Big methane decisions lie ahead that will affect all New Zealanders
In late May, the eleven rural-industry partners in He Waka Eke Noa (HWEN) reached internal compromises that were sufficient for all to sign-up to a joint greenhouse gas (GHG) document, which laid out the bones of how they think agriculture’s greenhouse gases should be priced.
It went right down to the wire before Federated Farmers agreed to add their logo. Some of the other partners to the document were also less than happy, but the alternative of failing to come up with an agreement at all was even less palatable.
Now it will be up to the Government, taking account of forthcoming advice from the Climate Change Commission (CCC), to make some calls as to the path forward.
The Government does not have to accept the HWEN recommendations. Nor does it have to accept the advice of the CCC. But if it does not accept CCC advice, it is required by legislation to give reasons.
My bet is that there will be robust discussions within Government. There are some within Government, including senior members, who understand very clearly that they must not destroy agriculture. But there are also elements within the Government who are fundamentally antagonistic to New Zealand agriculture as currently structured.
One of the key reasons for antagonism towards New Zealand’s agriculture is serious misunderstanding as to the importance of primary industries in general, and pastoral agriculture in particular.
This lack of understanding is fed by the crazy way that we measure the importance of the agricultural sector in New Zealand. This starts with the measure of GDP, whereby agriculture supposedly makes up in the order of five percent of the economy.
This GDP measure is limited not only to what happens on-farm, ignoring everything before and past the farm gate, but it also includes only part of what happens on-farm. For example, shearers are not part of the sector. Nor is any contractor that comes onto the farm to plant a crop, make hay, make silage, or apply fertiliser. Nor are veterinarians or other farm-related professionals such as accountants. They are all part of the service sector outside agriculture.
Given the way the statistics are published, the only way to understand the importance to New Zealand of the land-based primary industries is to look at exports. More than 80 percent of New Zealand’s merchandise exports come from the primary industries. According to MPIs latest SOPI document, the pastoral industries by themselves are expected to earn $33.8 billion of export income for the 2021/22 year just ending. Where else can those earnings come from to pay for all the imports?
Unfortunately, most of the urban community does not understand that there are good ecological reasons why so much of New Zealand’s farming lands are pastoral. The combination of topography, soils and maritime climate determines that situation. If it were more profitable and ecologically sustainable to grow a lot more crops, then farmers would already be doing so.
The ‘bottom line’ arising from this situation is that New Zealand has responsibilities to itself, and also to others through the Paris Agreement, to protect food production. However, that does not let New Zealand ‘off the hook’ from having to minimise greenhouse gas emissions whenever it can do so consistent with its food obligations.
Returning to the HWEN issues, I expect there will be relative quiet in the media for the next few months. In part this will be because of the economic storm now descending upon the country and taking everyone’s attention. Beneath the surface, there will still be lots going on. It will only be a pregnant pause as the Government figures out how to proceed. Every Government member will be aware that the months are ticking by to the next election.
It has long been clear that many people on both sides of the farm gate hold fixed positions as to how agriculture should or should not be charged for its emissions. However, few people have a genuine understanding across the issues. Given the fixed views, it is very hard to hold a rational discussion and deal with some of the mis-information.
Here I will step back to try and put some structure around those issues.
There are two gases of major concern within agricultural systems. One of these is methane which is produced in the rumen of cattle, sheep, deer and goats. This methane is burped out as a natural by-product of grass digestion. The other gas is nitrous oxide, formed in the soil from the dung and urine these animals excrete from their other end.
Here I focus on methane, which gets most of the media attention. However, nitrous oxide is also important. That will have to wait for another article.
When human society first started thinking seriously about greenhouse gas emissions some 30 years ago, there was an almost total focus on carbon dioxide. Accordingly, when the focus subsequently widened to include methane, it seemed convenient to express this in so-called units of ‘carbon dioxide equivalence’. We have been stuck with that convention ever since.
The problem with carbon dioxide equivalence, written as CO2e, is that it is like trying to compare apples to oranges, or lemons to peaches. How many apples does it take to be equivalent to an orange? Do we mean by weight? Or by sugar content? Or by Vitamin C? Or some other unit. Each criterion provides a different answer.
