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Government foreshadows new ETS sequestration categories but then creates yet another communication muddle

Rural News / opinion
Government foreshadows new ETS sequestration categories but then creates yet another communication muddle
Shaky Beehive
Source: 123rf.com Copyright: jovannig

The Government’s on-farm sequestration policy appeared to have taken a big step forward with a media release from the Government on 30 November, apparently timed to coincide with the National Field Days at Mystery Creek. However, precisely where the step has landed is not clear.

The media statement released by the Prime Minister’s Office included statements from Prime Minster Jacinda Ardern, Climate Change Minister James Shaw and Agriculture Minister Damien O’Connor.

A key reason why things are less than clear is that once again the Government’s communications messed up in a big way. Remarkably, there were two different versions of the media release. One of these was released to media by Andrew Campbell in his role as Chief Press Officer in the Office of the Prime Minister. This was the version I was working with when I first drafted this article. The other version is what can currently be found here at the Government’s official Beehive website (beehive.govt.nz)

At the top of both versions of the media release are three dot points, which supposedly encapsulate the key points, and which inevitably provide the criteria that outcomes will be judged against. The problem is that two of the dot points differ significantly between the different versions.

It is as if the Government has tried to spin the new policy in two different directions. Or is this just the spin-doctor officials in the Government’s communication system that have stuffed up in a big way?  Oh, how I wish for a Government-communication system that could stick to concise presentation of facts and policy, and stop trying to impose spin!

What a shambles!

The first dot point, with this being common to both versions, says “Government to work with primary sector on developing a sequestration strategy”.  Further down, the Prime Minister said: “We want a plan for reducing agricultural emissions we can all agree on. We’ve heard sequestration is a top priority for farmers and critical to making He Waka Eke Noa work.”

Where ‘working with primary sector’ finally lands among diverse rural groups only time will tell, but it is certainly an explicit statement. However, Government started saying that more than three years ago. Since then, the notion has become more than a little frayed.

The second dot point in the version from the Office of the Prime Minister said that “Government confirms today it will bring all scientifically robust forms of sequestration into the Emissions Trading Scheme, starting from 2025.”

In contrast, the Beehive version simply says that “Government is committed to sequestration being recognised from 2025”. Well, that Beehive version is a meaningless statement given that sequestration is already included within the ETS, albeit with provisos.

A key missing phrase from the Beehive version is “all scientifically robust forms of sequestration”.  Those words are of fundamental importance.

Another key phrase in the version from the Office of the Prime Minister is that this additional sequestration will be embedded within the Emission Trading Scheme (ETS).  This contrasts with industry’s He Waka Eke Noa (HWEN) proposals that it be funded within HWEN as an offset for methane emissions. 

If sequestration is in the ETS, then funding comes from emitters elsewhere in the economy. If funding comes from HWEN offsets, then it is Peter Farmer paying Paul Farmer by a higher methane levy.

So, getting all sequestration within the ETS would be an outstanding outcome, totally logical, and would remove a fundamental problem within industry’s own HWEN proposals. I have argued consistently for that. Is this what the Government is now promising?

The third dot point in the version from the Office of the Prime Minister was that “This will be done at full value, rather than at a discount, so farmers can realise the true potential of the vegetation on their farms”.

This too is an outstanding outcome, much better than HWEN’s pragmatic proposals that pre-2008 native plantings should be at a discount.

However, the third dot point in the Beehive version takes a different tack, saying absolutely nothing either in the dot points or further down about discounts, but instead that there will be “Transitional arrangements in place from 2025 with entry into the ETS to follow later”

So just what will those transitional arrangements be? And when is later? And if the additional sequestration is to initially be outside the ETS then who is going to pay for these credits?

For the Beehive version, it seems there could be a long transition with Peter Farmer paying for Paul Farmer, and with a consequent need for a higher levy on methane well beyond what is needed for the funding of RDE&E (research, development, extension and education).

The other key outcome, not explicit in either version, but surely now very much on the table, is that the pre-1990 barrier for sequestration from native forests will disappear. This should apply in all situations where native forest owners can show that they are appropriately managing these native forests with fencing and pest control, thereby meeting additionality criteria for the sequestration. 

If this dropping of the 1990 barrier is not the intention of Government, then Minister Shaw’s statement within both versions of the media release that the proposals are a ‘significant shift’ relating to the ETS would not be defensible.

Ironically, the Government already claims sequestration for pre-1990 forests in its national Inventory determinations that are reported to the UNFCCC, but very few industry people have been aware of this.

