A carbon-cutting roadmap

The Climate Change Commission has released its final advice to the Government, laying out a carbon-cutting roadmap that could change the way we live.

The 418 pages of final advice would have been a colossal undertaking, building from the immense 15,000+ submissions that were received on the draft advice (earlier this year), to meet our Paris Accord target of net zero emissions by 2050.

Charlotte Irving - Orari River - When it rains it pours!

The final advice came at a time of the Canterbury floods, which wreaked havoc across the region’s road networks, winter feed crops, supplementary feed, and fences. Ironically, the torrential rain followed dire drought conditions. My family farm in Albury (South Canterbury), had only 50mm of rain since the start of March, resulting in hundreds of store lambs being sold and several unit loads of feed being purchased, to alleviate the pressure. Then, at the end of May (the end of the growing season), we were hit with 130mm. We got off lightly with very minor soil damage on autumn-sown crop paddocks, however other farms were not so lucky.

Disasters increase insurance costs, strain company balance sheets, destroy harvests and focus resources on damage repair rather than productive new investment. Some may still utter under their breath “that’s farming” or “Murphy’s Law”, however, for many more, the obvious weather disruption is becoming part of our narrative. “Climate change (don't roll your eyes) is going to continue to create more disruptive weather patterns. You don't need to look far to see the scary evidence – adaption is essential”[1]. Hence, The Commission has warned, if we do nothing to reduce emissions by 2050, it will cost the country about 2.3% GDP (compared to 1.2% if we achieve net-zero emissions).

[1] As brilliantly worded by Julia Jones (NZX) at the Kai Under Dry Drought Symposium (June 2021)

2. Mid-May, we sent 4,440 lambs off-farm to works and stores – As dad said, someone will make good money out of the stores, lets hope they went to the breeders!

3. Rainfall records on the family farm, show a lack of rainfall in the three months before the severe Canterbury rainfall at the end of May 2021.

4. Minor scouring on the autumn-sown cereal paddocks, after 130mm rain.

So back to the final advice of the Climate Change Commission. Its significance should not be understated; it ultimately represents a new baseline. From 2022 onwards, the Commission wants us to meet a shrinking “carbon budget”, which is essentially the amount of greenhouse gas the country is allowed to “spend” each year. It proposes to achieve this, by using direct government rules and regulations to drive down emissions, instead of just relying on the Emissions Trading Scheme. It also explicitly rejects a guiding principle of “least-cost”, on the debatable basis that this would create irrational land-use outcomes and hurts more marginalised communities.

What does the advice mean for New Zealand’s primary sector?

Changing in farming practices and substantial effort from the sector, at the high-level this includes:

The completion of the pricing mechanism to incentives on-farm emission reductions by 2022, enabled through He Waka Eke Noa[2]. This is central to their advice and is considered a key priority, adding “Pricing can reward farmers who do more, as every tonne of emissions reduced is a tonne that they do not have to pay for.” Given the mention of contesting views by submitters to the Commission in the pricing area, there is likely to be a considerable public debate before we get to the endpoint.
Development of advisory services to assist farmers in making informed decisions to adopt emissions-efficient farm practices and diversify land use. This includes adding a GHG section in Farm Plans, where farmers can enter their plan to reduce emissions. Farmers will track carbon stored in their trees, and wetlands, and adopt best-practice animal and feed management.
Improve rural broadband (i.e., farmer access to data and information)
Cut biogenic methane emissions by 12% (from 2017 levels) by 2030[3], by moving away from livestock systems. Feedback to the commission said it would be harder to cut agriculture emissions by simply improving how to farm, so they are advising that cattle and sheep numbers must fall by 13.6%[4] by 2030 while producing the same amount of milk and meat. This will be supported by a transition from pastoral farms to horticulture / arable. An RMA reform is suggested to enable this, by adapting legislation that locks us in the status-quo, as well as government investment in improving infrastructure and supply chains in horticulture.
Average 25,000ha/yr of exotic tree planting, over the next decade. While some pine forestry is still favoured, the commission thinks this should be a lower level than the ETS policies favour, with more emphasis on native plantings. The priorities have been morphed from pine trees and dairy cows to indigenous and mixed farming.
The upper range of reductions could be unlocked by taking a “magic pill”. Develop a long-term plan for government investments in research into promising techniques to reduce methane, for example removing medicine barriers for methane vaccines. Low methane sheep will be selected, with the Commission expecting they will help New Zealand cut methane by 10%.
Government to work with the primary sector to demonstrate environmental credentials to international customers.
Further GHG policies, in addition to the freshwater policy, and agriculture emissions pricing. These must mutually support soils, biodiversity, freshwater, and climate, and achieve multiple outcomes.

