Brian Fallow: Rethink of land use not scary

Planting forests will give us time to come up with permanent ways of eliminating emissions, but it will be only a stopgap measure. Photo / File

Cutting a track through the forest of myopia and vested interests to the broad sunlit upland of a low-emissions future is a task that is neither scary nor infeasible.

It will, however, require more than wind farms, electric vehicles and heat pumps. It will require some significant changes in land use.

GLOBE-NZ is a group of 35 MPs drawn from all seven parties represented in Parliament, led by Green MP Kennedy Graham. It is the New Zealand chapter of Global Legislators for a Balanced Environment.

It commissioned an independent report from the London-based consultancy Vivid Economics on pathways to a low-emission economy, mindful of the Paris Agreement's global goal of reducing net greenhouse gas emissions to zero in the second half of the century.

Vivid's brief was to look at the options for reducing emissions from these islands. It ignores the Government's policy of relying on international carbon trading to outsource up to 80 per cent of New Zealand's emissions to other countries.

Vivid's scenarios include raising renewable power generation and the electrification of the light vehicle fleet and biofuels.

Unfortunately, those changes will not get us anywhere near the aspirational national target of a 50 per cent cut in net emissions by 2050, from 1990 levels. That is because carbon dioxide represents less than half of New Zealand's emissions of greenhouse gases.

Getting serious about reductions requires tackling the 49 per cent of emissions that arise from agriculture, and in particular the bodily functions of cattle and sheep.

Promising technologies for reducing pastoral emissions include: selective breeding of cows that emit genteel lady-like burps rather than volcanic eructations of methane; new strains of ryegrass or other forage plants: precision application of nitrogenous fertilisers: and the holy grail of a methane-suppressing vaccine.

But the Royal Society reckons technical solutions for reducing agriculture-related biological emissions could take a decade or two to reach commercial viability. If at all.
Carbon pricing

Vivid Economics believes a combination of emissions pricing instruments and regulation will be needed to encourage farmers to adopt cutting-edge technology.

The Government, however, persists in peddling the line that all farmers could do in response to a price on agricultural emissions is reduce production.

First of all, that ignores the obvious issue that, if farmers don't pay, the rest of us must. That is a subsidy and it is one that just gets capitalised into land prices - a bigger tax-free capital gain for the vendor when a farm is sold, but a bigger mortgage for the buyer.

And crucially, the absence of a carbon price distorts the signals about land use. It has resulted in a doubling down on dairying, turning rivers into sewers, while forest planting has gone into reverse.

A more diversified pattern of land use would make for a more resilient, shock-resistant economy.

The farming-related technological advances Vivid considers would reduce the emissions-intensity of pastoral farming - emissions per kilogram of milk or meat produced. That has been falling already.

But, if national policy is to keep growing the output of those commodities, that will offset those advances.

So central to the scenarios Vivid outlines is a shift in land use: less pastoral farming, more horticulture, more arable farming and more forestry.

What we are talking about is a transformation away from pastoral agriculture towards horticulture, crops and forestry. But not on a scale or at a pace we have never seen before.

"We are not talking about throwing NZ agriculture under a bus," says Vivid director John Ward. "Rather, what we are talking about is a transformation away from pastoral agriculture towards horticulture, crops and forestry. And the rates of switching we see are no more than continuation of historical trends."

Its scenarios, the serious ones at least, envisage between 10 and 20 per cent fewer dairy cattle by 2050 and 20 per cent fewer beef cattle.

But the economic cost of that would be mitigated by a 15 per cent rise or more in milk or meat production per animal. Sheep numbers could drop by 24-37 per cent. But we have already seen the national flock more than halved since subsidies were axed in the late 1980s.

Forestry is the back-stop. If the hoped-for advances in reducing biological emissions disappoint, that could be offset by more aggressive afforestation.

Vivid sees scope for up to another 2.3 million hectares of forest to be planted, two-thirds of it plantation forests (doubling the present area) and the rest natives.

But it is only the expansion of the forest estate that provides an offset to emissions. Once the trees are harvested and replaced, it just cycles around a new equilibrium level.

Afforestation buys valuable time but the time has to be used to come up with permanent ways of eliminating emissions.

Political parties, Vivid concludes, should look for common ground on climate policy, to create the stable regulatory and policy framework.

"An independent statutory climate commission could help anchor expectations regarding the stability of climate policy, just as the Reserve Bank of New Zealand helps anchor investor expectations regarding price stability."

Columnist Brian Fallow is a former economics editor for the NZ Herald