Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
Consultation Event Feedback Template
Instructions:
• One template is to be fil ed in per consultation event and provided to Allen + Clarke following each consultation event for
inclusion in the overall analysis. In the first instance, the primary audience is Al en + Clarke, who wil focus thematic feedback,
but these wil also serve as our primary record/notes for each session.
• Use the prompts provided as suggestions to capture as much information as possible. However, you do not have to answer
every prompt, and can vary from the specific question if this wil better capture the themes and information provided in the
session.
• Capture as many Q&As as possible in the designated row, and duplicate the row for each new question. If you know that the
question has already come up and been answered similarly, or exists in our FAQs, you can make a call on either not capturing
it or referencing the relevant FAQ.
• Please file here, or email to 9(2)(g)(ii)
if you cannot access the link.
Date:
4 November 2022
Meeting type:
Nutrient Management Tools Online meeting
MfE/MPI staff:
MfE- Martin Workman, Jessica Bensemann, Hannah Steans, Angela Christensen
MPI- Warren Gray
Number of attendees:
Approx. 9
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Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
Date:
4 November 2022
Demographic of attendees (if Nutrient management tool advisory group affiliates
possible, e.g. farmer, NGO,
Māori, general public):
Prompt
Stakeholder feedback
Emissions reporting
Collectives- the proposal is to start w/Māori col ectives- that section is confusing. It
tries to define too many things at same time. When you piece together it falls in
line w/col ectives that Māori already have formed. Read in bits and pieces w/IRD
Who did attendees think should be
reference as Māori entity as collective, that can be confusing. It isn’t necessary a
responsible for
reporting and paying
collective, might have collective ownership, same as LLC. It points to Māori sector
for
emissions?
taking lead on it, industry might be upset that it’s only available to Māori sector but
What feedback did attendees have on
oh well, Māori sector wil take advantage of it. It does link into sequestration but
the
thresholds set for farms to report doesn’t include everything partnership proposed. Thinking pragmatic reasons for
emissions?
that but comes down to systems in place like remote sensing, satellite imagery to
simplify monitoring/auditing of what’s on ground or the burden falls on farmer.
What did attendees believe would need Testing w/ riparian is good start, it pushes back on commissions advice but it does
to be in place to
include collectives in combine sequestration proposal w/collectives and it puts Māori in a better position.
the pricing scheme?
The proviso in the report is that any member of the collective needs to have
pastoral area/animal system, so can’t join if own 30k of exotic forestry. A lot of
Māori land blocks own that size area. Do you need investment in pastoral system?
Can sequestration be distributed across other members? Dif iculty of not being
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Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
able to fence is dif icult. Nuances around Māori land, not everything is tidy
w/fences around it.
Use of one calculator- is there thoughts to break it down regionally? Kaikere grass
is not very good as it takes longer, can be positive with one calculator but using
Did attendees believe farms will have
trees grown on property for example in Northland, they sequest carbon quicker
the
necessary data for reporting by
than other parts of country. Can it go in one calculator? That would make it easier
2025?
and recognise regional dif erences. Māori land is less productive soil. The high
productive soil was taken from Māori so to run at optimum level of animal
What feedback did attendees have on
production requires a lot more inputs.
registration requirements?
Single calculator was brought in to level playing field. What we didn’t want (HWEN)
Did attendees raise any concerns
about
is 1 farmer using multiple calculators until they get a number they like. Using
reporting and payment timing?
centralised calculator takes that element out. When wil centralised calculator be
introduced? When can we test/use it? Industry would prefer calendar year start (1
July). What is Crown’s responsibility to get this up and running?
If we can get definitive answers to GHG calculator for all its worth, from our
discussion everyone looking to best advantage in moving forward on all of this, so
Did attendees believe there are any
clear decision on that and we can start the ball rolling and make decisions around
opportunities to improve the proposed collectives quickly, that is next big movement.
approach to
reporting emissions?
I’ve been to GHG workshops and used the particular calculator using 20/21
numbers, because at farm level we are going back to 2017 due to destocking to
look at impact. If we already met those requirements, why should we do anything
more and not have any strategic advantage? Giving advice to land blocks and
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Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
calculator, if in place now, it allows for better planning (as we’re dealing
w/biological conditions). Otherwise it’s either destock or play with fertilisers.
Question:
New/thorny questions asked by
attendees
Answer:
[Duplicate this row as needed]
Pricing, revenue and incentive payments
Pricing decision is stil in hands of govt re: whether industry does or does not
achieve outcome. Pricing is used as encouragement to achieve outcomes that are
there.
