Labour might sweeten ETS deal for farmers

Labour might sweeten ETS deal for farmers

Labour might sweeten the carbon deal for farmers by letting them become the point of obligation under the Emissions Trading Scheme, Carbon News (www.carbonnews.co.nz) reports this morning.

The party raised the ire of farmers earlier this week by announcing a policy to bring biological emissions from the agricultural sector into the scheme in 2013, as it originally planned.

The National Government's 2009 changes to Labour's ETS included delaying the entry of the agricultural sector until 2015 at least.

It also set the point of obligation at the processor level. This means that rather than farmers themselves calculating emissions from their farming operations, it will be processors like Fonterra which will be directly liable for biological emissions generated by the agricultural sector.

Although this makes the accounting process more simple, it effectively denies farmers the opportunity to financially benefit from any reductions they make in the level of GHG emissions from their farms, according to Carbon News, the country's specialist information service on the carbon markets.

Labour Party environment spokesman Charles Chauvel told Carbon News that he expects the party to back its earlier policy of allowing farmers to choose to be in the point of obligation if they wish.

"In the original legislation we left the question open, so the point of obligation was at the processor level, with opt-in by farmers to recognise that there might be very good industry players out there wanting to be rewarded directly for their cuts in emissions."

Chauvel says that by allowing farmers to be the point of obligation, there could be big opportunities for them to financially benefit from reductions in greenhouse gas emissions.

"There are huge opportunities, particularly for the larger players, to show they are making a difference by adopting new technologies and practices to reduce their emissions," he said.

The head of the Government-appointed panel reviewing the current scheme says that the point of obligation is one of the issues it is considering.

David Caygill told Carbon News that this was raised in the submissions with the panel.

The review also considering if and when biological emissions from agriculture should enter the scheme, and Caygill says that this includes the possibility of entry earlier than 2013.

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