The government is making a raft of changes to the emissions trading scheme to formalise the country's commitments under the 2015 Paris accord. As well as aiming for net-zero carbon emissions by 2050, the bill proposes a 10 per cent cut in methane emissions by 2030, with levels in 2050 to be 24 to 47 per cent lower than those in 2017.
Earlier in the conference, Climate Change Minister James Shaw said most of the changes to the ETS would be uncontroversial. Many, including putting a volume cap on emissions covered by the scheme, and a phase-down of free-allocations to trade-exposed heavy industry, had been signaled by the previous government and had been widely consulted on.
The one area of contention, he said, is the inclusion of agriculture in the ETS.
The Interim Climate Change Committee had recommended emissions be recovered through a levy on processors until a simpler farm-level scheme can be developed by about 2025. Those funds gathered from processors would be used to help establish the new regime.
Industry groups countered with an offer to put the $25 million a year they are currently collecting for climate change work to the same purpose in partnership with the government.
Shaw said the government is in the "closing stages" of considering those options and a decision is imminent.
The Zero Carbon Bill has been dogged by delay. Farmers, many bitterly opposed to the changes, sought and won an extension on the deadline for submissions on the plan. The bill is due to be reported back to parliament later this month.
As a trade-exposed industry, farmers would only be at risk for 5 per cent of their emissions initially. At a CO2 cost of $25 a tonne, the Interim Climate Change Committee estimated the emissions charge would cost farmers 1 cent per kilogram of milk solids or 3 cents per kilogram of sheep meat.
Given that, and the success many farmers are already having in reducing emissions, conference moderator Rod Oram challenged Simpson as to whether there really is a problem.
Simpson said the European farmers New Zealand competes with are subsidised, so will not bear any costs relating to their emissions. Sales lost to them will go to higher-emitting producers, there will be no emissions benefit, and rural incomes here will fall, he said.
National doesn't believe agriculture should be in the ETS. But if it is, there need to be much stronger safeguards for farmers, he said.
While potential new grass varieties and other methane-reducing technologies are exciting, at the moment the only way to achieve sizeable methane cuts is through stock reduction.
"The steps that are available at the moment are small and are not going to get us to where we need to go."
Separately, National Party leader Simon Bridges yesterday pledged that, if his party wins government, the legislation restricting the use of gene-editing would be reviewed so that the technology can be applied in areas such as climate change, pest control and human health.
Simpson told delegates the delay in finalising the government's climate change legislation is less about opposition from farmers and more about the Labour and Green parties' relationships with NZ First leader Winston Peters.
He commended the effort Shaw had made to date to work with National in order to achieve genuine cross-party support for the legislation.
But he said it is not his job to somehow "panel beat" the National caucus or party into a shape to fit the government's legislation.
The rural sector is "literally up in arms" over a whole range of other changes the government has introduced or threatened – unrelated to climate change - and the government will need to rethink its approach if it expects farmers to get behind emissions reduction.
"You do it by dealing with farmers - rather than dealing to farmers," he said.
Simpson said that if the government still wants bipartisan support on the zero-carbon bill, it has to put up legislation that could win that support. Trying to pass the legislation on the coalition's bare majority would put at risk the certainty people have been looking for.
"The ball is firmly in the government's court. Our door remains open."