What’s happening at farm level and modelling- on a couple of farms we’re looking
What
concerns did attendees have
at emissions costs and GHG. What we’re looking at is it takes 2 parcels rather than
around the proposed approach to
whole farm for production area rather than ETS area. We can recognise signals
setting levy prices?
better under ETS rather than pricing and ministers to influence market there. More
confidence in pricing under ETS. Looking at what can we control/use all systems in
Did attendees offer any
improvements way as better for us as a farm. Concerned about going down to looking at farm as
to the proposed approach to
setting
production around animals, we may not drive animal emissions down as we might
levy prices?
have good offset in another space. Make sure driving animal emissions down in
such a way and give good signals going forward. No confidence in govt structure
w/ministers involve. Too easy to influence. What farmers can control more wil give
more confidence than someone else in control. Also, overseas farmers in Europe,
they are not going to follow the govts push to ETS. Concerned NZ is meeting
obligations and we are going to be so far ahead for being good, no value wil be
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Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
achieved. Unless it can go to farmers to make good decisions. More concerned
about other farmers around the world than what’s going on here.
What feedback did attendees have on
the proposed
revenue recycling
strategy?
What did attendees think about an
advisory board for revenue
recycling?
On average GHG on farms methane is 80%. So 36% reduction avg in 2050 that
wil translate to reduction in Nitrous Oxide but key is nets (net 0). There are
What
transitional support did
technologies to reduce gross Nitrous Oxide emissions ie Breeding, genetics,
attendees say was needed?
inhibitors, inoculants. It is a target. Net 0 arguments out there are not just farm
level but supply chains etc. Costs to get there is a good point. There wil be
What approaches did attendees support offsetting stil involved in getting close/down to net 0.
for
incentivising mitigation practices
or technologies?
That wil be commercial choice if you want to pay appropriate price for that
offsetting because it could be in your bank acct or price to stay in animal business.
What
mitigation practices or
Methane on top of Nitrous Oxide. There is a cost associated with that – reductions
technologies did attendees think
flow straight to bottom line of the animal business. Those two issues alone wil
should be
supported by an incentive
make it challenging going forward unless we can crystalise rules sooner so
payment?
choices can be made. We wil get to a clif if we don’t do it soon. It’s a journey
we’ve shared together but where is the end point? Knowing cost sooner rather
than later is important.
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Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
I’m also involved in forestry, upper levels of LUC. We’re micromanaged on that as
well in terms of opportunity there. Options are being minimised for Māori
landowners. How is best way to cut to chase?
Question:
New/thorny questions asked by
attendees
Answer:
[Duplicate this row as needed]
Pricing carbon sequestration and nitrogen fertiliser
What feedback did attendees have on
the proposed approach to
carbon
sequestration? What
barriers did attendees raise to
Of set sequestration is an opportunity cost, this would be a high cost until get to 0
including new categories of
target. We are fooling ourselves in terms of looking at Nitrous Oxide getting to net
sequestration in the NZ ETS?
0. Substituting sequestration for it is another form of income being sacrificed to
stay in animal business.
Did attendees have any
concerns
about bringing
on-farm vegetation into
a farm-pricing system?
Did attendees prefer
pricing nitrogen
at the farm level or at the processer
In terms of nitrous oxide, if price has come down to 0, then it is a non-issue so
level? Why?
issue is around achieving end goals, getting those down to 0 as quickly as
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Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
possible. The less official players that wil fall by the wayside in terms of moving
forward, if that is enough to meet goals I don’t know.
Question:
New/thorny questions asked by
attendees
Answer:
[Duplicate this row as needed]
Future enhancements
Did attendees prefer a
tradeable
methane quota? What benefits did they
cite?
What concerns did attendees have
about
tradeable methane quotas?
What concerns did attendees share
about an
interim processer-level
levy?
What
alternatives to an interim
processer-level levy did attendees
share?
New/thorny questions asked by
Question:
attendees
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Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
[Duplicate this row as needed]
Answer:
Impacts and support
How did attendees believe the system
would
impact them?
What
support did attendees believe wil
be needed?
What impact did attendees think the
pricing scheme wil have on their
communities?
How can
rural communities be
supported?