Well, it is the same when comparing methane to carbon dioxide. Except that the key question there is the time period of the comparison. This is because of the very different length of time that carbon dioxide and methane remain in the atmosphere. Should we use 20 years, 100 years or 500 years as the basis for comparison? The focus to be placed on methane within climate-change policy is very much dependant on the answer to that question.
If we say that a 100-year time frame is important, then the warming caused by a tonne of methane is equivalent to approximately 25 tonnes of carbon dioxide.
Conversely, if the focus on the warming created over the next 20-years, then the so-called damage caused by a tonne of methane equates to about 85 tonnes of carbon dioxide. This is the period when methane does most of its damage.
However, if we extend our time horizon to 500 years, then the warming created by emission of a tonne of methane is equivalent to emission of about ten tonnes of carbon dioxide.
Scientists refer to the average time that methane remains in the atmosphere as its ‘atmospheric residence time’. Scientists are still refining their knowledge of this, but the latest IPCC figure is 11.8 years. That means that approximately half of the warming effect of methane emissions occurs in the first 12 years with the remainder occurring thereafter. By 100 years, well under one percent of the original molecules will be present. For those who are mathematically inclined, it can be approximated by a first order decay function.
In contrast, the scientific consensus is that carbon dioxide emission entering the atmosphere now will still be causing elevated levels of carbon dioxide in the atmosphere many hundreds of years and possibly thousands of years from now. The maths of carbon dioxide removal from the atmosphere is particularly complex and there is still lots to learn.
One of the features of New Zealand agriculture is that methane emissions have been approximately constant for more than 20 years. This means that the cloud of NZ-sourced methane is approximately in balance, with newly released methane approximately balancing methane decay. There are some who therefore argue, and do so vociferously, that farmers should not be charged for their emissions as long as this balance is maintained.
When I started writing this article, I had planned to say a lot more about the above argument, including both its strengths and weaknesses. But that will have to wait for another time. What I will say here is that although the ‘atmospheric balance’ argument can be and should be an important part of the debate, there are also important counter arguments that need to be acknowledged as to why it does not let agriculture ‘off the hook’. I can see another article coming up on that issue alone.
A key point about converting methane to carbon dioxide equivalence is that it depends not only on science. It requires a value judgement as to how we weight the importance of the very long-term future compared to the nearer term. And should New Zealand farmers be ‘grandfathered’ and therefore allowed to continue the farming of methane-emitting animals as they have always done?
Well, that is indeed enough for this article. But alas, I have only scratched the surface. A final point that I do want to emphasise is that methane debates must start with a basic understanding of the science. But that is just the start. The debate also requires value judgments as to what is important, what is fair and what is reasonable. Within that framework, there is no absolute right and wrong.
Thanks Keith for this lucid and balanced article and I look forward to the next and the next. From Australia, where farmers are only just starting to wake up to the fact that they will be part of the global warming debate, NZ looks easy as NZ does not have 6 States and 2 Territories all arguing before it even reaches the Commonwealth level. We will watch with interest.
The government, in its response, has to predict the future international consensus regards weighting methane emissions from agriculture relative to CO2 from fossil fuels. The latest IPCC AR6 summary in chapter 7 has definitely moving away from GWP100 to some variant of GWP* with “high confidence”. https://www.ipcc.ch/report/ar6/wg1/ The smart money would be that within a decade this approach will also be adopted for international agreements. In the interim, NZ has sensibly adopted a split gas approach along with targets for reduction in individual GHG gases. The debate should now be moving towards: are the target changes announced sensible, and will the proposed HWEN pricing and associated actions actually achieve them?
Well point John.
NZ did the right thing leading on a split target ZCA. The premise of that was around ‘stabilising to slight reduction’ of methane and net zero N2O & CO2.
Some clever fella then decided that taking the inner quartiles of a range of scenarios for methane options at a global level would be a good ‘range’ for NZ methane target. So we got 24-47% reduction 2050.
