These carbon budgets determine how much each sector should emit over three five-year periods (2022-2025, 2026-2030, and 2031-2035).
In response to the Climate Change Commission’s carbon budgets proposal, DairyNZ has made a comprehensive submission backed by economic, farm systems and scientific evidence.
DairyNZ is firmly committed to dairy farming playing its part in transitioning to a low-emissions economy alongside the rest of New Zealand and supporting the delivery of the Zero Carbon Act.
We want this transition to be equitable, fair, and grounded by scientific, economic, social, and cultural considerations.
Key aspects to be addressed before the Commission’s report is finalised
- DairyNZ is concerned that the Commission’s draft carbon budgets ‘shift the goalposts’ for farmers i.e. the draft carbon budgets increase the level of reduction required beyond what is contained in the Climate Change Response (Zero Carbon) Act. We do not consider this is justified based on the mandate, nor the science, economic, or farm systems assessments.
- DairyNZ does not believe the pathway modelled by the Commission for biogenic methane reductions is realistic. The Commission’s pathway assumes changes in farming practices and current technologies beyond the limit of what we, as sector experts, are confident can be achieved.
- DairyNZ does not agree with the Commission’s underlying assumptions, particularly in their assumed future productivity improvements, and the stacking and scalability of mitigation solutions that are based off the work of the Biological Emissions Reference Group report.
- We disagree with the Commission’s assumptions i.e., fewer cows, less dairy land to achieve the same production, with less methane, equalling more milk solids per cow and less methane per kg of milk solids.
- DairyNZ wants to ensure the Government uses the most appropriate metric to account for the warming effect of different global greenhouse gas emissions. We would like to see comparative reports using both GWP100 and GWP* metrics and a more thorough consideration of these issues.
- DairyNZ finds the modelling for distributional impacts on rural communities to be inadequate. These impacts should be considered in detail, as part of the Commission’s assessment. Our analysis shows:
- 34% of farms could go backwards financially in the Commission’s ‘Our Pathway to 2035’.
- All scenarios in the Commission’s advice result in milk production falling by 2035 (not remaining static, as stated by the Commission). This ranges from a 7% reduction under Headwinds to a 13% reduction under
- Losses in GDP are between 0.98 % (Headwinds) and 1.4% (Our Pathway to 2035) per annum. These correspond to annual losses of $1,665 and $2,393 per household in 2035.
We seek to work with the Commission to resolve these issues.
DairyNZ agrees with the Climate Change Commission
- A split gas approach better characterises the differences between long-lived and short-lived gases and is an appropriate science-based target for biogenic methane. This recognises that New Zealand does not need to reduce biogenic methane emissions to net-zero to do their part to reduce warming – a reduce and stabilise pathway is appropriate.
- The dairy sector is vital to the New Zealand economy and has a part to play in reducing emissions. The responsibility we hold for future generations can build on our greenhouse gas efficiency journey to date.
- Enabling a successful outcome for He Waka Eke Noa is critical and that the Government/industry partnership must be enduring.
- Future technology solutions for biogenic methane are essential for New Zealand’s overall pathway to 2050.
- A long-term plan and investment for targeted research and development of new technologies to reduce biogenic methane emissions is critical. Continued support and increased co-investment from the Government and the agricultural sector will be required.
- The Rural Broadband Initiative needs to be resourced and prioritised to achieve its 2023 Target. These actions will drive greater business efficiency, better decision-making, and keep communities better connected
- We support the principle that New Zealand cannot plant our way out of climate change. We would like to see more detailed information on the distributional impacts of conversion of 420,000 ha of land to new forestry for farmers and rural communities.
You can listen to Roger Lincoln (DairyNZ principal policy advisor) Nick Tait (DairyNZ Climate Change project lead) and Fraser McGougan, (dairy farmer and Climate Change ambassador) explain the Climate Change Commission’s draft advice and action the dairy sector is taking to reduce emissions at our recent webinar (below).
Read frequently asked farmer questions on the proposals.
A breakdown of what the Commission has recommended
- The Commission has recognised that because methane is a short-lived greenhouse gas it does not need to drop to zero by 2050 – which is great news.
- Their recommendations do not include change to the methane reduction targets set in the Zero Carbon Act.
- They have accepted the blanket planting of pine trees on farms is not a sustainable climate policy and could negatively affect rural communities.
- They have highlighted the need for long-term investment in R&D for agriculture to develop solutions such as inhibitors, vaccines, and research into selective breeding.
- They have specifically called on the Government to invest in rural broadband so that farmers have access to data and innovation.
- They have suggested a 15% reduction in the numbers of dairy cows, beef cows and sheep by 2030 while maintaining current production levels.
- It is also envisaged that there will be direct land use change from dairy farming to horticulture of around 2000 hectares per year from 2025 onward.
For more background you can also visit the Climate Change Commission website.
