The problem is it has become bogged down in costly and bureaucratic accounting rules – a “jobs scheme”, as one former Federated Farmers president described it. While pilloried at the time, Federated Farmers scepticism is becoming increasingly mainstream.
Those from both ‘warmest’ and ‘denialist’ camps are now asking what the ETS is fundamentally meant to achieve – aside from the right to say: we have an ETS.
The Ministry for the Environment is also starting a series of regional ETS consultations as a pre-regulatory move; change is on the way.
What we do know is that Kyoto’s first commitment period comes to a halt at the end of this year and we must set a national ‘carbon budget’ to 2020. Will we sign up to Kyoto’s second commitment period or revert back to the United Nations’ looser Framework Convention on Climate Change?
Big emitters in the G10 members have signalled retreat. Canada, Japan and Russia have all stepped back from Kyoto and the US never made it to the start line.
Minister for Climate Change Tim Groser believes we must have an ETS or overseas trade will become problematic. That’s incorrect. Canada, when faced with a multi-billion dollar bill for its coal fired power stations, last year withdrew from the Kyoto Protocol. Its exports have not suffered and nobody here has called for a boycott of maple syrup. Neither are we seeing Greenpeace activists chaining themselves to Toyota dealers’ railings in protest at Japan’s decision not to sign up to a second commitment period.
While we need to be seen doing our bit, Minister Groser confuses market entry with consumer discretion. Under World Trade Organisation rules, a country cannot impose standards on imported goods that it hasn’t placed on its own.
Since no other country is imposing carbon penalties on its own agricultural goods, they cannot, under WTO rules, unilaterally impose them on ours because our ETS doesn’t include agricultural biological emissions.
All the while, carbon prices under the European ETS – the world’s largest – have slumped to under $10 a tonne. Our ETS is predicated on $25 a tonne. It seems the European ETS is caught in a vice of its own making; a mild winter and increased renewable generation have at least temporarily offset an emissions spike expected from Germany’s nuclear power station decommissioning. Farmers here are encouraged to see agriculture’s enrolment on hold until mitigation technologies are available and other countries make progress. Such pragmatic preconditions don’t go far enough.
Federated Farmers considers it a necessity that our competitors bring agricultural biological emissions into their schemes before we do likewise. Otherwise, all that will happen is carbon leakage to less efficient carbon production systems. If we price ourselves off the market we will make no difference to the world price of the commodities we produce. We will not have changed demand either.
Our overpriced production would simply be replaced by other high carbon footprint countries, which would have the effect of increasing overall world CO2 production.
Meanwhile, some positive recognition of agriculture’s impressive carbon leadership would be welcome. New Zealand agriculture has, over the past 20 years, reduced emissions in every single unit of agricultural product by about 1.3% each year. As a biotechnologist and a farmer, I ask what about giving science a chance, through the Agricultural Greenhouse Gas Research Centre.
• William Rolleston is vice-president of Federated Farmers and chair of the Ministry of Science & Innovation’s Innovation Committee.