A non biased, logical person would have concluded. NZ should come up with its own target, based on the science, our emission type, social environment etc etc. as well as the logic to say, ‘wow that is a big range is 24-47% is the inner quartiles, imagine the options & opportunities vs CO2, at always comes up with net zero, reduce fast, & even negative emission from such models.
Then we come to HWEN. ‘Split gas’. The reason to split gas is to treat them differently. HWEN hasn’t done this. They are just taking an annual emission x a price. That might as well just be CO2e…. It doesn’t work, it isn’t fair or just approach.
HWEN is focused on a levy system to raise an amount of money indefinitely. If a farmer achieves our 10% reduction 2030 methane target, they would still pay 90% of the cost of not doing anything. That does not align for methane!
As for N2O. Our target is ‘Net zero 2050’, yet HWEN comes up with the idea that if on farm sequestration is ‘eligible’ for the ETS a farmer cannot use it in HWEN to offset their emissions. That is daft from both the target & the market point of view.
The first thing the sector needs is a GHG strategy / plan. ‘Pricing’ is just an outcome. It should never have been the question asked of ICCC, then HWEN, then IPCC two question focus of the first ‘pricing’ question. What a shambles & lost opportunity
If specific sequestration was eligible under both ETS and HWEN then there would be double counting of the benefits.
Of course you can’t have double counting.
You should have the option as to whether you want to use of your sequestration via the ETS to ‘offset’ commodity fossil fuel consumption. Or use to provide ‘net zero’ nutrient dense food that better aligns with real market value, and values.
Not to mention that PCE 2019 report states that biological sinks should be used to offset biological emissions first and foremost. They better align in terms of warming impact / offsetting.
Look at the ‘market’ volatility of the NZ ETS price. Market value of credits for carbon, biodiversity and other ecosystem value will come via more holistic programmes v fossil carbon focused.
It is important to recognise that any sequestration included in HWEN will be directly funded by other farmers through levies on methane and nitrous oxide. The more sequestration that is included, the higher the farmer levies will have to be to fund it. It will be a case of Farmer Peter being levied to pay Farmer Paul. This is very different to the ETS where it will be paid by emission charges on CO2 collected from polluters. From a farmer perspective, and also our international commitments, it is much better for the funding to come from the ETS.
Sounds like you going all political & social science on methane Keith?
Not sure why in the above the premise of CO2e for those different periods relate to RF, and a pulse of the emission.
We know; CO2e RF when related to surface temperature impact (temperature / warming impact – what Paris agreement is about) is simply not ‘equivalent’ at all!
We also know food production systems are multi-year biological systems, not ‘pulses’.
And that, makes CO2e, and HWEN annual addition of methane x a ‘price’ a farce.
It’s amazing what solutions will be found when Minister Parker has the Sword of Damocles hanging over your industry.
Taxing food as a solution to a hypothetical problem just doesn’t seem like a sensible approach – especially in the absence of a medium term technological alternative that reduces “impact” but doesn’t affect yield.
How about a potential solution that will improve productivity…
Bringing up technology opens the stable gate to ride my hobby horse into the discussion (biochar… apologies to Keith). By my very simple calculations (happy to share), feeding a cow with about 130 grams of biochar (charcoal) per day will sequester 10% of the CO2e from their daily methane production. This would be before considering:
enteric methane reduction from the feed supplement,
improved feed conversion efficiency,
CDR revenues form voluntary carbon markets,
longer term cascading benefits for soil, water, environment, productivity,
many farmers could make their own while managing waste biomass.
So why almost zero commitment or interest for fresh R&D in NZ.
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Thank you for your article Keith. Nearly 30 years ago one of my economic policy students did an interesting project on methane production in agriculture. He concluded that there was a case for a Pigovian tax on emissions. I gave him a high grade because he had researched extensively (mainly US journals) but I never thought any government would actually tax emissions.
Dr William Rees
“Within a broadly anthropocentric utilitarian framework, society can arrive at a satisfactory (i.e., politically acceptable) trade-off between ecosystem integrity and growth through power-brokering, negotiation, and compromise. Certainly biophysical absolutes have no seat at the bargaining table.”
We should be afraid, be very afraid!