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 Al en + 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:
Ag Emissions Pricing Consultation: Ag Sector famers & growers group Hamilton
MfE/MPI staff:
MPI: Hannah McCoy, Claudia Gonnelli, Kate Simpson, Jenni Vernon, Charlotte Denny
MfE: David Mead, Hamish Slack
Facilitators: Dinah Vincent,
Number of attendees:
21 participants
1
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 Farmers and growers
(if possible, e.g. farmer,
NGO, Māori, general
public):
Prompt
Stakeholder feedback
Emissions reporting
• Need to enable wider groups (eg. Catchment groups) to form collectives, to
create more opportunities for the communities to get together and use some
Who did attendees think should be
farmers are leading examples. This would allow farmers to generate more income
responsible for
reporting and paying
from better land and retire less productive
for
emissions?
• Some farmers claimed that other Māori participants argued that they would
like collective for everyone so that they can pass knowledge and resources.
What feedback did attendees have on
The current proposal was almost an insult.
the
thresholds set for farms to report
• Enabling collectives wil al ow us to socialise the issue across the
emissions?
community
What did attendees believe would need
• Concerned and insulted that collectives not enabled for everyone
to be in place to
include collectives in
• Concerns with trying to design a one size fits all system
the pricing scheme?
• Accounting at a national level vs an international level is fundamentally
dif erent
2
Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
Did attendees believe farms will have
• There were repeated suggestions that the starting date should be
the
necessary data for reporting by
postponed until the levy system is right. Suggestions to use the Waka Adrift
2025?
model and start very simple.
What feedback did attendees have on
• Suggestions that if we get this wrong it wil prevent the rest of the world from
registration requirements?
trying a similar measure.
• Getting the settings right- right now it is very cumbersome regulatory
Did attendees raise any concerns
about
system. We need something that has a light regulatory touch that achieves
reporting and payment timing?
the targets
Did attendees believe there are any
opportunities to improve the proposed
approach to
reporting emissions?
New/thorny questions asked by
attendees
[Duplicate this row as needed]
Pricing, revenue and incentive payments
• There were concerns about the one-size –fits all approach to the levy (e.g.
What
concerns did attendees have
dif erences in extensive and intensive farming) there was discussion of a
around the proposed approach to
dual approach for these sectors.
setting levy prices?
• Desire for low regulations
• There were concerns about the setting of targets, and how these wil be
linked to the price.
3
Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
Did attendees offer any
improvements
• Concerns with linking the ETS price for long lived gases
to the proposed approach to
setting
• Pricing can’t be politically operated and run.
levy prices?
• Concerns that the start point for pricing wil be overcooked
• HWEN original proposal was about raising the right amount of revenue to
drive incentives. For government, the targets are the priority- everything
else comes secondary to achieving the targets.
• Need to get the settings right- are we trying to go to fast with this? Need to
pause- strip the cost out of it- and make the settings right
• Careful that we do not have unintended consequences of the price settings
• The settings are wrong for incentivizing the right behavior
• ETS as a financial instrument has resulted in deadland- need to avoid this.
• The ETS is a financial product- it doesn’t achieve anything else. Need to
avoid that for this policy.
• The Government has to accept that there are some issues with the climate
change budgets
What feedback did attendees have on
the proposed
revenue recycling
strategy?
• Concerns about whether the pricing of the policy is going to see money go to the
government or back to the sector.
What did attendees think about an
advisory board for revenue
recycling?
• There were questions on how mix-used farm wil be able to receive
What
transitional support did
transitional support or it would be just for single-use farm (eg. Only sheep
attendees say was needed?
and beef).
• Suggestions to look at the HWEN hybrid option for it.
4
Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
What approaches did attendees support
• Major concerns about the lack of available technologies
for
incentivising mitigation practices
or technologies?
What
mitigation practices or
technologies did attendees think
should be
supported by an incentive
payment?
• Lots of discussion about dif erential pricing and transitional support.
New/thorny questions asked by
• Some thought transitional support is needed for mixed farming systems
attendees
• Some were vehemently opposed to “cross-subsidization”/ transitional
support
[Duplicate this row as needed]
• Some noted the need to balance transitional support with a just transition
• Agreement that there should not be dif erent prices for dif erent sectors
Pricing carbon sequestration and nitrogen fertiliser
What feedback did attendees have on
• Biodiversity credit should be incorporated and more areas should be
the proposed approach to
carbon
recognised (e.g. woodblock and wetland).
sequestration?
• If permanence is also important, shelterbelts should also be recognised even if this
would mean less flexibility
5
Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
What
barriers did attendees raise to
• Participants stressed the importance of additionality and being able to count it
including new categories of
against international targets.
sequestration in the NZ ETS?
• There was some uncertainty regarding the expected rates of sequestrations and
on what were the numbers based.
Did attendees have any
concerns
• There were conversations about the appropriate baseline year to start recognise
about bringing
on-farm vegetation into
sequestration (some participants talked about WWII and 80s) as well as the need
a farm-pricing system?
to not enable “grandparenting” by other participants
• There were concerns that the price of the ETS wil drive the price of long-lived gas
emissions up (as linked to fossil fuel consumption), while the food system should
have a separate system.
