From:
9(2)(a)
- Farm Name <[email address]>
Sent:
Friday, 18 November 2022 7:52 pm
To:
Ag Emissions Pricing Consultation
Cc:
[email address]; 9(2)(a)
[email address]
Subject:
Ag Emissions Pricing Submission - by 9(2)(a)
- Farm Name
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Farm Name
To: [email address]
9(2)(a)
CC: [email address]
From: 9(2)(a)
CC: 9(2)(a)
CC: 9(2)(a)
There are a number of reasons I disagree with the government’s proposed methane and
nitrous oxide taxes, these include,
•
I cannot support a policy that will condemn rural communities to a state of
permanent decline. The government’s economic modelling shows that sheep and
beef production will reduce by over 20 per cent and dairy production by around 5
per cent. New Zealand currently already has tourism and international education
sectors suffering the impacts of COVID, while our oil, gas and coal sectors are
seeing less investment also. Rural communities cannot handle major reductions in
agricultural production.
•
New Zealand is taking action to reduce greenhouse gas emissions under the Paris
Agreement. The Paris Agreement states that it aims to achieve low greenhouse
gas development “In a manner that does not threaten food production.” This
statement means that, for agriculture, we should reduce greenhouse gas
emissions by utilising technologies that reduce greenhouse gas emissions without
reducing food production. The government’s proposal will breach the Paris
Agreement by reducing agricultural greenhouse gas emissions via proportional
reductions in food production. We should only price agricultural emissions when
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farmers have access to economically viable mitigation technologies that reduce
emissions without reduction food production.
• Due to emissions leakage the government proposal will increase global emissions.
Generally speaking, trade competitors who don’t operate pasture-based livestock
systems are very sensitive to price. This is because they can easily purchase
more feed and increase production as prices increase. As we reduce our
production, these competitors will increase theirs, replacing our efficient
production with less efficient overseas production. This means that the
government proposal is likely to increase rather than decrease global emissions. A
simple test for any climate change policy should be that it at least reduces
greenhouse gas emissions. There is only one atmosphere.
• The government’s proposal is anchored on an unscientific methane target. The
IPCC suggests that methane emissions need to decline by 0.3 per cent per year to
2050 to achieve stable methane induced warming. This would suggest a reduction
of about 10 per cent by 2050 (not 2030) on a 2017 base year. The Government
however has adopted a reduction target of 10 per cent by 2030. This means that
farmers are being asked to go beyond climate neutrality by 2030 while the
remainder of the economy, through a net-zero 2050 target, is only aiming to
achieve climate neutrality by 2050. Fair methane reduction targets should come
before taxing farmers.
• I disagree with Government statements that a methane and nitrous oxide tax will
result in New Zealand farmers achieving price premiums. New Zealand farmers
are already producing meat and dairy products with very low greenhouse gas
emissions. If a market premium exists, food exporters already have the tools to
access it. Where the government points to a 20 per cent premium for low-carbon
products it needs to be remembered that premium markets often operate a small
scale. While some exporters can differentiate product to access a premium, if all
New Zealand exports were marketed in such a way the law of supply and demand
will mean the premium will reduce (as the supply of low carbon product will have
increased).
• I am concerned that the proposed emissions price is putting the cart before the
horse and putting in place a heavy-handed price to incentivise the use of tools
before these tools are available to farmers. Without tools available to reduce
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greenhouse gas emissions a methane tax will simply force farmers to reduce
agricultural production.
• I disagree with the government’s so-called ‘ETS backstop’. The government has
accepted that putting agricultural emissions into the ETS is not a good policy. It is
unacceptable that the government continues to use this policy option as a threat
towards rural communities. The government must simply work towards positive
policy outcomes and not use things like an ETS backstop as a threat.
• I do not support the Government describing their proposal as a modified version of
the split gas tax proposed by the He Waka eke Noa Partnership. The He Waka
Eke Noa commitment by industry was to “work with government to design a pricing
mechanism where any price is part of a broader framework to support on-farm
practice change, set at the margin and only to the extent necessary to incentivise
the uptake of economically viable opportunities that contribute to lower global
emission”. The Government’s proposal is inconsistent with this proposal by
industry.
• I do not support the Government's proposal as it intends to cut food production in
the middle of a global food security crisis. According to the United Nations World
Food Programme “As many as 828 million people go to bed hungry every night,
the number of those facing acute food insecurity has soared - from 135 million to
345 million - since 2019. A total of 50 million people in 45 countries are teetering
on the edge of famine.”. As a net-food exporting country, it is unethical for the New
Zealand Government to intentionally cut food production in the middle of such a
food security crisis.
• I do not support the Government's proposed pricing of farmers as no regional
social and economic analysis has been undertaken. The impact of this policy will
be disproportionately felt in regional New Zealand. Regional New Zealand is
already suffering from reductions in tourism and government policy to limit
resource extraction (oil, gas, coal). Now is not the time be further cutting the
economic lifeblood of rural communities.
• The Government has claimed that they will secure trade deals as a result of
domestic climate change policies in New Zealand. Yet, despite a commitment to
tax agricultural emissions, New Zealand was not able to negotiate a trade deal
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with the European Union that delivered meaningful outcomes for key agricultural
exports. Australia, a country that doesn’t even have an emissions price on coal,
was able to secure a free trade agreement with the United Kingdom that was
broadly similar to the deal secured by New Zealand. Unlike New Zealand,
Australia has also secured a deal with India. It is hard to see any evidence for the
improved trade policy outcomes promised by the Government as a result of their
domestic climate policy.
I recommend the government policy is changed in the following ways:
• The policy must be anchored on a scientific and warming equitable target for
methane emissions. The best way to do this is to stick with the goal of New
Zealand reaching climate neutrality by 2050. For carbon dioxide this will mean the
current net-zero by 2050 target. For methane this requires a 10 per cent reduction
by 2050.
• Should a pricing mechanism be needed to achieve a 10 per cent by 2050 target it
should be set at a rate that does not result in reductions in food production, avoids
negative economic impacts on rural communities and supports the uptake of new
mitigation technologies. While farmers do not have access to cost-effective
mitigation technologies, this tax should be kept at a low-level and aimed at
supporting investment in new research.
• Farmers must be able to access the technologies they need to reduce emissions.
Farmers are always told that climate change is the most pressing global issue of
our age. It is therefore odd that we are also told technologies like gene editing
can’t be used because overseas consumers may not like it. I believe it is not
acceptable to on one hand demand farmers take action to reduce emissions but
with the other hand deny farmers access to the technologies available that would
allow them to reduce those emissions. The government needs to liberalise rules
related to genetic modified organisms so that farmers can utilise new pastures that
reduce greenhouse gas emissions.
• The New Zealand Emissions Trading Scheme (NZ ETS) should be expanded to
include all relevant sequestration that is occurring on farms. It is not good enough
to not recognise farmers for the emissions they are sequestering because it
cannot be counted in the national inventory. Emissions inventories and emissions
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targets are a means of getting action on climate change and should not be treated
as an ‘end’ rather than a ‘means’. Expanding the NZ ETS to include sequestration
such as shelter belts, woodlots and riparian margins would show that the New
Zealand Government is interested in fighting climate change, and is not just
interested in being seen to be fighting climate change.
Kind Regards
9(2)(a)
© Feds Submission.
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