At times I despair at the GHG (greenhouse gases) debate in New Zealand. There are multiple teams firing firecrackers masquerading as missiles into the debate, thereby creating noise but little substance.
Here my focus is on the agricultural gases, methane and nitrous oxide, for which the Government has recently released a discussion paper outlining its preferred pathway for taxing agricultural emissions. The discussion paper also asks questions and seeks responses as to the specifics of the plan.
This latest Government paper has created outrage within the rural industries. The Government must surely score a zero for the way in which its messaging has been managed. Quite simply, the Government stuffed up mightily in relation to the messaging that it put around the proposals, and has been shocked by the consequent reaction.
The key message received by the sheep and beef industry is that they will carry the main burden with 20% loss of production, perhaps by 2030, and with profitability damaged greatly for those who survive.
Agriculture Minister Damien O’Connor has said that the 20% figure is based on just one set of assumptions and he does not think the industry interpretations of the report are correct. This illustrates the extent of the communication foul-up.
Ironically, the Government proposals align closely with the He Waka Eke Noa (HWEN) proposals put forward by the rural industries. The two important aspects where Government demurred were the specifics of how sequestration rules could be improved and who would be responsible for emission-pricing decisions.
The Government proposals contain constructive elements relating to sequestration and how existing weaknesses could be addressed. I have been arguing for such proposals for many months but industry partners had told me it would not happen. Well, the Government has indicated a clear willingness to move, which is a significant win for farmers. However, this was all lost in the noise created by the messaging stuff-up.
The key modelling paper that Government relied upon within their overarching messaging is what I have described to colleagues as the most incoherent Government modelling paper I have ever seen. One of my friends, who has extensive experience of interaction within the Government bureaucracy on these and related matter, described that paper to me as a ‘castle built on a cloud’. I like that description.
This key modelling paper was prepared by staff from Landcare Research using assumptions provided by MPI. It contains approximately 120 pages of detail from which the correct big-picture never emerges. The scientists who wrote the paper, the MPI folk who provided the modelling assumptions, and the officials who then organised the material for the Cabinet paper, may all be able to claim they did their job faithfully. However, the outcome is a total mess. This is what happens when there are lots of ‘details people’ in the mix but no ‘big-picture integrator’ conducting the orchestra.
I pondered whether I would try within this article to explain more about the Landcare Research paper that derailed the Government messaging but my initial attempts led only to my own despair. It wasn’t possible to unscramble the egg.
Over the last year, I have written many articles about various aspects of greenhouse-gas issues and I have received lots of nice comments about the understandings I have been trying to communicate. However, I have also upset some leaders and perhaps others within the rural industries.
For example, although I have supported an HWEN split-gas structure as much preferable to agriculture being within the Emission Trading Scheme (ETS), I have also been forthright in identifying fundamental flaws within HWEN. Some of the industry partners have not liked that.
The reality is that the HWEN documents were shaped by 11 industry partners who were at odds among themselves. In among all of the horse-trading, they lost sight of fundamental principles. Some of the industry partners have not taken kindly to having HWEN deficiencies pointed out and there have been some interesting phone calls.
I have also come in for criticism from some farmers who think that agriculture should not have to account at all for its emissions. Ironically, some of these people have used a limited understanding of what the science does and does not say to then suggest that people with different perspectives to their own are ignorant. That makes for a hard policy environment in which to move forward.
It is not only the rural industries that are struggling to put forward coherent policies. There is diversity of view on both sides of politics, and the level of understanding in both major parties is not high.
In finding a path forward for Aotearoa New Zealand, the starting point has to be to find overarching points of agreement. My own perspective is that there are two overarching principles on which, with some perseverance, it should be possible to achieve consensus, if not unanimity, across both major political parties and also within rural industries.
The first principle is that primary industries in general and pastoral industries in particular are fundamental to New Zealand’s economic wellbeing.
This principle rests on the reality that primary industries comprise more than 80 percent of New Zealand’s physical export earnings. Pastoral industries make up some 50% of these total export earnings. In terms of how New Zealand will pay for all of the imports that it needs, there is nowhere else to go.
