Paying the price for our hot air

A review of the ETS scheduled to begin by the end of the year could result in a change of policy.

The fundamental argument for inclusion is based on the misunderstanding of who contributes to the ETS and why, illustrated by statements from Greenpeace: "We don't see why there should be any objection to farmers doing their bit and contributing like other sectors, and like the taxpayers and like energy consumers."

Farmers are doing their bit and are contributing through taxes and energy consumption, just like other NZers.

It is the animals that aren't – they are just doing what comes naturally and the expertise of NZ farmers means that milk and meat products from NZ are associated with rather fewer GHG emissions than many countries can achieve.

But agriculture does contribute almost half the emissions from NZ.

Environment Aotearoa 2015, released by the Ministry for the Environment and StatisticsNZ last month, identified GHG as an area of concern because of increases. NZ still contributes only about 0.1% of emissions globally, but they increased 42% between 1990 and 2013. During that time agriculture increased by 14% to its current contribution of 48% of the total, while the energy sector increased 32% (more than double agriculture's increase) – now contributing 39% of the total.

Most countries have decreased their emissions by cleaning up industry, moving to renewable power and improving public transport. For NZ there are no simple options.

The OECD Economic Survey: New Zealand 2015, states that 'NZ faces difficult climate change challenges because of the high share of its greenhouse gas (GHG) emissions coming from agriculture, where there are few cost-effective abatement possibilities and because three quarters of electricity already comes from renewable sources, meaning there are fewer potential gains in generation'. The OECD also notes that transport emission intensities are high, reflecting low use of public transport and poor average vehicle fuel economy.

The OECD's solution is to reduce vehicle GHG emissions (responsible for 19% of the total), by moving towards a plug-in hybrid/electric vehicle fleet and it recommends that the Government develops a cost-effective public network of charging points to encourage their use.

Barry Crump will be turning in his grave....

For agriculture the report suggests developing a strategy to cut agricultural GHG emissions efficiently through a combination of pricing, regulation and R&D. The R&D is underway, and vaccines have been identified that could halve methane emissions. Their use is, however, several years away.

Speaking at the East Coast Hill Country Symposium held in Hastings, at the end of October, Ecologic's executive director Guy Salmon went as far as to propose removing ruminant animals from NZ! This caused consternation to Minister of Economic Development Hon Steven Joyce, because ruminants account for a huge portion of the export economy.

The answer could be to tax products at point of consumption in home or restaurant.

Professor Ralph Sims, Massey University's expert in renewable energy and a member of the IPCC Global Energy Assessment Group, points out that people have choices about what they eat and where it comes from. Taxing for GHG at point of consumption might affect their choices to NZ's advantage through premium prices.

The same can be said about transport decisions: an improved network of charging stations could encourage the switch from fossil fuel cars (with apologies to Crumpy).

Animals, however, don't have choices. They just do what comes naturally. Taxing them won't change their behaviour and reducing their numbers will affect the economy.

The Government wouldn't then have the money to invest in the public network of charging points for our new cars... Barry Crump would have something to say about that logic, as well.

• Jacqueline Rowarth is professor of agribusiness, The University of Waikato.