There has been a widespread belief both in industry and in the broader community that pre-1990 forests were somehow prevented by Kyoto and subsequent agreements. But that is not the case. Rather, the key requirement for international acceptance is that explicit verifiable management decisions are creating additional sequestration beyond what would otherwise occur.

Within New Zealand, it is very clear that fencing and pest management, particularly for deer and possums, are essential for forest health. Without these programmes, native forests go backwards.

One of the key frustrations until now for farmers with native plantings has been the challenge of demonstrating that their native forests satisfied the post-1989 criterion. Everything gets much simpler once that barrier is broken down and farmers can focus on demonstrating that the forests are managed.

The ability to measure this sequestration in native forests is also proceeding in leaps and bounds, with various ‘eye in the sky’ and precise GPS systems. This makes measurement feasible in situations that were previously impractical.

The Government emphasises that a lot of work is now needed to get all the necessary systems in place to make all of this happen.  But two years through to 2025 is still a long time if people put their minds to it.  The rules themselves are not complex. The challenge is to ensure that claimed outcomes are verifiable.

I expect that there will be still be robust discussions regarding the practicality of small holdings of less than a hectare, be those pre-1990 or post-1989.  Also, many of the riparian plantings are essentially of non-woody species and some farmers may be disappointed at how little sequestration is occurring. However, the ecosystem benefits of these plantings go well beyond the sequestration benefits. Let’s see where that ends up.

The priority for Government right now is to clarify exactly what they do mean. Why are there two different versions of the media release? Is one version an earlier draft? And if so which one?  Someone needs to admit to stuffing-up in a big way.

One of the challenges for industry when they next sit around the table with the relevant ministers and their officials will be to make sure that their own knowledge of the science and practicalities is strong. They owe that to their members.

Despite the shambolic way this has been managed and communicated, the good news is that prospects of an agreed path forward in relation to on-farm sequestration credits for native forests, including those where the regeneration commenced pre-1990, now look more feasible than they did just a few weeks ago. 

Of course, this is just one aspect of the greenhouse gas issues that New Zealand has to work on. It still leaves big issues relating to productive farmlands threatened by corporate forestry. And it still leaves methane and nitrous oxide policies in disarray. But hopefully it is a step forward.


*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.

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28 Comments

Is it too cynical to suggest that the two versions are there precisely to let a thoroughly spooked Gubmint pick the one which polls seemingly better?

After all everything, but everything this sorry crew do, say or imply is aimed at Nov '23.  That is the full extent of the Robust Science on offer.

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When forced to choose between conspiracy or incompetence, then nine times out of ten it will be incompetence. But some forms of incompetence are fostered by inappropriate culture within organisations.A lot of what is called 'communications' is really just propaganda masquerading as something different.
KeithW

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Completely agree. Well said.

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When you get stuff like this, the politican's probably couldn't give a stuff what this type of farmer will vote for. 

https://www.facebook.com/photo.php?fbid=514469470701798&set=pb.10006416…

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Ordered a full set, would you like me to forward you one?

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I play with bigger balls .

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All still above ground stuff? When will soil sequestration/loss be included?

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False economies
Soil carbon is tricky.

Most of our pastoral soils are in a stable state within very limited further sequestration.

If a farm converted from pasture to cropping (either cash or forage) then there would be carbon losses. These would have to be paid for.

Peat soils would probably be uneconomic to farm, either pastoral farming for cropping.
KeithW
 

 

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Thanks Keith.

Is the carbon sequestered by trees in the soil counted?

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Some trees have nearly a third of their biomass below ground...

https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0185934

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False economies
I believe that an estimate of the carbon in living roots is included. But i am open to be corrected on this.
KeithW

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These tables are formulated in the same way as the default carbon tables given in Schedule 6 of the
Regulations for post-1989 forest land, except that they are derived from the FMA information submitted
by each FMA participant. The forest carbon stock table includes, as do the tables in the Regulations, the
contribution from above-ground residual wood and below-ground roots that remain on site after clearing of
trees when thinning or harvesting occurs. 

Looks like they are according to this https://www.mpi.govt.nz/dmsdocument/3666-A-guide-to-the-Field-Measurement-Approach-for-Forestry-in-the-Emissions-Trading-Scheme

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Correct all part of the tree, roots, branches etc is included already.

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Keith, 

What would the situation be Vis-a vis soil carbon for older than pre 1989 pine forest land on Lismore soil in north Canterbury that has subsequently been irrigated and converted to dairy? When we began the process about fifteen years ago I got Ravensdown to measure soil carbon levels before development started on the basis that such measurements might be useful one day. I no longer have any involvement with that land but my idea at the time was that there was a good chance that intensive dairying under irrigation would build up soil humus and therefor carbon content and that it would be useful to know the starting out point.