It is more than 40 years since the sun was supposedly first setting on New Zealand’s agricultural industries, but that same sun keeps popping up again and that is just as well. It makes perfect sense to those who understand the principles of both comparative advantage at a country level, and competitive advantage at the level of individual firms and industries.
Let me also put to rest the notion that New Zealand agriculture will ever shift to being predominantly crop-based. For anyone who understands the climate, the topography, and the soils of Aotearoa New Zealand, that notion is ridiculous. Nature designed New Zealand to be a land of trees and grasslands, not crops. The percentage of New Zealand soils with the climate, topography and inherent fertility to support a crop-based agriculture is very small.
The second overarching principle is that New Zealand does have international commitments to do whatever it can to reduce its greenhouse-gas emissions. These commitments cannot be ignored. But that does not mean that New Zealand has to be the first country to destroy its most important export-earning industries.
No other country in the world is considering going down a self-destruction path for mainstream industries that underpin that nation’s fundamental economic wellbeing. It is not happening and it is not going to happen elsewhere in the world.
If we can reach a consensus on the above two principles, which is not quite the same as requiring unanimity, then there is a pathway ahead towards good economic and greenhouse-gas policy.
Entry to the path requires acknowledgement that agriculture needs a focused programme of RDE&E (research, development, extension and education) that reduces the emission intensity of pastoral products. The levies on agriculture should be no more than is required to fund that program.
In discussions with HWEN partners and also some people close to Government, I have found there is agreement that this should be the path forward. Yet remarkably, this is not laid out anywhere within either the HWEN documents or the Government proposals as the basis both for pricing and for action.
Yes, there is mention of R&D and the recycling of levies within the industry, but there is no mention of the levy being set so as to operationalise an agreed RDE&E programme, and with this agreed programme being the driver of what the levy needs to be. Instead, Government and HWEN are at odds about who will make the levy decision rather than focussing on the principles of how the levy will be set. I have run some numbers and the levy would not need to be large.
When I started writing this article, in the back of my mind there was much more I wanted to say about the points I have made here. But that must wait for other articles. In any case, it is always best to focus first on the foundations, to make sure that the castle is not being built on a cloud.
So, can we agree that the overarching principles are that pastoral agriculture must remain vibrant and prosperous, and that we do have international commitments to do whatever we can to reduce greenhouse-gas emissions consistent with maintaining a vibrant pastoral industry? And can we agree that the journey starts with defining the RDE&E needs, and then setting a farm-based levy in relation to that agreed programme?
*Keith Woodford was Professor of Farm Management and Agribusiness at Lincoln University for 15 years through to 2015. He is now Principal Consultant at AgriFood Systems Ltd. You can contact him directly here.
55 Comments
I'm gonna call it what it is : not only the worst government in NZ history , but the worst minister of agriculture too ... that's not a personal reflection on him , I'd reckon Damien would be an great companion at the pub or at a BBQ ..
... but ... he hasn't got the farmers' back ... he's obediently toeing his Larbour party line ..
Time to arc up Mr O'Conner ... time to remember your roots , and go into bat to serve your industry ...
Farmers will pay the tax initially, but ultimately it's the poor who are going to be the worst off. The irony of all the carbon taxes is that they are levied by progressive governments aiming for social justice, but they have the biggest impact on poor people, people who can no longer afford petrol, cheese, butter, milk and meat. Meanwhile I'm going to fly around Antarctica to raise awareness about climate change.
We should just have a universal user-pays approach to the cost of cleaning up one's pollution. Rather than some getting to socialise the cost onto other folk.
Food security discussions are sometimes rocked out as a justification for allowing folk to pollute and socialise the cost onto others, but if food security is the issue then perhaps the status quo is also not the best way to approach food security; is should be considered in depth as its own issue.
This is my point, a rich user can afford to do anything they want and call it carbon neutral if they have enough money. A poor person is just going to be even worse off. Less access to food and energy. Maybe one day things will flip, healthy foods and electric cars will become the poor persons first choice but right now the taxes are just making everything more expensive which hits poor people the hardest. The carbon tax doesn't even go towards fixing any of that, the carbon tax is going directly into the massive multinational companies that own all our forests which is crazy when you think about it.
