Farmers would be ripped off

New Zealand farmers need to focus on the big prize of agricultural emissions sequestration, not the crumbs, Terry Brosnahan writes.

In Business6 Minutes
Steve Cranston

New Zealand farmers need to focus on the big prize of agricultural emissions sequestration, not the crumbs, Terry Brosnahan writes.

Environment consultant and farmer Steve Cranston said forget about the riparian plantings and shelterbelts, focus on the additionality clause. It has been missing from the discussion.

“That is where farmers are getting absolutely hammered.”

Cranston said He Waka Eke Noa (Primary Sector Climate Action Partnership) and the Government’s ag emission plan weren’t that different.

“When it all boils down they are the same.”

He agreed with the Climate Change Commission that little bits of sequestration would be more costly to administer than provide value to farmers.

“Nobody is talking about the additionality clause.”

If a farmer has a big 200ha block of regenerating native bush, to get credits it would have to be fully fenced and carry out pest control work. The credits are for only the additional management. If there was 6 tonnes/ha of carbon sequestered and it goes to 6.5t/ha, the farmer only gets paid for the half tonne.

“A lot of people haven’t worked that out yet and farmers are going to be ripped off.”

All of the regenerating bush can be included under Intergovernmental Panel on Climate Change (IPCC) guidelines, he said. Farmers are missing out because of the Government’s strict interpretation of the additionality clause.

Cranston also agreed with the commission that farm sequestration should be in the emissions trading scheme (ETS). It brings outside funds into agriculture.

The joint sector statement on ag emissions changes everything, he said. The sectors were saying the targets were wrong but had accepted them. Now farmers are not letting them accept them. Industry groups are now actively advocating for a change in targets.

Cranston has been saying for some time putting pressure on the Government to change the targets should mean no price on methane.

All the industry groups are accepting a science-based target using the GWP* which would form the targets, 80% of farm emissions which farmers are on target with. It could make a reduction target of 3% a decade, not 10%. That means there probably wouldn’t be a price on methane.

“If methane is not adding to warming then there probably wouldn’t be a price.”

Cranston said that would only leave nitrous oxide in either He Waka or the Government’s scheme. With methane and 80% of the revenue gone, he asked how would either scheme be funded?

“How are we going to fund this big, convoluted scheme with only 20% of the emissions?”

That’s why sequestration should be in the ETS otherwise a price would be set to pay for the sequestration, he said.

The biggest issue for Cranston now is not the difference between the two schemes but how they would be funded if the sector groups are successful in advocating for the targets to be changed. There was $60 million in administration costs, $70m for sequestration and there was research to pay for. It would all have to come from a nitrous oxide levy.

The question would be why it was so costly with only nitrous oxide to fund it.

“The whole thing will have to be ripped up and they will have to start again.”

Cranston said He Waka excluded carbon forestry conversions from their modelling, but the Government included them and told farmers.

“It was very transparent with its modelling.”

That’s why the Government modelling looked terrible.

“Half of He Waka’s emissions reduction was from conversions to carbon forestry which wasn’t counted in their economic modelling.”

Cranston said it was the conversion that dropped the emissions as farms were destocked. Most carbon forestry would be used to offset other industries, not farming.

He said the Government acknowledged that conversions are influenced by the emissions price. The pull of high land prices due to the carbon emissions price and the legislation making it unprofitable to farm would force farmers to sell.

The National Party hadn’t worked that out yet and were still backing the original He Waka proposal. Add the carbon forestry back into He Waka and it was the same damage as the Government’s proposal.

Cranston has recently decided to stand as the Waikato candidate for Matt King’s Democracy NZ party to fight carbon forestry. He doesn’t believe it will be solved through advocacy but by putting pressure on political parties.