Emissions landscape not as clear-cut as tech firms good, farmers bad

By September 10, 2019 News No Comments

ExportNZ supports the goal to reduce our greenhouse gas emissions along with the rest of the world. But we are seriously concerned about the survival of our food-producing export sector and our energy-intensive firms that export.

That is because economic analysis done by NZIER for the Ministry for the Environment shows that to get to net carbon zero by 2050, the price of emissions needs to be about $272 a tonne, under the most optimistic scenario. It factors in innovation breakthroughs in energy and farm animal emission reductions, and access to international emission reduction credits.

Given that the price of carbon is currently about $25 a tonne, this is a huge price increase which will flow through into the cost of food and energy. If other countries don’t adopt similar constraints leading to similar prices, we will put our farmers and our energy-intensive companies out of business. This will not just be bad for our economy but bad for the environment as well.

That is because we are verifiably less emissions-intensive producers of food and energy than other countries and if we price ourselves out of the market, other countries will fill the gap we leave with increased greenhouse gas emissions for our planet.


This problem, which is called “carbon leakage”, is why tackling this global challenge is such a wicked problem.

An OECD agricultural expert was recently in New Zealand. I asked him whether other countries would put a price on emissions from farming and food production. He said New Zealand is leading the rest of the world in lower emission farming already, both the way we farm (grass-fed) and due to our 20 years of greenhouse gas research. He said no other country would be likely to include agriculture in emissions trading schemes, either because it was a small part of their economy, or they were developing countries.

According to some economists, by the time the price of emissions gets to around $75 a tonne, most of our livestock farms would be converted into forestry. In my opinion this would happen way before that price was achieved.