Thanks for the update on the reasons behind the confusing messaging from the Governments proposals. I totally agree with your outlining of the two overarching principles under which any rational discussion needs to take place. The natural extrapolation of which is a wait and see policy from our current and future governments. Watching the point scoring at COP 27 is a larger example of trying to gain consensus between competing political and economic agendas. It is for this reason that I think we have no real hope of any accountable global response to climate change. Best to batten down the hatches and manage the current and future catastrophes in house as best we can while keeping paying our bills as a country. There are just too many opportunities for the world’s biggest players to exploit the climate crisis to their advantage. Militarily, economically and politically. A very sad but predictable outcome.
I have come to the same conclusion whaka m. There is zero chance the world will ever be cohesive enough for all countries to agree to stop pulling oil, coal and gas out of the ground. Any large country that keeps using fossil fuels will have an economic and military advantage, so giving them up is akin to surrender. So every recoverable tonne of fossil fuel will be added to atmospheric carbon.
As you say we just need to prepare ourselves as best we can for the inevitable.
Absolutely agree with all of that. With the emphasis on self reliance and sustainability. Replacing the horsepower of our FF driven farm machinery and transport systems will prove more difficult I think. Perhaps we might see a repopulation of the countryside with people who are needed to operate smaller electric/hydrogen driven equipment? Would be a good thing methinks.
At last an intelligent comment. Reading the anti Labour drivel above is a real brain cell killer. The current government haven't got it right, but an incoming National government give every indication of accelerating everything that makes us less resilient and trashing everything that makes us more resilient. When are we going to get a conservative/right of centre party that's not pro extinction is my question? Or are thinking and conservative just not a physically possible combination among political classes?
I think you hit the nail on the head with the first of your over arching principle's, just not in a good way. No there are many individuals and groups in positions of power and influence who do not agree that pastoral agriculture must remain vibrant and prosperous. And they refuse to listen to the 50% of trade income argument, no counter argument given.
Additionally the majority see the 48% ghg from bio as a easy target that will mean if it's reduced that they can do nothing, BAU. Low hanging fruit, that is all, pay the fuel tax, plant a tree, point at the farmer.
redcows,
I did say that getting a consensus on that principle would require some perseverance and there would still be no unanimity. To the extent that I have optimism it is because the counter arguments to the principle are based on misinformation and lack of understanding in relation to the fundamental importance of the agrifood sector. However, at times my optimism about getting a consensus does fade as I get a little overwhelmed by the misinformation and lack of understanding, together with disappointment at the quality of the messaging from within the rural industries themselves.
KeithW
Did anyone listen to Jamie Mackay interview Damien yesterday well worth listening to.
https://www.iheart.com/podcast/53-the-country-28628176/episode/the-coun…
I find it interesting/surprising that this Govt, led by people with qualifications and background in communications and politics keep getting the communication so badly wrong
Issues to complicated for them or are they playing to a different audience whom they assume wont see the problem
It also seems clear that the bureaucrats have their own agendas - which is going to be a problem come election time as many will need to be looking for new work to get the policy programme back on track
Where's the scaremongering? We can see the march of pine trees across the landscape, we know there's no fat in the budget to pay extra taxes. I've seen articles from the likes of Senior Agri. Business Professor at Massey University Dr James Lockhart (who also farms sheep and beef near Feilding) who's modelled the numbers and says his farm wouldn't survive, and Professor Jacqueline Rowarth who says there's some "heroic" assumptions in the modelling including methane reducing feed additives being available for dairy farmers.
Listen to the Jamie Mackay interview above. Saying things like there will be no farmers left etc. Then there is the likes of ACT, who perpetuate the notion that it is possible for us to do nothing. but I think the most damaging one is that the Labour/green govt is simply out to get farmers. not sure what their motive is supposed to be???.Its pretty low brow stuff , but it seems if you repeat something on social media enough ,it becomes fact .The damaging part is that it may become self fulfilling. if a govt is repeatedly told everything they do is a anti farmer, they will probably say ,what the hell , we might as well right them off.
