New Zealand agriculture is doomed and the country will go bust if it adopts measures to restrain carbon emissions, claims Dennis T Avery of the “centre for global food issues” at right wing US think tank the Hudson Institute. Avery is notorious as a vocal climate crank, and was invited to speak at last month’s Agribusiness conference in Blenheim. His message was standard crank nonsense, as the Marlborough Express reported:
Charging farmers for carbon emissions is unfounded and will cripple the New Zealand economy, according to a United States expert on global warming. […] “Do not let them send you out of business. Don’t go quietly. Not only will [a carbon tax] kill you, it will kill the entire economy of New Zealand.”
The alarmist message is underlined in an article he penned on returning home to the US:
No country in the world would risk as much for “global warming†as New Zealand if it goes ahead with the cap-and-trade energy taxation installed by Helen Clarke’s now-departed Labour Government.
Avery’s do-nothing line might have gone done well with some at the Agribusiness conference, but it apparently didn’t find much favour elsewhere:
I said this recently to several New Zealand government ministers and business leaders at a private dinner in Wellington. My message was not welcomed. John Key’s new government seems to understand that New Zealand’s economy would be at terrible risk from carbon taxes — but its voters apparently don’t realize it.
Intriguing. I wonder which ministers he met, and who organised the dinner? And who still thinks Avery is remotely credible on climate issues? Just look at his handy summing up of why action on climate change isn’t necessary:
Never mind that the earth’s global warming stopped after 1998 because the sun has gone into a startling quiet period. That’s why New Zealand’s many glaciers have been growing recently instead of receding. Never mind that even full member compliance with Kyoto would “avoid†only about 0.05 degree C of warming over the next 50 years—by the alarmists’ own math.
Avery is making stuff up — telling lies in an attempt to influence policy. NZ’s glaciers growing? Not what the figures show, Dennis. But then if you think global warming stopped in 1998, you’re clearly not the sharpest pencil in the drawer. It’s a pity the organisers of the Agribusiness conference hadn’t spotted that before inviting him over here to mislead, misinform and misdirect.
As usual, Gareth’s ‘reporting’ is limited to name calling and evidenced attacks at the peripherals (well one peripheral in this case – glacier growth/retreat).
I think the main point Dennis had here was that;
“Charging farmers for carbon emissions is unfounded and will cripple the New Zealand economy”
Doesn’t seem you have any comment on this except to dismiss it as crank theory. The average working class NZer in Mangere, Upper Hutt, Te Kuiti, Timaru, or Invercargill however feels the same way (ie is more interested in a stable NZ economy than feel good climate policy that will cost each household $3000 a year (NZIER study)), as this report shows: (conducted by the business council for sustainable development)
The sample here ranked climate change the 6th most important issue, while ranking the cost of living, economic recession and household finances as all more important. I would say the assertion in this article that voters want climate policy is wrong.
[Always best to put really long links inside html tags. Done that for you. GR]
Both of Dennis’ “main points” are themselves “unfounded”.
There is a clear need for all exporters to factor carbon into their costs, and consider how their emissions profile is going to look in overseas markets, because the carbon problem isn’t going away (as Dennis asserts).
The evidence that it will “cripple the NZ economy” is either absent from his articles, or based on rubbish research (the NZIER report you reference has as an assumption that NZ acted on its own and that nobody else took any action!).
As for the NZBCSD report you helpfully reference, I would recommend HT readers look at what it actually says… because it is a lot more nuanced than R2 suggests.
Interesting planet you live on, R2, although the oxygen levels seem low.
Of course the survey (working url) found that 59% strongly feel that climate change is a problem. That they think some other things are even more of a problem doesn’t somehow make climate change less of one.
Re the glaciers, it’s amusing that Avery would choose a local statistic that many will be familiar with and that can be so easily checked.
If Avery is so concerned with the NZ economy then he might at least have investigated who our major trading partners are, and in particular which of these were large importers of NZ primary produce. Not only is he completely out of touch with the realities of NZ glaciers – he is also out of touch with the sensibilities of one of our major trading partners – the EU. To suggest that NZ agriculture can quietly continue to emit methane untaxed or unaccounted by an ETS, is to overlook the fact that that will be, in the eyes of the EU, nothing more than a subsidy. Our farmers claim that they are unsubsidised and demand access to the EU and the USA by right because of this fact. But it is a changing economic world, and unfettered, unregulated, and growing emissions of methane, nitrous oxide, and carbon dioxide by our agricultural sector will not go unnoticed overseas.
I think R2 is conflating the NZIER and the NZBCSD reports. They are quite separate.
So how many of our major trading partners have introduced an emissions charge on agricultural methane and nitrous oxide?
The EU has committed itself to reducing emissions by 8% from 1990 levels by 2012. Because the EU is heavily industrialised (and we are not) most of their reductions will come from non-agricultural areas. Even so approximately 13% of greenhouse gas emissions are form agriculture. Whether or not the EU have introduced an emissions charge is neither here nor there. They can quite readily point at NZ and say “we are making the effort – you are not – your produce will incur tariffs.”
49% of our emissions are agricultural.
According to Europa.eu the EU ETS covers 40% of emissions
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/35&format=HTML&aged=0&language=EN&guiLanguage=en
We could exclude agriculture from the NZ ETS and cover a higher % than the holier than thou EU.
Yes the EU may introduce non-market measures to reduce agricultural emissions, but so could we.
Putting an emissions tariff on agricultural production when the EU does not itself have a price on agricultural emissions would not fly well with the WTO, and it would not be an emissions policy, it would be trade policy in disguise.
