. The best available current analysis states that, under current atmospheric conditions an approximate 3% reduction in biogenic methane by 2030 and an approximate 10% reduction by 2050 would achieve climate neutrality, consistent with the Paris Agreement goal of limiting warming to 1.5 degrees.
Federated Farmers’ commitment to He Waka Eke Noa
Over the past two years Federated Farmers and the He Waka Eke Noa partners have closely explored what cost-effective emissions mitigation tools are available and what price may be required to meet the current 10% 2030 biogenic methane target.
Initial analysis undertaken by He Waka Eke Noa concludes that there are limited reduction opportunities currently available for farmers to mitigate the impacts from their emissions, cost-effective mitigation tools are either not yet commercially available or are not enabled by New Zealand regulations. Initial analysis also suggests that any price on emissions set to achieve the 10% by 2030 target will be extremely harmful to the social and economic wellbeing of farmers, rural New Zealanders and the New Zealand economy – shrinking food production and resulting in emissions leakage by pushing food production to much less efficient offshore producers.
This is because currently, the only way individual farmers can reduce their biogenic methane emissions from livestock is to reduce the amount of feed/forage they provide to their livestock. We do not therefore support such an approach. Many innovative tools are being developed that may decouple this relationship in the future, but none currently exist for farmers in New Zealand.
We do, however, support the development of an appropriate pricing mechanism that will incentivise increased efficiencies (lower the emissions intensity of milk and meat) and provides a framework as outlined in the He Waka Eke Noa document, to incentivise the use of cost effective mitigation tools to reduce emissions when they come on stream.
We have never supported, and do not support, a pricing mechanism that achieves legislated targets at any cost.
Federated Farmers seeks:
Assurance that Government will support a pricing mechanism for agricultural emissions consistent with the foundational He Waka Eke Noa document’s principals. Such principles include lowering global emissions, maintaining food production, maintaining competitiveness in international markets, and maintaining farmer profitability (relevant sections provided in Appendix 1).
Federated Farmers remains committed to the He Waka Eke Noa partnership and remain committed to designing a framework for a credible and ambitious pricing mechanism that contributes towards reducing emissions at the farm level. We hope that by contributing towards agricultural emissions reduction He Waka Eke Noa can serve as a template for a more collaborative approach to other challenging areas in the sector, both domestically and internationally. We do not wish for the partnership to be jeopardised by a combination of factors including; New Zealand’s already world leading emissions efficiency, a failure to recognise the lack of mitigation tools in the short term and an unnecessarily ambitious short-term biogenic methane target.
Clarification from Government on the outlined question will strengthen the He Waka Eke Noa partnership going forward.
Andrew Hoggard, National President
HE WAKA EKE NOA – OUR FUTURE IN OUR HANDS
PRIMARY SECTOR CLIMATE CHANGE COMMITMENT
Below are the first two paragraphs of the 2019 He Waka Eke Noa document. The document can be found at: https://beeflambnz.com/climatechangecommitment
Primary sector welcomes agricultural emissions decision
The primary sector welcomes the government’s decision to work with farmers and growers to achieve practical and effective outcomes on climate change under He Waka Eke Noa – the Primary Sector Climate Change Commitment.
New Zealand farmers are already world leaders in the highly efficient production of low-emissions food – and we want to ensure they stay world leading without undermining the competitiveness and resilience of our primary sector.
That’s why we are committed to working in partnership with the Government to creating the right environment to incentivise and support change as the world transitions to a lower emissions economy in an effort to limit global average temperature increase to 1.5-degrees above pre-industrial levels whilst maintaining food production.
As part of this Commitment, He Waka Eke Noa, the primary sector will work with government to implement an effective programme for farmers and growers to deliver emissions reductions and offsets while maintaining profitability.
Through a joint action plan – with the primary sector, government and Māori and Iwi – farmers and growers by 2025 will be able to calculate their emissions and offsets at the farm gate, have greater confidence in assessing options to reduce or mitigate their emissions, and know that there is ongoing investment to expand the emissions reduction tool box available to them.
The framework will address climate change within a whole farm systems framework, recognising that farmers efforts to reduce emissions sits alongside water quality, biosecurity, biodiversity, animal welfare, and financial sustainability.
We are pleased that the government has recognised that it does not make sense to bring agriculture into the ETS and that we have a pathway to work with the government to develop a more appropriate framework.
The sector will work with government to design a pricing mechanism where any price is part of a broader framework to incentivise the uptake of economically viable opportunities that contribute to lower global emissions. We outlined the principles that must underpin design of pricing in in He Waka Eke Noa.
The primary sector acknowledges that Government is legislating for a regulatory backstop if they do not feel enough progress has been made through He Waka Eke Noa to enable a farm-level mechanism.
Like the ICCC, we do not believe a processor level ETS mechanism is the right approach, but it is the Government’s prerogative to put this in place.
We are focusing on the positives and will be getting on with the job of delivering against our He Waka Eke Noa commitments.
Achieving this programme of work will not be cheap, and it will not be easy. Substantial annual funding of at least $25 million has been committed by the primary sector as we work towards achieving an ambitious five-year timeframe.
Success will require an enormous effort by the industry-good organisations, with the support of processors, and the commitment of individual farmers and growers.
We welcome this pragmatic and sensible decision by the Government to work in partnership with industry to achieve tangible on-farm change and hope that it might provide a blueprint for the way we work together to solve environmental challenges in the future.
We firmly believe this agreement will enable the fastest possible progress to be made towards reducing New Zealand’s biological emissions in an effective and sustainable way that brings farmers, growers and communities along with us.