I think the crunch will come when it comes time to enforce the reduction of herd numbers around the country when the reductions in GH gases from science run out. I don’t think the majority of citizens will stand by to allow a reduction in our national income to occur when the rest of the world blithely carries on as is nothing is happening hiding behind empty promises.
Rod Carr on National radio this morning. Methane discussed at the end.
https://www.rnz.co.nz/national/programmes/ninetonoon/audio/2018866123/s…
Keith
If you agree to the split gas approach then there is no warming from sheep and beef's methane because sheep and beef numbers have declined over 30% since the 1980's. If sheep or beef numbers were to increase then fair enough they cause warming but their decline in numbers means their methane is at worst neutral in terms of temperature increases and at best have already contributed to cooling assuming the model is correct.
Maltwix,
It is not quite as simple as that.
Each molecule of methane emitted does cause warming relative to if that molecule was not emitted.
The main reason that sheep numbers declined is that those farms converted to dairy. Most of the sheep farms that remain are carrying more stock and emitting more methane than they would have been back then in the 1980s. So should a current sheep farmer get credit because other sheep farmers converted to dairy?
The split-gas approach relates to separating out methane from carbon dioxide. It was never envisaged as a split-species approach. A starting principle of He Waka Eke Noa, with that term meaning 'we are all in this together' was that the rural industries would not separate out onto a species basis. But that has unraveled somewhat with current sheep farmers looking for credit arising from land-use change that occurred on farms other than their own farms.
KeithW
Keith, I think it's misleading to suggest dairy conversion was the main contributor to sheep numbers declining. If you look at the Canterbury Plains, then many of those conversations were previously mixed cropping/finishing operations.
In my opinion, the discontinuation of the livestock incentive scheme and supplementary minimum prices drove a major shift to improving sheep productivity on a per head basis - fewer ewes producing more. Hence the similar sheep meat export tonnage from 70,000,000 sheep in the 1970s/80s by 30,000,000 sheep in the 2020s.
In the 1990s the sheep decline led to both more dairy and more forestry.
But after the late 1990s, land going out of sheep went primarily to dairy.
Taking Southland, South Otago and North Otago (Waitaki District) as examples, the dairy industry developed very much on what used to be sheep land. However, in the last five or so years South Otago sheep farms have been mainly going to forestry, with Milton the centre of a hive of activity.
In Canterbury, many of the mixed cropping farms changed the animal component (which on most soil types is an essential component) from sheep to dairy support. Most Canterbury dairy farms are on Lismore or similar soils which were never suitable for cropping. Most of the medium and hreavy soils that are suitable for cropping, such as Templetons, Wakanui and Temuka soils, are still used for cropping.
KeithW
We have a dairy farm in Mid Canterbury. On the farms next door. We have 5 cropping farms. All have got rid of there breeding sheep. They would have averaged 4,000 ewes each. It is because it is not economical to have breading ewes and was too much work for the income. All gone into crop. Some lamb fatting in the winter. What stared out because of dairying, then carried on because sheep farming was not economical on irrigated soils in Canterbury
A starting principal for the runaway global warming cult should be is the herd contributing to the runaway global warming hypothesis? Nationally methane peaked in the early 90's.
https://pcep02s1.blob.core.windows.net/cache/5/a/1/3/6/8/5a136842a51fbc…
On a herd basis if we keep to similar productivity gains of the past generation herd will not be adding adding to the warming hypothesis either.
"...Even more strikingly, if an individual herd’s methane emissions are falling by one third of one percent per year (that’s 7/2100, so the two terms cancel out) – which the farmers I met seemed confident could be achieved with a combination of good husbandry, feed additives and perhaps vaccines in the longer term – then that herd is no longer adding to global warming. Yet if methane were included in a European-style Emission Trading System (ETS), the owner of the herd would have to pay just as if it was."
https://www.newsroom.co.nz/ideasroom/a-climate-neutral-nz-yes-its-possi…
NZ Scientists agreed to split gas because biogenic Methane behaves differently to CO2. It is short lived/cyclical. The warming is caused by the total methane atmospheric concentration so if one molecule Methane is added whilst one is oxidised then there is no nett change to atmospheric concentration. The split gas approach acknowledges that providing methane emissions are constant over time then this equilibrium is achieved. Ultimately we must also bear in mind that the animals are merely recycling CO2 from the atmosphere through photosynthesis, they cannot add to atmospheric concentrations.
