La Niña weather patterns are with us once again resulting in near normal rainfall, slightly above average temperatures but fewer ‘hot’ days due to the predominant nor-east weather patterns. We’ve now had three La Niña events in a row which is the first time this has happened since 1998-2000.
Climate Change is currently at the forefront of most farmers minds. Unfortunately, the passion that has been evoked through the governments proposed emissions pricing system is detracting from the real challenge at hand – minimising our impacts on climate change – what can I do on my farm to do my bit towards reducing overall emissions? The future is about agriculture mucking-in rather than playing the blame game, and we need to keep this front and center.
There’s no doubt the Governments response to the He Waka Eke Noa recommendations has fallen short of the mark, but it also re-affirmed what we all knew already, there are significant viability concerns for some sectors if the methane price is set too high. However, I have much faith that the He Waka Eke Noa sector partners submission will help address this. I’ve been really impressed by how the partners have pulled together and developed a pragmatic response, and I encourage every farmer to read and understand their submission (alongside the original recommendations) rather than relying on second-hand information.
Personally, I think there is much confusion within the farming community around the nature and purpose of the pricing system that was designed by the He Waka partners. So, I thought it would be useful to provide an overview.
The farm-level pricing system is a mechanism to collect (and ring-fence) revenue in a fair and equitable way for two specific purposes:
Fast-tracking investment into mitigations for emissions reductions; the goal being to provide farmers with a greater range of options and potentially a future competitive advantage.
Providing incentives for the increased uptake of current and future mitigations to reduce emissions; while the 2050 methane reduction target has ‘more holes in it than a tea bag’ it’s hard to disagree with the initial 10% reduction target.
The farm-level approach ensures each farms payments better reflect their actual impact, as opposed to the processor-level approach where everyone is average. Farmer feedback strongly supported this.
In addition, sequestration that is not eligible for the NZ ETS, or in the case of post-89 indigenous vegetation, that has been extremely difficult to register in the NZ ETS, was also to be funded by the levy. This was to acknowledge that many farmers have been sequestering carbon on their farms for years, and that if they are to face a cost for their emissions this should be accounted for. Recognition of this sequestration also supported the affordability of pricing emissions, particularly for extensive farms systems that are typically impacted to a much greater extent by the emissions cost.
The Governments response to sequestration was a mixed bag, while they missed the point around why the range of categories was put forward, they did come up with a better solution as to how it could be provided for. Taking sequestration out of the legislative framework and using a separate contractual system effectively creates a closed voluntary market negating the concerns around inconsistencies with the NZ ETS and equity with other stakeholders. It also legitimises scheme specific rules, noting these still need to be credible.
While there are pros and cons with the He Waka approach like all challenges of this nature there is no one simple solution. One thing I've learnt since moving from the role of an advocate to a consultant is finding workable solutions is much more challenging than pulling them apart!