DAMIEN O'CONNOR
A couple of years ago when the Zero Carbon Act was put in place, the Government made a major commitment to our primary industries. We agreed to not automatically put them into the ETS, along with the rest of the economy. Farmers and growers said at the time there needed to be a better way for them to pull their weight in reducing greenhouse gases. We agreed with you.
The hard work done by the He Waka Eke Noa partnership since then to put together their proposed system has gone a long way to providing that solution. We have accepted nearly all of their recommendations: a farm-level levy, methane and nitrous oxide as split gases, re-investing the levy into the sector, remaining out of the ETS, and recognising on-farm sequestration.
We found outstanding issues in only two aspects of the proposal – who will set the price for split gases, and how sequestration is accounted for and managed. Like any levy system, price setting needs independence - hence Ministers taking on this responsibility, based on advice from the Climate Change Commission.
On sequestration, both proposals recognise its complexity, and we too believe more work is needed on it. To be clear, we've not ruled out recognising additional on-farm sequestration. I'm committed to doing more work so there’s a fair system for farmers to claim the important work they're doing to reduce the impacts of greenhouse gases.
It just needs to be done in a way that is efficient, verifiable, and does not create an unworkable burden on farmers. Those are the challenges that I want to hear people's thoughts about via the consultation that is happening. We want a system that has equity and fairness. This is our goal. Like the Partnership’s modelling before it, our response shows the red meat sector will be affected more than others. I do not however, believe for one second that is where things will end up.
That's because alongside the sector the Government is investing hundreds of millions of dollars in climate research through a joint venture with key sector businesses to deliver emissions reductions tools into farmers’ hands sooner.
Climate change isn’t coming… it is happening now. For the past five years, MPI’s adverse event fund has been blown out of the water by 900 per cent due to floods and drought. For instance, we practically had a nationwide drought spanning 2019 to 2021 and we are also seeing tropical storms sweeping further south.
Talk of emissions leakage – which is production falling in New Zealand and rising in another country – or risking food security are things I simply don’t subscribe to. The counter factual is this: doing nothing will create greater food insecurity and price volatility. The macroeconomic factors are there. The insurance and finance systems are already factoring in climate change. The trade environment is already moving. Our customers overseas are moving.
I’ve steadily assessed the technology coming on stream, the positivity with which exporters are approaching their markets, and the huge investment of $339 million we’re making, which includes the 50:50 joint venture with business that I referred to earlier. I am confident that our sector will beat others to reach our 10 per cent methane reduction target by 2030, not because of the pricing of gases, but because of the reductions we will achieve through new technology and practices.
Through this we will maintain our productivity and create value. Why do consumers overseas seek out New Zealand products? It’s because they have a perception that “if it comes from New Zealand, it must be good for you.
”That is brand value. In the future they will say “because it comes from New Zealand it must be good for me and the planet.” We can do this by continuing to work together.
