Farmers told to adapt to new emissions law

Federated Farmers still wants farm animals "out of the mix" of the emissions trading scheme, even though Agriculture Minister David Carter says the Government will ditch Labour's plan and have an ETS more like Australia's scheme.

Agriculture would still have to bite the bullet and face an scheme of some sort, Mr Carter said. The Australian scheme has a much longer transition process for farmers than Labour's original ETS plan.

But farmers would remain concerned, because they believed anything that sustains life should be out of the ETS, said Federated Farmers president Don Nicolson.

Speaking at its national conference in Auckland yesterday, Mr Carter said the ETS as proposed by the previous Labour government would be reformed more in line with the Australian model.

"I cannot pre-empt the outcome of the select committee's recommendations, but I predict we will end up with an ETS, but a far more balanced one," he said.

"The prime minister has always said that his government would not put environmental requirements ahead of our economy."

Some members of the audience congratulated Mr Carter and the Government for focusing on ensuring economic prosperity first instead of the environment.

But Mr Nicolson said Mr Carter's speech did not fill him with hope.

He said farmers involved with cow or sheep agriculture should not be involved in any carbon trading scheme.

"He didn't give farmers hope that he has done what Federated Farmers have promoted at the highest level, and that is animals are out of the mix.

"That will raise the consternation of farmers around the country because we want anything that sustains life taken out of the ETS."

A report for the select committee by the New Zealand Institute of Economic Research said agriculture accounted for 50 per cent of greenhouse gas emissions and would be the hardest-hit industry due to reduced competitiveness.

It found if the ETS as it stands was implemented, dairy farming would decline by 12.9 per cent by 2025, while sheep and beef farming would fall by 6.6 per cent.

Further, these declines would not necessarily mean lower global emissions because the production of dairy, sheep or beef would simply increase in countries not affected by a carbon trading scheme.

Mr Carter said farmers should focus on the issue of how "grandparenting" would be handled by a National-crafted scheme.

Grandparenting is the allocation of emissions trading units at the start of an ETS. It effectively delays the full effect of the ETS from hitting an industry, allowing it to adapt over time.

Under the current ETS, agriculture would initially get 90 per cent of its total emissions output and that would fall at the rate of 8 per cent per year.

Australia's climate change White Paper, released in December, proposed the rate start at 90 per cent and fall by 1.3 per cent per year. This would mean a significantly longer transition period.

Mr Carter said Mr Key was committed to not removing grandparenting at a rate that would ruin the economy.

However, he suggested that farmers would eventually have to fall in line with environmental obligations.

"In this area [of pollution] it is difficult to define what is a property right. In my mind, no farmer has the right to pollute the environment."

- © Fairfax NZ News