Agriculture’s exclusion from ETS could be over after policy review

Farmers might have to pay for their emissions like everyone else under a revision of the Government's main climate change policy.

The Emissions Trading Scheme (ETS), which puts a price on greenhouse gas emissions, is being reviewed this year.

A briefing paper produced for the Government by the Ministry for the Environment said it expected the review to consider agriculture's entry into the scheme.

A ministry spokeswoman said this did not amount to a recommendation to the Government and was simply a comment on the scope of the review. The terms of reference had not yet been determined by the Cabinet, she said.

Advertisement

About half of New Zealand's greenhouse gas emissions come from agriculture. The ministry's briefing paper said there were few options for reducing these apart from cutting stock numbers.

It warned that the ETS was not having a significant impact on emissions and changes would be needed.

The scheme is the Government's main tool for addressing emissions that contribute to climate change, requiring industry to pay a charge for each tonne of emissions.

It was originally proposed that agriculture would be included in the ETS but when National came into power it delayed this. National later postponed agriculture's entry into the ETS indefinitely, instead funding research on lowering farmers' emissions.

The ministry's paper said this research was "unlikely to produce significant gains in the short term".

Green Party co-leader James Shaw said National's attempt to protect farmers would hurt the agriculture industry in the long run.

"Farmers and businesses rely on price predictability. If they don't have a carbon price they can rely on, it actually makes it very difficult to plan five, 10, 20 years into the future," he said.