Wednesday, 8 June 2011

When the Cows Come Home

Labour is proposing that agriculture will be covered by the Emissions Trading Scheme from 2013. That has generated heated discussion, much of which seems to be missing the point.

There is an international crisis. There is a New Zealand crisis, and there is an agreed goal and purpose. It is a goal that both Labour and National are agreed on; if New Zealand is to maintain its status as a responsible country with a clean green image, then there must be a radical cut in our greenhouse gas emissions. That is a done deal. It stems from our being a party to the Kyoto Protocol.

The Kyoto Protocol is an international agreement that is based on penalties and rewards. Countries can actually trade both of these with each other, so that a country which increases its toxic emissions can buy a “Get out of Jail Free” card from a country which has reduced theirs. So on an international scale there is still a balance, and even more important, the polluter has had to pay as a reward to the non polluter.

If a country pollutes more than it did in 1990 it will need to buy from other countries to cover the excess. If a country emits less than it did in 1990, it can sell its spare allowance to other countries (or “bank” them for future use). New Zealand is in the former category. We pay.

If that cost isn’t charged back to the New Zealand polluter then it is the tax payer who pays and there is no incentive for polluters to cut their emissions. There is already a charge levelled against transport, and major industries and power generators are charged on the basis of a “free” allowance and a charge on any increases in emissions beyond that covered by the allowance. These free allowances reduce each year until eventually abolished. There is no point in the scheme if we tax payers pay up and the polluters can avoid their obligations and continue to pollute.

Labour introduced this scheme. Agriculture was to come into it in 2013 (with the same gradual reduction of free allowances as described above). National however has extended that date to 2015. They have also extended the date on which free allowances finish; from 2030 to 2050. Labour states that this move takes away the urgency and we cannot afford to slacken.

Bringing the start date for agriculture back to the original 2013 will mean that we gain another important benefit. The money saved by reducing the load on taxpayers will be used to fund the restoration of the tax credit for research and development which was killed off by National. Research and Development funding is vital if we are to find ways to reduce greenhouse gasses. If we can fix the problem, there will be no cost to farmers and the entire country will benefit.

Mind you, from 2013 to 2017, the free allocation for farmers will cover 90% of the emissions leaving only 10% having to be paid for. That is not a huge toll on the agricultural sector.

One of the difficulties we face is that the delay we have already experienced since we signed the Kyoto Protocol has meant that there has been little urgency in researching and applying sustainable alternatives. To make matters worse, this has happened at a time when Fonterra payouts to farmers has meant a huge increase in dairying throughout the country. Fifty percent of New Zealand’s greenhouse gasses come from the agriculture sector. We need to act now.

There is a massive need for research – there are already innovative ideas for reducing methane emissions, and practical farming methods to reduce soil pollution and run-off. Labour’s plan is to tackle the research issue, and create strong incentives for farmers to embrace change.

Being “clean and green” is also an image we have to be seen as taking seriously if we are to avoid criticism from our competitors for being misleading and inconsistent with our “New Zealand 100% Pure” marketing campaign.

With National’s plan we will be twiddling our thumbs ’til the cows come home and all taxpayers will be picking up the bill.

No comments:

Post a Comment