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Wee willie winkie

My personal impression has been that on these types of soils there has been a considerable buildup relative to their previous dryland pasture situation. But I have also been told that the science tells a somewhat different story. Nothing is simple with soil carbon!  If these soils were previously under trees, then once the trees were chopped down there would have been a decline in soil carbon over the following ten years.
KeithW

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To say soils are in stable state with no further sequestration is simply not true.  There are many instances around the world with NZ starting to gather data that different land management under livestock does increase carbon stocks.  Also by stating soil carbon is in a steady state you are agreeing with the carbon cycle producing a net zero result. Otherwise if livestock emissions were a net result, our soils would be decreasing in carbon, not in a stable state.

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gladtobekiwi
You would be correct if you said that soils that have been regularly cropped, such as the American Mid-West, and that are then returned to pasture, will indeed experience a build-up in soil carbon. But that is not the predominant situation in NZ. And that is not what you said. The NZ situation, with most land having been in pasture for more than 100 years, is a lot more complex.
The logic in your third and fourth sentences is incorrect.
KeithW

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I’m unclear how this ‘most soils are at saturation’ idea has been established - especially given how dire the information available on soil types at a farm scale is and how or where the research establishing this has come from ???- if You could point me at something to read up on this that would be awesome. 
An observation which would tend to suggest that it’s not feasible for soil carbon to hold constant at any given level is the fact that over years soils are laid down as the result of decomposing organic matter - check any footpaths that were laid a few decades ago and notice how far below the ‘ground’ level the dirt layers are now (most paths started an inch or two above ground). This layer should stabilise at some point if the ‘at capacity’ thing holds true - but then where exactly is the next decomposing layer of lawn clippings supposed to go?
Anyway - Agree no one should get paid for soil carbon (you’ll get trapped in one land use) but it does highlight how little if the complexity in our biological systems is currently understood or accounted for. The relationship between methane and trees is another example…

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Landgirl,

I don't think I have used the term 'saturation', but a state is reached where the rate at which carbon is being added reaches a balance with what is being broken down. If the rate of addition of carbon could be further increased, then the steady state level of organic matter and hence carbon in the soil would increase to eventually reach a new steady state aligned to that increased rate of addition, with the rate of decomposition itself being a function of the amount of organic matter in the soil and with this rate having eventually caught up with the increased rate of addition.  
Soil formation is usually considered as a process cause by the weathering of rocks with rocks rather than organic matter considered as being the parent material. However, decomposing plant material is obviously part of the process.  Carbon is actually only a very small proportion of the rocks themselves and this is also reflected in the amount of carbon in the soil being small.

I do not have an explanation for the footpath effect you refer to, and I have no evidence of that, but the rate of organic matter decomposition will depend on the presence of oxygen via aeration. If there is no air then the organic matter cannot decompose to CO2 and H2O. Rather it would decompose to products such as CH4 and NH3.

If you google "soil formation processes" then you should find a raft of material.
KeithW

 

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I agree with all your comments on soil carbon Keith. Its a case of buyer beware again - many are wanting this without understanding the subject at all - from my limited exposure it is very complex and very uncertain - we need to remember in simple terms to have carbon stored in soil you need to retain the soil. For many high eroding parts of NZ if we had to account for the loss of soil via erosion you could end up having to pay as soil is lost and takes the carbon away  - Im  not sure if the carbon is lost/released in waterways/ocean (beyond my knowledge). Also drought can cause large carbon losses as I understand it.

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Does this mean Keith that ownership of the carbon sequestered in pre 1990 native forests will revert to the land owners? The back and forth nature of the debate along with the appallingly poor communication reflects an alarming lack of competency and professionalism in this very important area from the Government. This incompetence seems rife throughout many Government Departments and their cabinet representatives. 

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Yes, that is likely. But it will only be possible if farmers can demonstrate that there is additional sequestration resulting from a management plan.  That could be an active plan to manage possums and to control deer, pigs, goats and in some cases wallabies.

KeithW 

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A good summary Keith.

To be fair to some officials, not all, its simply a massive work overload. The pollies keep changing ideas so fast they can't keep up and this is on all sides of the political fence.

Couple of add ons from someone a bit inside the tent.

A request for services has been put out last week or so for research and work on how to implement the Pre 1990 additionally and other types outside the ETS at present. They are pushing hard to get this work underway asap.

You make a good point about what additionality (pre1990) is - it has to be additional over and above what would not have happened with the status quo. Many find this hard to grasp and expect the full extra sequestration that occurs. 