Māori sector has range of operations (bigger blocks w/advisors/tech- 20%) but a
lot at middle/bottom end in terms of size/efficiency. You are doing modelling
Did attendees share specific
impacts
w/GHG and some are inefficient operators. With right level of support you can get
for Māori?
farms w/ major reductions in GHG and better bottom line but it requires
coordinated support given many farms don’t have the infrastructure. This brings
How did attendees think the
Crown
me back to collectives and in particular those in a rohe. Collectives could grow. If
should
protect relevant
iwi and Māori
we put threshold across rohe, 3-4 times the numbers that could join these
interests?
collectives. Process needs to follow to get them to join (rural support/ etc) tapping
into that and increasing size of current collectives. Te Arawa is incorporated society
and so there is a mechanism there that can be expanded. Māori sector is
integrated and communicated strategy across regions so Māori position is clearly
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Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
articulated to the government. Right now there is guess work around constraints,
what does it mean on the ground? Expanding collectives role in this would be
useful going forward.
Why is NZ rushing into it when other countries aren’t? We have the smallest
footprint in the world. We need to think carefully around how production wil impact
NZ (sheep/beef/milk). Also governed by Māori Land Act so we have protection
around ourselves. There are provisions that say how we can /can’t operate, we
push that to the limit. If we are going to lose land because some people won’t be
able to meet pricing that’s put on us, what happens then? To them? We are a
collective. What happens if those people that can’t meet targets that we have to
meet? Extra tax? Ability to pay levies is a concern. This is going to put people
under pressure. Small farms are already under pressure. Hasn’t been taken much
notice of this in this whole exercise.
Unintended social consequences could be massive. Ag sector well-being impacts
is not good. People know they need to change, it’s the rate, confusion, lack of
tools- this could have massive impact where there is a lot of Maori/marginal land
and they are doing their best to make money for their whenua. None of that has
been addressed.
Farmer told him 550 cow dairy farmer is going out of production- he’s had enough,
he’s only in early 50s. This regulatory stuff is driving him, he’s not a farmer now, it’s
turned to policy. The stuff is so heavy he’s had enough. Farmer last year
committed suicide. That is how these impacts are happening and that is only part
of wedge. Mental health and farming is very low at the moment.
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Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
We don’t want this to happen to our people. There is enough happening with them
and other things. This land thing, it’s our turangawaiwai more than anything else,
the thought we could lose it would bring another level of disruption to our people.
Point made: Modelling used- Did MfE or MPI compare this with modelling impacts
of LUC and targets w/existing carbon pricing alone? Price of levy in place versus
what is already occurring i.e. in ETS. Is it that it’s a point in time model ing so
introduces shock in 2030 and using price estimate at the time, and it doesn’t take
New/thorny questions asked by
out totally the impact of ETS and high carbon price. In 2030 with that shock what
attendees
would occur: that is how you see dramatic revenue drops and land use change.
How much is in train already in model given carbon price of 30$ versus methane
[Duplicate this row as needed]
price of 4$. Have concerns around how much weight to give to modelling.
Was macro modeling done in terms of the economic fallout of drastic LUC- what
does that do for export numbers and the national economy?
Implementation, verification, compliance and enforcement
What feedback did attendees have on
the proposed
governance structure?
What did attendees think should be
included in the post-implementation
review in 2030?
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Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
What feedback did attendees have on
the proposed approach to
monitoring
and verification?
Did attendees support a
government-
run or third-party verification system?
Why?
Who did attendees believe should
fund
the
administration of the scheme?
Did attendees have feedback on the
proposed approach to
cost-recovery?
Question:
New/thorny questions asked by
attendees
Answer:
[Duplicate this row as needed]
Other/General
Relevance on the global scene- why do we want to be first with the rest of the
world is dragging the chain? Govt needs to keep their finger on the pulse.
Did attendees have
any other
feedback on the proposals?
Other point is leakage. Table 9 in doc on leakage has been referred to by industry
not in way it was intended but pointed as why is government doing it if there is all
this leakage? What section doesn’t say and this is point that would be useful to
clarify, it assumes there are no changes in market demands/requirements. Some
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Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
of biggest buyers of product are making demands (message to Fonterra ie farmers
reducing footprint) so there wil be requirements. Understand point of NZ GHG
contribution global y, but if we are talking about survivability of our economy,
primary based, then we need to understand markets wil place demands on us to
demonstrate we are on low emissions pathways. Not defending government policy
but market requirements/regulations ‘trump’ regulation easily. Farmers are good at
responding to market signals but if we look at these proposed regulations as
something we need to think not just for compliance but to position ourselves to
produce low emission products that our buyers want. Nestle, GSB, now invest/own
plant protein. They know market /consumer demands are shifting.
Question:
New/thorny questions asked by
attendees
Answer:
[Duplicate this row as needed]
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