As it stands HEWEN will destroy 5% of dairy and 20% of sheep and beef how is that "all in this together"?
It was the politicians not scientists that agreed to a split-gas approach. It was a policy decision and not a science decision.
All scientists would agree that ruminant-sourced methane does not lead to increased atmospheric concentrations of CO2. However, scientists also agree that increased levels of ruminant agriculture do lead to increased atmospheric levels of methane.
KeithW
Each Molecule does not cause more warming if the methane concentration is constant. It was constant for hundreds of thousands of years before the 1800's even though animals existed for all of that time. There are plenty of other sources of methane. Anyone looking into those...
Good points Keith and I also despair at the tone and lack of coherent thought process on this from all sides.
I think before we worry about GHG stuff we need to look at whats happening in the industry anyway.
The dryland hill country side does produce a lot of export income but when you drill into the numbers around 40 to 50% of the farms are losing money allowing for a good stockpersons wage to the owner - Beef and Lambs own figures from samples of actual farms when broken into quartiles (EFS). The bottom 30% are losing large amounts and have been propped up by land value increases only.
Alongside this we have a serious demographic problem aligned with profitability. This article sums that up nicely and is something no one talks about publicly but is the real issue at hand. I face this everyday with bankers, accountants, farm advisors and farmers themselves - they dont know what to do.
https://www.farmersweekly.co.nz/its-not-just-trees-scaring-the-sheep-away/
Until we are honest about this issue the rest is a bit academic - I don't blame farmers for being upset about another bill when many are struggling to even survive.
With interest rates rising this is going to get very nasty, very soon for many farmers - I know plenty of bankers very worried for clients.
There is going to be a big revamp in the industry in the next 10 to 15 years simply through economics before we even think about GHG.
I see shearing costs have just been raised by 30% plus around the country - wool prices havnt moved.
Lamb schedule dropping fast and my meat marketing friends are very down beat as their costs go through the roof and high end restaraunts everywhere (here and overseas) cant get Chefs or FOH staff - demographic changes.
The end is not nigh but the strong, resourceful and thinking ones will survive and flourish. The outlook for the balance is not pretty.
"propped up by land value increases only." Have you ever asked yourself why land values are increasing if the farming economics are so dire? And to what end these propped up land prices have on borrowing/economy of scale/succession/farm profitability? We have seen with SMP's what happens when the carbon prop is kicked out.
So this chap Eb admits "Eb acknowledged there are currently few markets paying premium prices for carbon neutral animal protein but said that will change." So he predicts it will change - should I take a punt on paying an extra $10,000/ha for sheep and beef country to out compete carbon bludgers on his prediction carbon neutral markets will change? Do you think that extra $10,000/ha capital and servicing cost will make farming less profitable?
The prominent farming leader with a certified carbon neutral farm didn't wait around for carbon neutral markets to arrive, sold the farm, copious existing farm forest leveled, whole farm planted in pines with credits going from NZ fuel users to a foreign interest. The local young farmers couldn't out compete a foreign conglomerate with Cindy's carbon cash. So real world carbon neutral examples are out there showing Eb's prediction is fantasy. You are also in fantasy land if you don't think artificially bloated land prices don't harm farming profitability.
Im not saying that - the trend has been going on for decades though. I don't disagree that carbon prices are distorting land values - just as dairy land prices distorted sheep and beef land a few decades ago. You can argue that carbon is not a normal market but the reality is its happening around the world and rightly or wrongly is here. Democracys via Governments have placed a value on carbon storage - we can all vote it out but that dosnt seem to be happening.
Just saw a publication from a farming anti HWEN group - in effect they want the ETS expanded to include more vegetation and farmers can sell it to fossil fuel emitters and get money in!! This is expanding and growing the importance of the ETS and is a farming group wanting the cash from it. Equity means you cant exclude many from that option.
