FARM EMISSIONS LEVY PROPOSED A farm-level levy/rebate scheme that puts a price on emissions has been proposed to the Government as the best way to reduce agricultural methane and nitrous oxide emissions.
The scheme would see dairy farmers
Emissions Trading Scheme (ETS)
paying on average 1 cent per kilogram at processor level by 2020. It is
“It is proposed that the money
raised by a pricing policy is put into
of milk solids ($ .01/kg MS) in the initial anticipated that a phased-in approach an Agricultural Emissions Fund for stages, according to the report from
will provide time for farmers to collect
the Interim Climate Change Committee and measure the required data to (ICCC), impacting the bottom line for all agribusiness, including PKW.
But the incorporation is welcoming the recommendation, says
Mitchell Ritai, General Manager
Shareholder Engagement, as part of its commitment to manage climate
change in the Kaitiakitanga Strategy. “We take our role as kaitiaki of our
whenua very seriously and believe that many other farmers do as well” says Mitchell. “While there seems to be a
general agreement on the outcome, knowing how it will be achieved will
require further debate and discussion with all who will be impacted.” The ICCC was asked by the
Government to find a solution to the issue of agricultural greenhouse emissions (mainly methane and
nitrous oxide), which make up around 48% of New Zealand’s total reported
greenhouse gas emissions. Reducing greenhouse gases is seen as crucial
to achieve the targets set by the Paris Agreement in 2015 to limit global warming to well below 2 degrees
above pre-industrial levels. Globally, the world is not on track to achieve this target.
The ICCC has recommended a 5 year period to implement the scheme while
also introducing an interim step where emissions will be priced through the
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report on their annual emissions.
The levy/rebate scheme has been
mooted as a simple way of including
agriculture in the existing ETS without having to trade units, and farmers will initially receive a 95% free allocation. This will help minimize any social
impact from increased costs as well as incentivise farmers to reduce
levy costs through reducing on-farm emissions.
While compiling the report, and its recommendation, the ICCC
highlighted that any policy must
fulfill Te Tiriti o Waitangi principle of partnership and good faith with iwi
and hapū and recognise the unique characteristics of Māori land.
The ICCC also recommended that
any board or committee established
to manage the funds generated by a pricing policy, estimated at between $47 and $95 million per year over the first decade, includes
representatives from the agriculture sector and iwi/Māori landowners to ensure effective co-governance.
recycling back into programmes that will directly help farmers to transition
to farm-level pricing in 2025. A portion of the fund will be used to enable owners of Māori land to equitably
engage in this process and access
opportunities,” says Mitchell. “While
we welcome the Government’s plans, we also acknowledge that there are still some areas that need further
attention; we are looking forward to
the Government’s response from the consultation round.”