Even if the EU was to introduce a charge on agricultural emissions, it would be a case of taking 10 here giving 100 there, as they already heavily subsidise agriculture,
“Greek farmers, for example, receive some €600 euros a hectare of arable land, whereas Latvia’s farmers get under €100”
http://www.euractiv.com/en/cap/ministers-mull-farm-policies-public-good/article-182787
For a typical 100Ha dairy farm thats between NZ$140,000 and $20,000, or about $1.40 – 20c a Kg/MS subsidy. Until they have emissions charges higher than this we are in credit in terms of not helping our farmers. Yet you think we need to punish them to avoid trade penalties???
I maintain – we have no need to feel we need to tax farmers for agricultural emissions. Indeed it would be pointless, ideological, economical suicide to do so.
And yet, they pay income taxes, and ACC levies, and meet regulations designed to maintain water quality (however poorly). A “tax” — or to be more precise — a pricing mechanism — that encourages our farmers to move to lower carbon methods of farming will ultimately prepare them for the future. That’s not economic suicide, it’s prudent forward planning.
Avery may want to assert that there’s no need for this stuff, but he’s a liar and deserves to be ignored. You don’t have that excuse, R2. So what are you? Ideologue?
Phfff yeah right, I’m the ideologue. Too funny.
They pay taxes and levies comparable to every other developed nation in the world and enjoy a safe, free, healthy environment to run their business in return. They even refuse to ask for subsidies that other nations receive, instead pushing for liberalised global trade. They have made rapid progress to reducing nutrient use and run off.
But don’t confuse the issue (intentionally- because you are the ideologue)
We are talking a needless charge incomparable to any other country. We are talking the entire economy of rural New Zealand. We are talking by far our biggest export earner (56% of merchandised exports). We are talking by far our biggest driver of growth – agriculture has out performed GDP 27 of the last 25 years.
Wake up NZ this is needless economic suicide.
Still think it’s going to cost $3,000 each?
If NZ introduces an emissions tax on agriculture while other nations do not there will be a shift in production from NZ to those other produces, this could actually result in higher total emissions, as we (as I understand it) produce lower emissions per unit of production.
Apparently the agricultural sector is incapable of change despite the fact that it has changed enormously over the last 25 years.
I remember the cries of anguish from the farmers in the mid 80s when the subsidies were removed that it was going to destroy farming, but it didn’t. It did have a tremendous adverse effect on sheep farming, but farmers moved into other areas such as dairying.
Yet according to some they have now lost any capacity to adapt, let alone take advantage of, different economic conditions. Talk about pessimistic.
They have two options be proactive and prepare for a world that where carbon is priced, or wait until they are forced to change and have to play catch up. The latter option will be more risky and costly. The former approach seems to me to be more entrepreneurial and isn’t that what this Government is all about?
To that Doug I would say that back when subsidies were removed, all they had to do was operate like a proper business which is subject to markets, or fail. In this case, technology adaptions above all else are CRITICAL, but my casual impression is that there are only some, and nowhere near enough to not seriously damage some/most farmers.
…if they take the full cost.
I hate to intrude with mundane facts, but…
IIRC the current ETS (which agriculture doesn’t join until 2013) grandfathers 90% of agricultural emissions at 2008 levels — ie, farmers are not charged for them. The free allocation winds down over time, but very slowly, so no agricultural business would be exposed to the full cost of its emissions for a very long time indeed. However, there would be a clear price signal in the margin to encourage low carbon practises.
Sharing out the free allocations could be an issue, though. I seem to recall that some dairy farmers were arguing that post-2008 conversions should not get a share of the free allocations, because to do so would dilute their own allocation. Of course, if new dairy conversions are exposed to the full cost of their emissions, they may be less likely to take place. Is that a good thing? There are certainly those who would say that it is… 😉
Thank you Gareth. Yes I was aware that it is quite a gradual roll in though the ETS WILL be altered by National and co. I suppose I was addressing the point that a few make that agriculture should not get a ‘free ride’, though perhaps ‘slightly free’ would be more accurate.
More facts: MAF have done some modelling on the ETS impacts of various agricultural sectors, assuming 90% free allocation and no free allocation, using their ‘model farms’.
http://www.maf.govt.nz/climatechange/reports/Projected-Impacts-of-NZETS.pdf
Page 8 has the pertinent numbers. But note the variable effect on farmers profitability according price for products, as shown in the figures on page 9 and 10.
Thanks for that link, password1. Also note that MAF suggest that use of nitrification inhibitors can increase profitability even under high carbon prices.
The critical sentence in the MAF report however is this:
“This analysis also speaks nothing of the potential costs to New Zealand agriculture of doing nothing to address greenhouse gas emissions in the sector. ”
What will the payout to dairy farmers be then, if the EU refuses to import our butter – or charges $50 per ton of carbon emissions as an import tariff?
Again back to the EU tariff argument. This holds no weight as an NZ ETS without ag would still cover a greater % of our emissions (51%) than the EU ETS covers (40%).
They over allocate anyway, phase 1 prices dropped to below a tenth of a euro at the end when there was no demand for units.
I think you need to read the WTO trade rules. My understanding is that unless we are not doing equal or greater than them they can not place an environmental tariff on our goods. Until they include ag emissions in an ETS NZ Ag is fine.
The draft US legislation includes measures for tariffs but it is basically aimed at China (does not include ag emissions). Again it requires that countries goods to be at a competitive advantage because of lack of climate policy, it also requires the target country to be greater than 0.5% of world emissions, of which NZ is not. It also requires that measures are not introduced until post 2023, and condition on a presidential review.
Gareth, no article on Japan targets released today? 2020 target 2% higher than 2008-2012 Kyoto target.