Climate roles for agriculture and forestry welcome

18 December 2006

Media Release

Business welcomes move to consider climate change roles for agriculture and forestry

The launch of a major discussion on policy options to give agriculture and forestry a role in managing and profiting from climate change is being welcomed by business.

The launch of "action plan" options by the Government recognises that agriculture and forestry need to play a role in climate change management, according to an organisation representing most of New Zealand's major business leaders, the New Zealand Business Council for Sustainable Development.

"The Government's options announcements are to be welcomed because they are prepared to look at both carrots and sticks to achieve change, that we can't ignore the largest source of greenhouse gas emissions (agriculture), and that it will take time to adjust," the Business Council's Chief Executive, Peter Neilson, says.

"The options also recognise the potential for returns from agriculture's involvement in low-emissions technology, and it's significant that they talk of funding more research in that area, with a view to making New Zealand a world leader.

"This will help significantly to secure our trade access abroad. It's important New Zealand is seen to be doing something significant to reduce its emissions," Mr Neilson says.

The options also send a clear signal that there will be a move to a carbon trading system for agriculture and forestry.

"The options recognise the importance of providing clear price signals for land owners contemplating moving between forestry and pastoral farming.

"It also indicates there is potential for emissions trading in agriculture and forestry before 2012. It will provide a strong signal to agriculture that future production will have to cover the cost of carbon. The initial reaction may be that this might make New Zealand uncompetitive. New Zealand is already producing fewer emissions per kilogram of milk or meat protein than other countries, but if we don't tackle emissions in business-friendly ways, then we're vulnerable to food miles arguments and increasing consumer preference worldwide for greener products and services.

"The price of carbon we are talking about currently, of less than $20 per metric tonne, is only one fifth of the increase in energy cost we saw earlier this year when petrol went up to $1.71 a litre, the equivalent of a carbon tax of more than $100 per tonne."

Mr Neilson says the devil will be in the detail, but an emissions trading regime might be better and more effective, cost-efficient and practicable than local government administered emissions limits.

"An emissions trading regime for forestry, for example, would allow forest and land owners to decide the best-value location for forest sinks and for forests which will be harvested. Otherwise we'll potentially be subjecting people to 86 different policies at local authority level. A trading regime will also recognise the value of carbon in the forests people now own and will obviously involve granting 'grandparenting' rights to recognise that value," Mr Neilson says.

Moves to encourage commercialisation of new emission-reduction technology are also welcome.

"The Government could consider the UK government's approach and look at setting up a venture capital fund, involving both Government and private sector investment, to rapidly commercialise research and other new climate change technologies in which New Zealand can be a world leader."

Mr Neilson says there are exciting and major opportunities for the country and farmers to profit from the bio fuels industry (by growing bio fuel crops, and using resulting low-emission feed products for stock), other research to lower animal methane emissions, and the global commercialisation of a New Zealand venture which can make bio fuel from sewage pond algae.

ENDS

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