Pattrick Smellie: Where to now for the climate change deal with farmers?

Dairy farmers have long felt they are carrying the environmental burden. Photo / File

COMMENT:

Next time you hear a farmer complain about how unfair it would be to put a price on agricultural greenhouse gas emissions before technology arrives to help reduce them, reach for that pinch of salt.

In the same way that Greenpeace is happy to muddy the waters with simplistic claims that the use of 95 per cent "free allocation" for agricultural emissions is a free ride, which it's not, many farmers foster the pretence that if there's no science to help, then they shouldn't have to pay.

Why is that wrong?

For a start, there are already some ways to reduce on-farm emissions, using smarter farming practices and readily available technologies that help reduce nitrous oxide emissions.

It's true there are no easy fixes yet for methane emissions, apart from farming fewer cows. Like it or not, that is likely to be one of the answers. But this week's package of recommendations from the Interim Climate Change Committee acknowledges that methane is a special case gas.

That's why it is most likely to be priced under a regime that refers to, but is not part of, the emissions trading scheme. This is a crucial distinction that much reporting is missing. Methane is not going "into" the ETS as such. Rather, it will be tied to the price of carbon set in the ETS.

The calculation saying dairy farmers would pay just 1 cent per kilogram of milksolids under the ICCC levy-rebate proposal assumes a $25 per tonne price of carbon, which is far lower than it will need to be if it's to have any impact on climate change.

More to the point, the "unfairness" argument pretends there would be no cost to anyone if the agricultural sector doesn't start paying for its emissions.

That's not true. Quite apart from the real-world impacts of climate change, all New Zealand taxpayers are exposed to the real dollar costs of the country's commitment to the Paris climate change accord.

If farmers pay nothing, everyone else pays more.

This is a burden-sharing situation. Many farmers already feel they are bearing unreasonable environmental compliance burdens, but that complaint is as flawed as landlords who would rather not rent warm, dry homes because it costs them money to install insulation and heaters.

No one said farming is easy, but it is a business and a choice, and like any business, the rules can change in response to circumstances.

Thankfully, agricultural sector leadership has recognised all this and produced a highly significant joint commitment to coincide with this week's ICCC's report.

The Primary Sector Climate Change Commitment, E Waka Eke Noa, carries the logos of 11 of the peak agricultural lobbyists and farm practice experts, and is backed by dairy sector heavyweights Fonterra, Synlait, Miraka and Tatua.

Federated Farmers, the weak link in this chain of farm sector solidarity, may have its spine stiffened by the fact that the Fonterra Shareholders Council got on board late on Tuesday.
However, the fight is not over and the policy path is not yet settled.

There will be competing claims galore not only during the month of consultations on the alternative transition plans laid out by the ICCC and the farming leaders group, but also at the select committee hearings on the Climate Change Response (Zero Carbon) Amendment Bill.

Sorting the sheep from the goats, as it were, will be a challenge to non-expert observers of this tussle, so here are two key indicators to watch for:

1. Will the methane targets in the Zero Carbon Bill change?

The bill currently proposes methane emissions cuts of between 24 per cent and 47 per cent by 2050. Farming leaders all believe that is completely unachievable. If that range is not wound back nearer to a 10 per cent reduction, this week's constructive coalition will come under intense pressure;

2. Whose transition plan wins out?

The farming group wants to spend $25 million a year preparing farmers for on-farm emissions calculation and pricing by 2025, with no pricing before then. The Government proposes levies to raise at least $47m a year to recycle into on-farm preparations. It would start pricing agricultural emissions in 2021 at the processor level, before on-farm pricing came in mid-decade. The Government clearly prefers the latter option, which the ICCC recommended. Farmers may make a fight of it.

Imperfect as they are, these two issues are a proxy for the balance in the swirl of arguments that will emerge in coming weeks. The clamour of "too much" versus "not enough" is unhelpful when, let's face it, this is no longer about stopping climate change, but minimising its inevitable impacts.

Just ask the residents of Matatā, whose battle over a "managed retreat" from a location no longer appropriate for housing is just the tip of an iceberg that is already melting fast.

- BusinessDesk