• Questions on how organic fertiliser could be audited and calculated, as well as the
repercussion (it would increase emissions, as currently not reported).
• Shelter belts are permanent solutions for a lot of people- ruling this out
means lots of people wil miss out.
• There were concerns that throughout the case study process and HWEN
consultation, farmers were accounting for all sequestration. That is now
misleading, as farmers wil think they wil be able to account for more than
they can.
• Concerns with the concept of additionality and how this is set and measured
• Needs to be built in so there is flexibility of the land over the long term
Did attendees prefer
pricing nitrogen
at the farm level or at the processer
• Auditing organic fertiliser is going to be a nightmare
level? Why?
New/thorny questions asked by
attendees
6
Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
[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?
Question:
New/thorny questions asked by
attendees
Answer:
[Duplicate this row as needed]
7
Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
Impacts and support
How did attendees believe the system
• They believe that there wil be distortions, similar to those due to the ETS
would
impact them?
(with farmers sel ing to forestry). And that there are already distortions just
from knowing pricing may happen
What
support did attendees believe wil
• Concerns with being time poor
be needed?
• If farmers lose their market share they are out- concerns with this
• Major concerns regarding how this pricing wil impact rural communities.
• Concerns for future generations, and whether they wil be able/ wil want to
farm
What impact did attendees think the
• Concern about people in rural communities- it has been a top down process
pricing scheme wil have on their
with COVID in between, tried to design something that is everything for all.
communities?
• Concerns about the future of sheep and beef farms- and that they wil see
How can
rural communities be
this as an opportunity to get out
supported?
• Concerns that the with complexity of the ETS- and costs of consultants- will
be replicated
• Concerns with meat works shutting down and the flow on impacts- where
wil you send meat? Wil this have animal welfare concerns?
Did attendees share specific
impacts
• Questions on why iwi were not involved in farmers workshops.
for Māori?
• Recognition that Māori ownership structure is very different and require special
consideration.
How did attendees think the
Crown
• It was understood that while this would create dynamic shifts in all communities,
should
protect relevant
iwi and Māori
Māori wil be more affected.
interests?
• Suggested that there should be a 3-way governance” Government, farmers, iwi.
8
Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
New/thorny questions asked by
attendees
[Duplicate this row as needed]
Implementation, verification, compliance and enforcement
What feedback did attendees have on
the proposed
governance structure?
• Trust- an open transparent process is needed for the science.
• The governance structure has government holding onto the funds without
What did attendees think should be
industry leadership
included in the post-implementation
• There must be trust in the system.
review in 2030?
• It was pointed out that audit and verification would be hard and that neither
What feedback did attendees have on
NAIT or farm accountants could do it.
the proposed approach to
monitoring
• It was argued that models for farm planning were not good, because people
and verification?
making the decisions day to day, were not the one making the plans or consult
them. The system needs to be user friendly, usable with by the staff.
Did attendees support a
government-
• Increase farmers’ buy-in wil reduce cost of audit.
run or third-party verification system?
• Lots of ways that farmers can cheat the system. Some inputs are verifiable,
Why?
lots are not- i.e. stock reconciliations. Concerns whether farm accountants
can monitor and verify information as they use the information that has been
given to them.
9
Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
• Concern with compromising NAIT- i.e. animal traceability. It wil encourage
farmers to not comply with NAIT
• Concerns with frequency and other policies. One farmer noted that they had had 6
audits in an 18-month period. Farmers are time poor and this wil add to the
burden.
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
• There was a question of how the inventory calculate emissions. It was
Did attendees have
any other
argued that the methodology only took dry matter into account hence
feedback on the proposals?
limiting the incentives to uptake mitigation. Other participants pointed out
that dry matters account for 80% of the calculation, with 20% being
influeable with mitigation technologies.
10
Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
• Farmers suggested the creation of an environmental fund and emphasised that the
levy would leave them with less funds to fund environmental management and only
New/thorny questions asked by
left de-stocking as an option to reduce their bil s.
• Increase in costs could prevent people from investing and diversifying their
attendees
farm. It was suggested that we only raise enough revenue to incentivise
[Duplicate this row as needed]
change of behaviours.
• Questions on why the target were set up as the main driver of the price
(ignoring communities)
• Lots of discussion about meeting the obligations of multiple policies, all of which
are coming at once.
• Lots of concerns with the science- i.e. DMI as a key factor of methane production,
recognising the recycling of gases- i.e. carbon cycle.
• Lots of discussion about preferring the HWEN hybrid option- waka adrift option
• Need to ensure that the early adopter is not penalised, in order to support
the new farmers
• Where wil the end point be?
• Farmers argued that the international market wil not pay a premium for low
emission products.
• Concern with how this wil be perceived by the international market- don't
want to send everyone down the wrong track
• Lack of trust and need for more sound science to avoid unintended
consequences.
11
Al en + Clarke
Agricultural Emissions Pricing Consultation – The Ministry for the Environment and the Ministry for Primary Industries
• Some of the language (eg. Rural communities impact on Discussion
document) was perceived as insulting.
• Need to reduce the administration cost of the proposal and target fossil fuel leakage
• Need for macro-economic model ing.
• The best way to get long term sustainable incomes was to use the best land
and retire the not so good land. The trick is to generate more income from
the good land, and retire the other stuff
12