This isn't unique to NZ but is the standard rule around the world - in some ways we play pretty loose with this rule already so some should be careful what they expect and not draw to much attention is my advice.

(there also Harvested Wood Products - carbon retained in timber sawn and used in houses etc - but that's another story)

Good point about riparian etc - carbon is pretty easy to understand really - its all about warehousing carbon - the more you see the more you have. If there's not much vegetation there not much carbon. Some of the Ag commentary really needs to learn a bit more and consider what they say or else they could lead many to have unreal expectations and hope.

The other reality is that to get sequestration farmers are going to have to go through the ETS it seems - National seems to be singing of this song sheet as well. By the end of this year there will be well over 3,000 participants in the ETS - there is nearly 500,000 ha registered now and the deluge is not stopping - the majority of this is coming from farmers who have clicked. This is now an essential part of many farmers cashflow and the only way they can make meaningful returns - per comms from many farmers in the past 12 months. Without this cash the decline of sheep would be even faster - I could regal you with the tales of woe at the moment - interest rates, sheep prices, lack of killing capacity and meat storage - lucky there's plenty of grass around.

SO there's an equity issue about who can use the ETS coming up - its going to be hard to argue that only farmers can use the ETS, or Iwi? or NZ Forestors? or NZ investors? or NZ companies wanting to offset - where do you draw the lines as to who can and who can't? That's going to be a hard line to draw but it will have to be done some time.

Then who's going to do all this identification, registration and ETS management. Under the law you will have to be a Registered Forestry Advisor by next August (and going forward probably have to have done PD on the ETS) and then if you want to deal in NZUs for clients its likely you will need to be a registered financial advisor (under consultation as we speak). This rules out Ag consultants etc - in fact its dangerous ground if you dabble with out knowledge and care - many are getting their fines for mistakes between $10 - $20k for minor mistakes.

Finally it seems banks, markets etc are going to require something to be done on emissions or else??? remains to be seen but I don't see this going away and we can't tell our customers they are idiots for too long.

No easy answers and a tricky minefield to navigate through with many issues coming from many directions.

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Jack,
My criticism of officials was only intended to be aimed at the PR communication teams within Government and government organisations.  I agree that there are many dedicated officials at the coalface.  But as one policy official who left officialdom said to me, she was always busy writing memos and reports, and it was a safe environment in which to work, but nothing ever seemed to actually happen in terms of outcomes.  My impression is that there are many more layers of management than was the case when I started my own career in a Government department many long years ago. 
KeithW

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I certainly don’t disagree there are numerous layers and it’s incredibly slow trying to get things done. There also appears to be a lot of silo type behaviour.

I totally agree the communication on this topic is poor and confusing. The concept of not much happening is not new in my experience as if you don’t make a decision you can’t get into trouble.

It seems to be a problem in all large organisations, public and private from my experience.

To be fair the current government has tried to do things, rightly or wrongly in peoples view, but the communication and reasoning of why and what for has been very poor.

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Jack,
You and I are very much on the same page in terms of our thinking on these matters. The safest career strategy is typically to keep one's head down and this then becomes part of organisational culture.  
KeithW

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I think part of the problem, is that the actual solution (using less fossil fuels) is still politically untenable.

But also, legislation can't be just about right, it is word for word law, and then picked apart looking for loopholes to exploit politically, or for financial gain. 

Any proposal they come up with is not going to be perfect for every group, be it farmers or greenies. 

Unfortunately , with a close election looming, it would be pretty hard for all parties to ignore which policy would win the most votes. Or most likely, kick the can down the road again.

Luckily, labour has the greens, and national have act, so both can occupy the centre on this.

 

 

 

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Agree that the announcement wasn't clear (though Minister O'Connor called it a "clarification" rather than anything new, which is sort of true).  Government had previously said that because there wasn't robust science, only pre90 native forest and riparians would count at first from 2025. Now they say all sequestration will count - provided there is robust science.  Spot the Difference...

Proving post89 status for natural regen isn't the hard part - the hard part is quantifying the counter-factual scenario of baseline sequestration in the absence of fencing and pest management, and then quantifying the actual sequestration that is occurring to allow the difference to be calculated. Beware of people with vested interests claiming that remote-sensing solves everything - they need to estimate stocks precisely to pick up a small stock gain from amongst the noise, and no-one has demonstrated that yet in native forest as far as I know. 

The irony is that the sector was adamant that the ETS is far too complicated and they wanted no part of it - then they went and designed a far more complicated system. And now they're asking government to monitor their land management practices with satellites and drones...

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