Blunt O’Connor indicates Govt’s mind made up over ETS

Sunday, 14 July 2019, 1:43 pm
Article: NZ Energy and Environment Business Week

Blunt O’Connor indicates Govt’s mind made up over ETS

First published in Energy and Environment on July 4 2019

Agriculture Minister Damien O’Connor has given yet another indication ministers have all but decided to put agriculture in the Emissions Trading Scheme.

O’Connor told the Primary Industries Summit the ETS was what they wanted as Federated Farmers had campaigned against a carbon tax, which would have been easier to implement.

In a speech, he described as blunt, but some observers called combative, O’Connor referred to Labour’s agreement with NZ First to make 95% of biological free. He said this may be a “problem” as it might not change behaviour.

He argued farmers faced many barriers to their exports and had to have straight answers to every question raised around animal welfare, food safety and climate change.

O’Connor’s comments came as the sector continues to wait for decisions around the ETS. Cabinet has been considering two Interim Climate Change Committee’s reports since April and has continued to decline to release them in the meantime.

The Interim Climate Change Committee was asked to provide independent evidence and analysis on two key questions: How surrender obligations could best be arranged if agricultural methane and nitrous oxide emissions enter the ETS and planning for the transition to 100% renewable electricity by 2035.

The ICCC report is known to raise issues about how to administer the inclusion of biological emissions. One key question is whether they are applied at the farm gate or producer board level.

Application at an aggregated level is easier to administer, but would not take into account individual farms performance, with the most likely outcome simple downward pressure on herd numbers. Application at the farm level will be more complex and very difficult to police, but it would reward farmers who try to reduce emissions and penalise those who do not.

The Environmental Protection Authority in its latest statement of intent says its ETS administration may have to take into account the inclusion of biological emissions. “The possible addition of agricultural emissions to the ETS could place significant demands on the Register, and other ETS functions.”

The EPA said the effective operation of the ETS, and the integrity of the Register, are fundamental to the Government’s commitment to transitioning to a sustainable, low-emissions economy. “Policy changes to the ETS, to strengthen compliance and the scheme’s overall integrity, will require technical and operational adjustments to the Register. These adjustments will support potential linking of the Register with overseas registries, if this is needed to access international emission units.”

Meanwhile the inclusions of agriculture in the ETS and the Zero Carbon Bill’s reference to specific methane targets are making National’s support for the legislation increasingly unlikely.

National Leader Simon Bridges said this week it supported the first reading was because it supported many parts of it. " But if they keep the methane targets where they are, I made quite clear we may well change our position."
First published in Energy and Environment on July 4 2019

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