Dairy sector profit still on the table, but margin gap tightens
DairyNZ’s latest Econ Tracker update shows most farms will still finish the season in a positive position, although the gap has narrowed compared with early season expectations.
Dairy farmers are welcoming the report released today by the Parliamentary Commissioner for the Environment.
They say the report recommends methane should be treated differently to carbon dioxide and doesn’t need to be reduced to net zero.
DairyNZ chief executive Tim Mackle says PCE’s work adds to the growing evidence base developed over the past few years about how methane, a biological emission from animals, differs from carbon dioxide in terms of its impact on global warming.
“The paper states that methane needs to be reduced and stabilised in order to achieve no additional warming, rather than go to net zero. This is consistent with the international science.”
Mackle says PCE Simon Upton also recommends that nitrous oxide does not need to be reduced to net zero.
“We would welcome further research into this approach.
“This paper demonstrates again how the science around the impact of biological gases on global warming is continuing to develop. This is why the implications of any policy decisions for dealing with these gases needs to be carefully considered. But it is clear that total emissions must reduce.”
The science to date has supported methane being treated differently to both nitrous oxide and carbon dioxide. A split gas approach, under consideration for the Zero Carbon Bill, could recognise the differences between the gases by providing a separate target for methane.
“We agree forestry and planting will be vital to helping New Zealand meet our greenhouse gas reduction targets,” sDr Mackle.
“Many of our farmers are already planting for other environmental reasons, and often with trees and species currently excluded from the greenhouse gas inventory. It would be great to see them recognised for the carbon sinks existing on their dairy farms.
“While Mr Upton proposes forest offsets be used only for biological emissions, we think there is a role for forestry to offset carbon dioxide. We agree however that reduction efforts must occur across all sectors, and forest sinks shouldn’t be used to avoid reducing carbon dioxide emissions. All sectors need to do their part.
“Mr Upton makes an important point that unless there is a strong focus on reducing carbon dioxide emissions, our efforts to reduce biological emissions will be of little value. I expect the Climate Change Commission, once established, will examine how forestry offsets in carbon budgets can be applied across the different sectors.
“The dairy sector is concentrating on how to continue improving our emissions efficiency and reduce our total emissions. While we have options available to reduce biological emissions, the reality of doing so is quite complex due to farm system and regional differences. We are working through these challenges at the moment.”
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