Whanganui farmers consulted on payment options for greenhouse gas emissions

Farmers listen as industry experts lay out their options on taking responsibility for their greenhouse gas emissions. Photo / Laurel Stowell

Farmers are weighing up options for paying for the greenhouse gas emissions of their industry.

Last week three options were presented at a roadshow in Whanganui, put on by Beef + Lamb NZ and DairyNZ. About 70 attended - mainly sheep and beef farmers and rural professionals.

Governments had wanted to put agriculture into the Emissions Trading Scheme (ETS) since 2003, Beef + Lamb NZ chief executive Sam McIvor said.

If that happened they would pay for their greenhouse gas emissions through the processors of their milk and meat, and the money would go to the Government. By 2050 they could be paying $6 per kilo of lamb and $3.20 per kilo of milk solids.

"The very clear conclusion for us is that that would have dire consequences for the New Zealand primary sector," McIvor said.

However, fellow Kiwis expected farmers to play their part, he said.

The country's 25,000 farmers have until May 31 to present other options that suit them better. DairyNZ and Beef + Lamb NZ have come up with two.

One is a farmer-level levy, where farmers would calculate their own greenhouse gas emissions using a national calculator and pay the price.

The other is a processor-level hybrid levy, where money for emissions would be collected by processors. It could be the first option taken up before transition to the farmer-level levy which would cost an estimated $140 million to set up.

A majority of the roadshow attendees preferred the farmer-level option, but that could change as more feedback is gathered.

Advantages to farmers of both options include giving them a continued voice in decision making, giving them a chance to negotiate reductions for vegetation on their land and ring fencing some of the money collected to reinvest in the sector.

Another advantage is that the two options both recognise a "split gas" approach, where the environmental cost of methane - 80 per cent more climate-damaging than nitrous oxide or carbon dioxide but much more short-lived - is calculated differently to that for nitrous oxide and carbon dioxide.

The split gas approach was adopted by the Government in the 2019 Zero Carbon Act, but is not taken into account in price calculations used by the ETS.