While by no means confined to agriculture the Low Emissions Economy report studying steps to zero carbon by 2050 puts agriculture at the sharp end of main policy shifts its authors cover.
It calls for major land use change to increase forestry and horticulture.
The effect of reducing livestock numbers and replacing them with trees would boost new forestry area by 1.3 million to 2.8m hectares of new plantings by 2050.
That amount compares to the 1.7m hectares already in exotic plantings and has some in the sector questioning whether it is possible.
The extra trees are an effort to boost forestry from the 30% of emissions it absorbs now, to nearer 50%.
The authors point to marginal sheep and beef country as the main source of land for trees and maintain it is less than the 3m hectares lost to the pastoral sector between 1990 and 2015.
However, that loss included significant tracts of land taken out of high country farming and into the Conservation Department estate.
The movement of about 45,000ha to 90,000ha a year into new forestry puts the Government’s goal of 50,000ha a year at the lower end of the commission’s suggestion.
But levels up to 90,000ha are described as feasible, based on past land use changes and planting levels achieved in the 1990s.
Taking 2m hectares for forestry, the average area based on the report’s modelling, would capture almost a quarter of NZ’s sheep and beef pastoral area.
Federated Farmers climate change spokesman Andrew Hoggard said the loss of that area would devastate rural communities in terms of jobs and maintaining social fabric in small, rural towns.
The report acknowledges the plan depends on the availability of suitable land and the profitability of planting it.
But some industry observers said even at the Government’s lower end of 50,000ha a year, land supply might start to get tight as soon as three years.
The report foresees another 1m hectares heading into horticulture including cropping, with some dairy land changing use.
But DairyNZ economist Matthew Newman challenged the loss of what could largely be better quality dairy country to horticulture.
“We do not see big changes in the 4.8m cow population we have unless, of course, there are some big regulatory changes to make that happen.”
He believes seeking an extra 250,000 hectares for horticulture could be plausible but 1m hectares is extremely high.
He also questions the willingness of pastoral farmers to make the significant shift to horticulture.
To incentivise a shift in land use, carbon values are cited as a key motivator and the report estimates a shift to as high as $200 a tonne by 2050 will be necessary.
However, DairyNZ chief executive Tim Mackle said rather than incentivising better practice such a rise would push gas costs for the average dairy farm to $230,000 a year if no free allocation is offered.
Should the Government maintain its 95% free transition allocation that cost would be $32,500 a year.
The report also deals with methane, a major contributing greenhouse gas that has a significantly shorter life of only 12 years compared to centuries for carbon dioxide.
Being a shorter-lived gas it should not be required to be reduced to zero, unlike carbon dioxide and nitrous oxide.
NZ’s unique gas profile, with its dominance of livestock-generated methane provides an opportunity for a unique solution, splitting long-term and short-term gases with an explicit target for methane reduction over a fixed period.
Hoggard welcomed the recommendation not all gases be treated the same.
Past criticism of farming’s contribution to gas levels has included calls for methane to be reduced to zero.
“We’re pleased to see the commission recognises the credible arguments for long-lived and short-lived gases to be treated differently.
“Methane, a short-lived gas, would have a separate emissions pricing scheme to incentivise reductions,” he said.
More options now available
Methane has to be reduced but not to zero, Victoria University Professor Adrian Macey says.
The Productivity Commission’s report on a low emission economy is a comprehensive, open and valuable resource for kick-starting sensible policy around dealing with climate change, former climate change ambassador Professor Adrian Macey says.
Macey, now at Victoria University, said a key take-away from the report is recognition methane has to be unbundled from other gases when dealing with its reduction.
“If you accept the need to deal with methane differently then all sorts of options start to present themselves including a separate basket of gases, possibly a methane quota or separate pricing of methane outside the Emissions Trading Scheme.”
It also opens up opportunities to identify where methane emissions are greatest in the primary sector and address them accordingly.
Dairying contributes about 50% of agricultural emissions compared to 18% from the beef sector and 30% from sheep. Dairy’s share has doubled in the past 25 years while sheep’s almost halved.
“So do we have to make dairy responsible for the increase? There are equity issues there to examine within the pastoral sector.”
He is pleased with the level of primary sector understanding that now exists about methane being different to other gases, praising Federated Farmers climate change spokesman Andrew Hoggard for his grasp of the issue.
“It has made its way from scientific discussion to farmer awareness.
“Now the primary sector understands it it obliges the Government to be very explicit about how it is going to deal with the issue and who pays for the methane.”
He is also pleased to see a recognition methane does not have to be reduced to zero, a claim some have made with all gases bundled into the ETS.
“So no government is going to ride roughshod over this and has to accept methane does not warm significantly.
“It is not a get out of jail card for the sector.
“It does not mean you would not want to reduce methane, just not to zero.”
He believes NZ has a unique opportunity to establish a world leading methane/gas market that would have significant intellectual property claims attached.
“One thing that has also not been recognised that widely is that reducing methane can actually have a cooling effect.
“So it could create the opportunity in a well-designed market for farmers who do reduce methane to receive a credit for that action.
“It is the equivalent of sequestering carbon.”
Macey believes the report better informs NZ and the quality of the 1000-plus submissions makes for a valuable resource.
“I think it will be well received by the Government. It gives ministers a few more options than they have had presented to them before now.”
