Written by Murray Ward, The Dominion Post, 27th July, 2012:
The recent government Emissions Trading Scheme (ETS) announcement delaying the inclusion of agricultural emissions and responses from opposition politicians and commentators was so predictable.
It has happened in the past and is destined to repeat itself over and over again. Climate change policy will be another political football in the next general election. Nothing will change and all New Zealanders are the poorer for it.
Some simple facts sit behind this. First, the battle has raged for more than a decade now between farmers (and their associations) and any government (and its supporters) threatening to force costs on to farmers for their biological greenhouse gas emissions.
Second, the position of the Government and farming lobbies has some legitimacy. New Zealand would be the first country to pass costs on to its farmers for these emissions, to their competitive disadvantage, while farmers in Australia are being financially supported to undertake on-farm actions to reduce greenhouse gas emissions. Can anyone seriously expect that New Zealand farmers should accept costs while Aussie farmers get incentive payments?
Beyond these headline points, there are other reasons why the ETS mechanical is not the right tool for this job now. Let’s just say that some officials convinced overly busy Labour government ministers that this was a good (pure) way forward.
This proved to be a major miscalculation, but it’s unclear that any lessons have been learnt, so we seem destined to repeat these mistakes.
Should New Zealanders care?
Opposition commentators will raise the spectre of multimillion-dollar costs to the taxpayer, but this argument can’t be sustained. The argument carried some water in the Kyoto Protocol first period from 2008 to 2012, but that is nearly over and its unclear what international policy will come beyond 2012.
Moreover, the net costs to the economy (the taxpayer) should only ever be based on the difference between our actual emissions and the emissions’ we are allowed, given whatever target New Zealand takes on in an international agreement.
Its not a proper reflection of the facts to do the economic cost sums on the basis of the total emissions.
It is from this point that the real issue emerges. There is a real benefit to taxpayers for the agriculture sector to reduce emissions, and this is true for every tonne of emissions reduced. What we need is a policy framework that positively encourages emission reductions.
The benefits of such a framework will beyond just the direct financial savings of lowered emissions. Instead of the angry standoffs and resistance to policy by farmers, we could have a situation where farmers are actively seeking low carbon solutions, and incentive payments as their Aussie counters are.
One way forward is to ignore for a while the question of the ETS and work instead to strike a grand bargain between all parties and the leadership groups within the rural sector. This approach could align what’s happening domestically with the pressure to calculate, report and improve the environmental footprints of their products that New Zealand’s agricultural exporters are facing internationally. It also needs to be provide something that doesn’t exist now and that both farmers and green innovators constantly cry out for – investment certainty. The current Government has not provided with this week’s ETS announcements.
How could this work? Through its leadership groups, New Zealand’s agriculture sector would make voluntary commitments to reduce footprints of carbon, nitrogen and water use.
Because such commitments are quantitative, they provide a basis for an internal market in these reductions: credits for additional on-farm actions that help the overall sector meet its goals. While these commitments are voluntary, it would be expected that these would be met and they would be subject to measurement, verification and reporting.
Independent leadership groups such as WWF, Pure Advantage and the Carbon Farming Group can play a role here, and be important players in the grand bargain.
Such a policy environment would support a new lively marketplace for the technology and system providers to bring solution to market.
Isn’t this what green parties ask for? Isn’t real and demonstrable investment on the ground a better basis to support New Zealand’s clean green image than whether or not we will ever tax farmers for their emissions?
All New Zealanders should support this. Wouldn’t it be great to have this climate change matter removed from the list of contentious issues to be debated in the 2014 election, and put to rest for a longer while?
Murray Ward is a climate change policy expert advising international governments, institutions and development banks.