Opinion: It’s too early to tell for sure. But maybe farmers are finally coming around to the Government’s exceptionally generous proposals to them on climate.
But even if they are, they will still be global laggards. True innovators among farmers elsewhere have already made the mindshift to climate-compatible, nature-restoring farming that still eludes most Kiwi farmers.
To try to stir our farmers into action, the Government’s offering them a lot of money: we’ll give you a handsome reward for sequestering carbon; while charging you a mere pittance of a penalty on your ruminant animals’ climate-changing emissions.
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Oh, and we’ll also throw in a tonne of public money for research and development and implementation to help you make your farming systems more climate-friendly, which your customers are demanding of you anyway.
As simple as the bargain sounds, it runs great financial risks for the Government, as Treasury laid out in documents obtained under the Official Information Act and reported recently by my Newsroom colleague Marc Daalder.
Yet the Government persevered with its offer in October. To which many farmers and their organisations responded with great anger and doomsday analysis.
The Government lost control of the narrative because it didn’t simply roll over and accept everything farmers had demanded. Worse, it did not give farmers the one thing they really wanted – counting maximum land, plants and carbon in the sequestration calculations.
To try to regain the initiative, Prime Minister Jacinda Ardern and Agriculture Minister Damien O’Connor travelled down to Fieldays on Wednesday to say, yep, we’ll give you what you want on sequestration.
That was widely billed as a back-track. Yet that’s exactly what the Climate Change Commission had advised the Government in May last year. The Government could have saved itself a lot of bother by listening.
So far there is muted acceptance from some farming organisations such as Beef + Lamb, and no tirades from the doomsdayers such as Federated Farmers/Groundswell.
Meanwhile, dairy farmers know they’re on to a good thing. They make far more from their land than sheep and beef farmers do. They can easily afford the token penalty for their cows’ emissions, while reaping sequestration rewards.
Problem solved? Far from it. There is already a large backlog of landowners seeking to register their forests for the Emissions Trading Scheme. A rush of 20,000 or so farmers over the next few years will only make matters worse.
The most perverse outcome of all, though, is the way the minimal emissions penalty/maximum sequestration reward will play out. The returns are so great, why would farmers bother to put much effort into reducing emissions?
Next up, there needs to be a big fight over the base year for plantings which will earn money in the ETS. He Waka Eke Noa, the sector/government collaboration seeking to design a pricing system and all the rules around it, proposed a base year of 1990. Any eligible species planted from then would make money for farmers.
That was the baseline adopted in the UN’s Kyoto Protocol 25 years ago. But that climate treaty was superseded by the Paris Agreement in 2015. It is a fundamentally different approach to global climate commitments.
Yet the baseline still stands in our ETS – understandably, given foresters, including farmer-foresters, planted a lot of trees under those rules and are already making money from them in the ETS.
But a lot of on-farm trees that will now become eligible for the ETS were planted for other reasons, such as alongside streams and rivers to stop excess nutrients flowing from paddocks into rivers and polluting them.
A 25-year-old radiata pine stores much more carbon than a five-year-old one does. The older trees have stored 712 tonnes of CO2 per hectare, worth $60,520 at current prices in the ETS; whereas the five-year-olds have stored only 71 tonnes worth $6,035.
Those examples of age/tonnages are for Hawke’s Bay and the southern half of the North Island in the Ministry of Primary Industry’s look-up tables. Forest owners use those to calculate the volumes of sequestration that will earn them money.
Simple logic and equity would dictate farmers’ baseline should start when they first face a minuscule penalty for their emissions – in 2025, the Government is hoping. They should not grab far more money by claiming much older trees.
But, of course, they likely will, thanks to expedient politics in the face of ferocious farmer lobbying.
And the more money farmers grab, the less money is available from the Government’s auctioning of units in the ETS. Yet that revenue is vital for helping to incentivise and reward emission reductions elsewhere in the economy. So farmers win and the rest of us lose.
The most perverse outcome of all, though, is the way the minimal emissions penalty/maximum sequestration reward will play out. The returns are so great, why would farmers bother to put much effort into reducing emissions?
Meanwhile, many of their customers at home and abroad are responding far more rigorously to the escalating planetary climate crisis.
The graver it gets, the greater their urgent calls for actual emission reductions, particularly of methane. The greater their distrust of offsetting through sequestration, the greater their push for true transformations in land use, farming and food. They want global food systems that are truly climate-compatible and real restorers of nature and ecosystems.
Those are the strategies real leaders in farming and food are developing and delivering. Companies such as Nestlé and Unilever overseas and here, in a more tentative fashion, a few companies such as Synlait Milk, Silver Fern Farms and Pāmu.