You can find DairyNZ's views on the Commission's advice here.
What you can expect from DairyNZ
- DairyNZ’s science, policy and economics team is collating a range of information to support a submission in response to the new targets.
The story so far
Over the last 30 years the Government has made decisions to ensure New Zealand reduces its greenhouse gas emissions in line with other developed countries. At the same time the dairy sector has acted ahead of regulation by investing in research and taking on-farm action. Here are some of the key dates:
1992 - New Zealand signed the UNFCCC
New Zealand signed the United Nations Framework Convention on Climate Change (UNFCCC) committing to undertake voluntary actions to reduce emissions to 1990 levels by the year 2000.
1997- New Zealand joined the Kyoto Protocol
New Zealand joined the Kyoto Protocol committing developed countries to individual legally binding targets to reduce greenhouse gas emissions.
2002 - New Zealand ratified the Kyoto Protocol
New Zealand ratified the Kyoto Protocol making it officially valid. This led to the New Zealand Government agree to a climate change policy package with the following elements:
- Created the New Zealand Emissions Trading Scheme to have a carbon tax on energy, industrial, and transport emissions
- Negotiated Greenhouse Agreements for “at risk” large emitters.
- Supported projects to reduce emissions, for example sustainable energy via wind
- Industry and government funding of research in the agriculture sector
2008 – The New Zealand Emissions Trading Scheme came into effect
The New Zealand Emissions Trading Scheme came into effect under the Climate Change Response (Emissions Trading) Amendment Act 2008.
It is the primary method for the Government to achieve its long-term commitment to reduce our greenhouse gas emissions.
For agriculture since 2011, companies carrying out certain agricultural activities have an obligation to report their emissions of methane and nitrous oxide.
2016 – New Zealand Government set an economy-wide target under the Paris Agreement
New Zealand Government set an economy-wide target under the Paris Agreement to reduce greenhouse gas emissions by 30 percent below 2005 levels by 2030.
Since the international effort under the Paris Agreement to limit the global average temperature increase to 1.5˚C above preindustrial levels, the Minister for Climate Change requested the independent Climate Change Commission to review.
If the Climate Change Commission finds that it is not compatible with contributing to the global temperature goal of 1.5˚C above pre-industrial levels it will make recommendations to make changes. The Climate Change Commission will provide advice in 2021.
2017 – Dairy Action for Climate Change launched
Dairy Action for Climate Change launched. A commitment to build a foundation which supports dairy farmers and the wider dairy sector to address on-farm methane and nitrous emissions over the longer term. It was developed in partnership between DairyNZ and Fonterra, with the support of the Ministry for Primary Industries and the Ministry for the Environment.
2018 – A ground-breaking methane research facility is established
A ground-breaking methane research facility is established at DairyNZ’s Lye Farm in Hamilton.
June 2019 – Government passes the Zero Carbon Act
This provides a framework for New Zealand to develop and implement climate change policies to:
- contribute to the global effort under the Paris Agreement to limit the global temperature increase to of 1.5˚C above pre-industrial levels
- allow New Zealand to prepare for, and adapt to, the effect of climate change.
The changes do four key things:
- set a new domestic greenhouse gas emissions reduction target for New Zealand to:
- reduce net emissions of all greenhouse gases (except biogenic methane) to zero by 2050
- reduce emissions of biogenic methane to 24–47 per cent below 2017 levels by 2050, including to 10 per cent below 2017 levels by 2030.
- establish a system of emissions budgets to act as stepping-stones towards the long-term target
- require the Government to develop and implement policies for climate change adaptation and mitigation
- establish a new, independent Climate Change Commission to provide expert advice and monitoring to help keep successive governments on track to meeting long-term goals.
April 2019 – Interim Climate Change Committee releases report
Interim Climate Change Committee releases report: action on agricultural emissions. It recommended:
- Livestock emissions are priced at processor level through the New Zealand Emissions Trading Scheme in the interim
- Nitrogen fertiliser is priced through the New Zealand Emissions Trading Scheme.
- The Government keeps its commitment to giving agriculture 95% free allocation (will only have to pay 5% cost) if priced
- Price livestock emissions at processor-level through the New Zealand Emission Trading Scheme in the interim as soon as possible.
- Funds should be recycled through an Agricultural emissions fund
- Recommended the Government prioritise work looking into counting carbon sequestration by trees and vegetation on-farm.
July–August 2019 - Government consults on Interim Climate Change Committee recommended options
Government consults on the options recommended by the Interim Climate Change Committee and an alternative interim proposal He Waka Eke Noa the primary sectors climate change commitment.
DairyNZ was one of organisations that came together to work on this alternative proposal.
The alternative proposal from the leaders of the agriculture sector set out a draft-five-year programme of action before 2025 to establish the foundation to support behaviour change necessary to reduce farm emissions.