Rural land has in many ways just tracked urban land values - in fact you could argue its hasn't kept up with it. Again the drivers for urban value increases can be debated about being real or manufactured but they are real and some will win and some will lose.
Many things can affect markets which may be "manufactured" and this has happened through history and wont stop any time soon.
The article I posted is vague and demonstrates a lot of thinking is not based upon facts but more beliefs - again rightly or wrongly - but a lot of life is done on this basis and all factual evidence is ignored often.
Just saw this - is Fonterra off on a wild goose chase??
https://www.farmersweekly.co.nz/emissions-target-coming-for-fonterra-fa…
It does look like the Ag sector partners simply paid lip service to the idea of a partnership with government to deal with sector emission pricing, then as soon as it was clear that National would likely sweep back into government next year they stopped the pretense and started squealing. Much of the noise seems highly performative.
As Keith points out, the only differences between what was put forward by the HWEN partners and government's modifications made in response to CCC suggestions are sensible, relatively trivial and/or temporary.
But it's probably more of a generational split within the sector itself, with the older generation hellbent on never changing anything, no matter what. And apparently based on the "overarching principle" that - having converted one-third of the country's land area to it - pastoral farming is Too Big to Fail.
Steve W,
Farmers might end up deluding themselves if they think National will align itself fully with their wishes.
National knows full well that the election will be won or lost in Auckland.
The industry organisations are positioning themselves primarily in recognition that first they have to stay onside with their own members.
KeithW
It depends entirely how it's communicated.
If the Greenpeace narrative that farmers produce half of New Zealand's climate gases and everybody else subsidises their pollution takes hold, then of course urban dwellers are going to want methane taxed.
If some more facts are communicated - such as the true warming impact of the methane, and the fact it only needs to reduce by 0.3% per annum to reach zero further warming then some people change their mind.
If we then add in that no other country is taxing methane, the impact on our export revenue, how it will incentivise mass pine planting and cause an increase in total global emissions due to leakage to less efficient producers then I think most people would be opposed, rural or urban.
Good to hear you talk about what "nature designed". Mother nature didn't design an animal to cause global warming. Until we understand the net (not gross) position of carbon emissions from livestock all we will end up doing is creating a department in Wellington that employs another 1000 bureaucrats for absolutely no gain.
Fun fact - nature designed ruminants at 1000 ppm CO2. It is cow cruelty to not get it back to those levels. We help greenhouse crops to get to 1000ppm - why don't we help cows? The CO2 starved crops are gagging for CO2. Do your bit - nature needs you!
"Carbon dioxide starvation, the development of C4 ecosystems, and mammalian evolution
The decline of atmospheric carbon dioxide over the last 65 million years (Ma) resulted in the ‘carbon dioxide–starvation’ of terrestrial ecosystems and led to the widespread distribution of C4 plants, which are less sensitive to carbon dioxide levels than are C3 plants."
https://royalsocietypublishing.org/doi/10.1098/rstb.1998.0198
Thanks Keith, you do a valiant job in a darned difficult area.
I'm not sure you are right about other countries not destroying themselves. From my point of view that is exactly what the entire West is doing. USA, Canada, GB and the EU all seem to be in a politico-economic suicide pact. That may sound like hyperbole but it is not.
Consider what has taken place over the last 30 to 50 years. Manufacturing and productivity has been replaced by financialisation. "Death by China" is really a case of a suicidal rush to get rid of manufacturing in the West. Climate change hysteria has taken over from solving real pollution problems. Energy resources have been neglected and disadvantaged such that the West cannot produce it's own energy requirements or feed itself on nutrient dense food. There is a shortage of refinery capacity in the West.
The sensible people of Asia have benefited enormously from this self flagellation and Puritanism/Everwar policy framework of the West which is rapidly leading to societal breakdown.
Our objective in New Zealand should be to appear to be doing what we are told by our "allies" but all the while looking out for our own interests, building resilience and self sufficiency and focussing on production and productive assets as the basis of a civilised society. The endeavours and values of our forefathers gave us the society we have, which is far better than most. We need to see the climate change brigade for what it is - an agency of colonial oppression by our colonial masters.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.