Why a carbon tax is udderly useless to us

WORSE OFF?: Federated Farmers vice-president Dr William Rolleston says the world will be worse off if New Zealand farmers cut dairy production because of a carbon tax.
WORSE OFF?: Federated Farmers vice-president Dr William Rolleston says the world will be worse off if New Zealand farmers cut dairy production because of a carbon tax.

The overwhelming scientific consensus is that human activity, including agriculture, plays a significant role in climate change.

Yet the Green Party's proposal to tax biological emissions is bad policy for climate change and the economy.

Along with every other New Zealander, farmers already pay for their carbon-dioxide emissions in the current Emissions Trading Scheme. The issue, the Greens argue, boils down to biological emissions in the form of methane and nitrous oxide.

Methane is a powerful but short-lived greenhouse gas generated by bacteria in the stomach of farm animals. It lasts around seven years before being converted back to carbon dioxide which is taken up by plants. The methane cycle is complete when animals eat those plants in turn. Methane is measured as kilograms of carbon dioxide based on a 100-year time frame.

This time frame has been chosen by international agreement but any period could have been chosen.

Because methane is short-lived, but carbon dioxide from fossil fuels cumulative, this choice of time frame materially affects the calculation of methane in carbon-dioxide equivalent units and our perception of it.

Nitrogen enters farms from the atmosphere through nitrogen fixing plants and the application of nitrogen fertilisers. Some of it is lost to the atmosphere as nitrous oxide, otherwise known as laughing gas, by direct bacterial conversion or through animal wastes naturally breaking down. Nitrous oxide is longer lasting than methane but is also recycled.

Some would argue that the recycling of these gases tends to overstate agriculture's contribution to climate change.

What is beyond doubt is that as the world population continues to grow, so does the demand for animal protein. New Zealand produces less than 1 per cent of the world's animal protein so even if we stopped farming today, it would have little effect on world prices since our lost production would be replaced by others.

It is here that views on what to do about New Zealand's biological emissions diverge.

As the Greens' carbon tax proposes to tax dairy, with the door ajar for sheep and beef later, it would make us the only country on Earth to emissions-tax primary food production. With no commercially viable tools to reduce farm biological emissions, even the Greens' report acknowledges 10 per cent of our dairy farms would be vulnerable, making our dairy industry less competitive.

To significantly reduce our total biological emissions, we would need to slash production. With current technologies, that is achievable only by cutting livestock numbers, meaning less income for New Zealand to pay for our roads, hospitals and the things we need from overseas.

In 1990, the value of dairy exports was just over $2 billion but in the year to April 2014, it was a staggering $15.2b.

Yet a carbon tax on New Zealand dairy farmers is bad for climate change. We need cool heads, if you excuse the pun. Panic only leads to poor decision-making.

A carbon tax, Greens co-leader Russel Norman argues, would encourage the development and implementation of new technologies to improve carbon efficiency through increased productivity. But such a tax perversely takes from an industry money that is better spent on developing low-carbon technologies. If Norman's statement is the measure, then farmers' actions prove it is not needed.

In 2011, Rosie the cow produced milksolids with 24 per cent fewer emissions than her forebear did in 1990.

At a year-on-year improvement of 1.14 per cent, our dairy farmers have saved around 5 million tonnes per year of CO2- equivalent emissions by becoming better farmers.

Even the United Nations Food and Agriculture Organisation (FAO) believes we have the most carbon-efficient dairy farmers on Earth.

This is why reducing our production becomes a global-emissions own-goal as less-efficient nations will fill the gap.

Given our carbon efficiency in dairy is almost twice the world average, if we transferred our dairy production overseas, net global emissions would increase by a staggering 13 million tonnes per year.

Hard as it is to accept, we are doing our bit for global emissions by farming.

I suspect there are elements within the Green Party who understand this conundrum, which is why their response to agriculture has been ambivalent.

Furthermore, farmers are investing millions of dollars on research to mitigate agricultural emissions through the Pastoral Agricultural Greenhouse Gas Research Consortium. In partnership with the government, the aim is to increase feed conversion through reduced methane production while better utilising a valuable farming input - nitrogen.

The UN's FAO report concluded that improving productivity was the key to reducing the impact of biological emissions on climate change and New Zealand farmers were playing their part.

We are also helping others and later this year, Federated Farmers, the World Farmers Organisation and the Government will host a group of international farmers focused on carbon efficiency. Increasing productivity increases carbon efficiency and climate change policies that deny this render a carbon tax misguided at best.

Hard as I look, I cannot find any global or local benefits in a carbon tax on biological emissions from agriculture.

* William Rolleston is vice-president Federated Farmers New Zealand.

The Dominion Post