This provision is one of many contained in a consultation document released last week.
The other major aspect for agriculture is a provision to allow ‘offsetting’ of forest land, a move that would greatly benefit Landcorp and others developing dairy farms in the central North Island.
Under the current law agriculture is scheduled to be included in ETS in 2015, subject to a review in 2014. The review will assess availability of technology for farmers to reduce emissions and whether major trading partners are taking steps to reducing their emissions.
The Minister for Primary Production, David Carter, told Rural News that if the 2014 review said the entry of agriculture into ETS should be delayed, the Government would have to rush through special legislation.
“What we are proposing in the ETS Amendment Bill is to put in a provision that if the review says ‘don’t put in agriculture in 2015’, we make that change by regulation rather than by legislation.”
But Carter believes agriculture will eventually be a part of an ETS – it’s a matter of timing.
“At this stage, despite a lot of research into ways of reducing methane emissions, there are no known economic solutions available to farmers. But I am confident that over time science will give us some solutions to methane emissions. That’s why we are putting so much money into science and research to find solutions to reduce greenhouse gas emissions – particularly methane. Once those solutions are available then we would quickly encourage farmers to use them.”
Offsetting emissions with forestry would mean an owner of pre-1990 forest would be able to convert the land to another use, such as dairying, provided they plant a similar area of land in trees. Under current legislation the cost of converting pre-1990 forested land is very high due to its carbon liabilities.
Carter agrees this will benefit Landcorp but there will be trade-offs.
“The government previously gave allocations of carbon credits to the owners of pre-1990 forests because of the potential loss of value because of the difficulty of converting it... With offsetting available, the government may claw back some of the previously promised allocation of carbon credits.”
The document is out for consultation until May 11.
