1 May 2008
The phasing in of sectors, such as agriculture, into the Emissions Trading Scheme is a realistic and necessary way to minimise the disruption to the economy and give people and their business time to adjust, says New Zealand Agriculture and Forestry Minister Jim Anderton.
Anderton was responding to a call by the Sustainability Council that agriculture should enter the ETS immediately and pay full liabilities for emissions over 1990 levels.
“We need to remember that New Zealand is the first country in the world to consider bringing the agriculture sector into an emissions trading scheme. This is not a small matter and there are significant challenges to overcome,” Anderton said.
“The agriculture sector is the most important source of export income for New Zealand, representing around 65% of total merchandise exports.
“By phasing agriculture into the ETS over time and in a measured way the taxpayer is actually investing in a transition that benefits the economy as a whole. It is true that the costs are being shared about and managed in a pragmatic way but the alternative would create too violent a shock for businesses.”
Anderton said the Sustainability Council had identified mitigation opportunities for agriculture, but none had been accepted internationally as yet and therefore did not qualify for carbon reductions in New Zealand’s carbon accounts.
At present, the European Union considers that bringing the agriculture sector into its emissions trading scheme would be impractical.
“The New Zealand Government made a promise to the sector back in 2003 not to introduce a price measure on the sector in the first commitment period as long as the sector invests in research, which the sector is doing,” Anderton said.
The government has undertaken to work with the agriculture sector to explore whether a farm level point of obligation would be feasible or cost-effective, which would represent a whole new order of magnitude of complexity with more than 30,000 possible participants.
“Farmers are not getting let off the hook here; they are also large energy and fuel users and will be paying the carbon costs associated with these in 2009-10 like every other business and household in the New Zealand,” Anderton said.
“Meat and dairy processors will also face increased costs from 2009-10 and these are likely to be passed on to farmers.
“Furthermore, the sector will be responsible for all of the growth in methane and nitrous oxide above 90% of 2005 emissions when it comes into the scheme in 2013, so the clock has already begun ticking. It is for this reason the Government is already working closely with the sector on developing and implementing technologies to reduce emissions.”
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