Other considerations:
The Commission has floated the idea of pricing synthetic N fertiliser, as part of the ETS, rather than waiting to include it in the ETS. However, the Commission has not embraced Greenpeace’s suggestion of banning fertiliser use, or the strong interest to transition to regeneration farming, on the basis “there is not yet a robust evidence base”. However, the door remains ajar, the final advice stating that “there does not appear to be any …. barriers to pricing nitrogen fertiliser emissions at the manufacturer level as soon as practical”.
The Commission’s consultation revealed some farmers are delaying action because they think they’ll be “benchmarked” against future emissions. Why reduce emissions now, the argument goes, when you won’t get credit for it? On this basis, the Commission urges that Ministers set a pricing mechanism by the end of 2022, to “give farmers confidence that they will not be penalised for taking action now to reduce emissions”.
The report seemed to emphasis emission reductions; however, it is disappointingly very light on mitigations and alternatives. Industry bodies, rural professionals, and farmers must work together to develop solutions.

[2]He Waka Eke Noa are tasked with developing this by June 2022. The Commission will review what is put up by Agriculture at that time and give its view and the Ministers (Agriculture and Climate Change) will have to have made their decision by the end of 2022. If insufficient progress has been made, the Government can bring agriculture into the ETS at the “processor level”.

[3] “This represents a 20 per cent increase in the level of ambition compared to the 2030 biogenic methane target in the Zero Carbon Act, which is to reduce methane emissions to 10 per cent below 2017 levels by 2030. Note the Commission has not recommended a change to the targets in law.

[4] This is an addition 6% reduction from the expected 8% predicted reduction that will occur anyway

Like other sectors, the farming sector is lukewarm about its proposals.

DairyNZ chief executive Tim Mackle, remains concerned agriculture might be asked to do the “heavy lifting” if carbon dioxide emissions are not cut urgently. Beef + Lamb New Zealand thinks the final advice may be “too optimistic about the emission reductions that the farming sector can make”, and the advised 12% (from 2017 levels) reduction in biogenic methane emissions by 2030 “represents a shift in the goalposts on a target that is already too high”. They are also disappointed that the levels of projected exotic forestry planting are still too high and “will lead to NZ sheep & beef farms being converted to trees”. However, the commission has warned we must move fast, right across the country, to do our share internationally and get carbon neutral by 2050. While there is no denying it will be a colossal challenge, instead of being criticised for lack of action, farmers in the future may well be praised as the major leaders of change and restoration.

What does the advice mean for other sectors?

I have focused on agriculture, although to put things into perspective, we are not the only industry grappling with the ambitious proposals; the advice impacts virtually every industry, from transport to energy, to resources[5]. Business operators, consumer behaviour, and government regulation will change.

The list of high-level proposals includes no more household gas connections by 2025, no new fossil-fuel only cars imported by 2025, electric domestic planes by 2030, and solar panels on homes and native deforestation ending by 2025.

[5] A a summary of proposals in other industries.

Each of these proposals comes with contesting views; the climate wars are now underlined in the mainstream media. While I find these debates confronting, they also provoke reflections. As a farm consultant, I am often calculating the greenhouse gas emissions, offsets, and profiles from farms, however, I have only started to ponder what my household carbon footprint is. As an avid adventure seeker using a 4WD Hilux (yes, I’ve been dubbed an “illegitimate” user), I suspect it is nothing to be proud of, yet typical of other like-minded Kiwis. Yet I consider changes to my lifestyle non-negotiable. I may feel differently in 10 years when there is a suitable 4WD EV on the market?

6. Hunting up the head of the Godley Valley earlier this year– my illegitimate truck use

What happens now?

The Commissioners final advice has kicked off what promises to be months of debate in Parliament over a policy area that has divided politics ever since Helen Clark’s ill-fated “fart tax” – which would really have been a burp tax – 18 years ago. The Government now has a legal deadline of the end of the year to make very hard decisions about how it will enact the advice. Politicians and bureaucrats are going to be working through the night.

In the meantime, I will continue to support farmer clients, by advising them of their greenhouse gas emissions, and the impact of farm management practices on these. As a sector grappling with the rising cost of compliance, I would love individual farms to receive greater rewards and financial support for their sustainable contributions. It is promising to hear that ASB have recently launched lower cost green funding, at a discounted interest rate of 2.25% over five years. I am also interested in calculating my own emissions, and how I compare to a typical New Zealander. Watch this space!

Any comments or questions? Leave them in the comment box below or contact Charlotte directly.

Article written by Charlotte Irving.