Weighing the pros and cons of He Waka Eke Noa options For more than two years a partnership of agriculture sector groups, iwi and government agencies have been discussing alternative livestock emissions pricing mechanisms. The partnership, known as He Waka Eke Noa, is due to present recommendations to the government in April. If the sector can’t agree on a workable alternative, or He Waka Eke Noa’s proposals are rejected by the government, the government’s ‘backstop’ of including agriculture in the ETS is triggered. In this column Federated Farmers of NZ President Andrew Hoggard discusses the merits of the emissions pricing alternatives. For those wondering what Feds’ position on He Waka Eke Noa is – well, at this stage my opinion hasn’t changed from what I outlined prior to Christmas. Both options have some benefits over the ETS, the ‘backstop’ alternative imposed by the Government, they each have positives and negatives. On the positive side, both He Waka Eke Noa options presented recognise the split gas approach with a separate price for methane, both account for sequestration, and both recycle any money raised back into agriculture. At present the ETS does none of these. The Farm Level levy more accurately reflects the individual farm actions, unlike the processor hybrid levy, but it has very high admin costs, unlike the processor hybrid levy. Finally, with both of them there is concern that the price gets set by some committee which we may not have a lot of control over.
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Goat & Sheep Milk NZ - Issue 5 | February 2022
Personally, the idea of committees setting prices is a little too Politburo-ish for my liking. We still don’t know how the price will be set or what the price will be and there is a risk of a split gas approach taken in name only, with short-lived methane emissions being overlytaxed. Farmers who are really performing well in terms of minimising their farm’s greenhouse gases will still end up paying a price, which grates me. Under the ETS that is going to happen as well, but at the same price as other gases not a split gas price. This is all further complicated by the Government saying the ETS backstop already in legislation may not be the backstop they go with. They’ve said they intend any backstop ETS tax paid by farmers would be invested back into the agricultural sector to support further emissions reductions. This could include elements of revenue recycling designed through He Waka Eke Noa, such as the sequestration recognition.
