Pete Hodgson: 'Fart tax' is really a $925m annual bargain for farmers

COMMENT

More than two years ago I said research, not taxation, offered the best prospects for reducing greenhouse gas emissions from farming.

Nothing has changed. The Government's key climate change policy for agriculture is an exemption from emissions charges or "carbon tax" on methane and nitrous oxide, the main greenhouse gases from farming.

The Kyoto Protocol puts a price on greenhouse gas emissions, to encourage cuts and make non-polluting energy sources more competitive.

Come 2008, when the protocol takes effect, industries other than agriculture will be facing a charge on their process emissions.

But agricultural gases - more than half of New Zealand's total emissions - will be covered by the state.

The Government will take responsibility for ensuring New Zealand meets its Kyoto target regardless of the level of emissions from farming. Projections put it about 16 per cent above that target.

If agriculture had to pay the full cost of its emissions, the bill would be up to $925 million a year from 2008.

You would not know this from the ruckus raised by farmers over the proposed levy to fund research into agricultural emissions.

It would raise $8.4 million a year from the farming sector, topping up the $4.7 million a year that taxpayers already invest in such research.

Farmers will be shielded from the full cost of farm emissions because that is in the interests of the New Zealand economy.

But in the longer run we need to find a way to cut the emissions, and our best chance is through research.

The Government would rather not impose a compulsory levy on farmers. For two years we have urged the sector to accept the logic and fairness of making its own funding arrangements.

Yet it has voluntarily committed just $800,000 to research, less than a tenth of what an independent scientific panel said was needed for a serious research programme.

Farm foresters argue they have done enough to fight climate change by planting trees, which absorb carbon dioxide and earn forest sink credits under the protocol. They miss two vital points.

First, by retaining sink credits in Crown ownership the Government is able to shield farmers from the cost of farm emissions. To that extent the credits are being used to enable special treatment for farming.

Second, forest sinks are not an excuse for avoiding action to reduce emissions at their source.

Farmers need to take some responsibility for addressing their industry's greenhouse gas emissions. They can do that with about $300 a year for an average farm.

* Pete Hodgson is MP for Dunedin North and convenor of the Ministerial Group on Climate Change.