
How green finance rules could harm NZ farming: Dr Jacqueline Rowarth
Not production. Not the number of people fed what they need. An area.
Further, to be considered green, a farm would have to be emitting less than one tonne of greenhouse gases (measured as carbon dioxide equivalents) per hectare.
Current estimates for dairy, responsible for over $26 billion in export revenue (45% of the total) from less than 7% of New Zealand's total area, are 3-19 tonnes/ha, with an average of around nine tonnes/ha.
For sheep and beef, the average is approximately 3.6 tonnes/ha.
To achieve the new 'green' threshold of below one tonne/ha would require a lot of new trees and not much animal production.
The Government's goal of doubling the value of the export economy would fail.
The economy would fail.
So would New Zealand's commitment to the Paris Agreement – that we would do everything we could to improve adaptability and resilience while reducing greenhouse gases in a manner that does not threaten food production (Article 2.1.b).
The Paris Agreement recognised that global population growth meant a rethink of food production.
What it didn't mandate was 'how'.
Nationally Determined Contributions (NDCs) were supposed to enable countries to choose their own reduction targets, recognising their different abilities to achieve them.
At the same time, the Paris Agreement included (Article 2.1.c) 'Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development'.
This is what the Centre for Sustainable Finance has tried to do, starting with agriculture and forestry.
The vision is admirable: 'An equitable, inclusive financial system that enables a resilient, sustainable Aotearoa New Zealand.'
The strategy of achieving it, however, is more well-meaning than practical.
Federated Farmers of New Zealand has warned that the taxonomy's 'green' finance rules are 'ideologically driven, unworkable, and risk doing real harm to rural communities'.
The problem is that various suggestions, such as low-emissions fertiliser, are either already in use (coated urea) or rather more talked about than in existence – green urea, made from green ammonia, is an example.
Investigations on green urea for Australia, led by the CSIRO, reported that it is very challenging for fertiliser production routes to use 'green' pathways to completely decarbonise agriculture and the food industry.
Listen to Jamie Mackay interview Dr Jacqueline Rowarth on The Country below:
The researchers concluded that achieving the goal would be difficult.
(The actual words were 'would require proper energy management systems to synchronise and optimise such a multi-player orientation for a common objective of maximising the penetration of renewable sources at competitive costs'.)
Without affordable new technologies, farmers can reduce greenhouse gases by reducing fertiliser and animal numbers.
Doing this on a farm that is already efficient also reduces food production, with implications for the economy and for employment.
It might also increase the greenhouse gases per unit of production.
This has been shown for organic versus conventional production.
In addition, the food produced from organic systems costs more than that from conventional systems.
Is the world, let alone New Zealand, ready for higher food prices?
The UK has decided that it is not and is halting plans for adopting a green taxonomy.
Immediately, comments were made about the Government stalling on sustainability reporting requirements for companies.
But the UK finance industry was already contending with other regulations, and the proposed taxonomy contained conditions that critics described as 'burdensome' and 'not useful in practice'.
Similar negative comments are likely to be made if the Centre for Sustainable Finance's taxonomy is not adopted by New Zealand.
But the reality is that banks are already making decisions on investments to assist farmers with implementing green technologies, and the decisions are made based on the individual farm and farmer.
The result is included in the calculations that the meat and dairy processors are doing to show farmers what they are achieving in terms of greenhouse gases per unit of production.
The data are used by the processors when negotiating with customers.
Rewards then pass to those farmers achieving top results, gauged as greenhouse gases per kilogram of product.
These products are in demand, as indicated by the prices being paid for meat and milk by overseas buyers.
The internal competition and fascination with new technologies ensure that farmers continue to make the improvements that are appropriate for their soil-plant-animal-ecosystems.
Food production is the goal, with minimum impact.
Models that processors are using are under constant adjustment to ensure that they are capturing advances.
It is difficult to imagine how a taxonomy, well-intentioned as it might be, could make a positive difference.
Independent groups do their job by stimulating thinking about different possibilities; sometimes, they confirm that what is already being done is the best for the current times.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Scoop
2 hours ago
- Scoop
Surcharge Ban Will Benefit Consumers, Retail NZ Says
Banning surcharges will improve the retail experience for customers but risks prices being increased to cover the costs of accepting credit card payments, Retail NZ says. 'Retail payments are a contentious and complex area for retail businesses. We are pleased the Government has listened to our calls for changes in the system, to enable retailers to provide better customer experiences,' Retail NZ Chief Executive Carolyn Young says. The changes will mean retailers cannot add surcharges to in-person domestic debit and credit cards. However, businesses will still be able to add surcharges to online sales, pre-paid and international credit cards. The changes are expected to come into force by May 2026 at the latest. Removing surcharges from in-store purchases is a positive move for domestic consumers, but the wider issue of pricing will need to be considered, Ms Young says. 'Retailers continue to face costs to accept debit and credit card payments and these costs will likely be added to product prices in future,' she says. The surcharge ban will likely see an accelerated decline in EFTPOS payments by consumers. EFTPOS payments do not incur any fees to retailers. As consumers change from using EFTPOS to contactless debit and credit cards, there will be a corresponding increase in the fees paid by retailers, so the benefits in the reduction of the interchange fee will be short-lived, especially for SMEs. A 2024 survey of Retail NZ members found that only 25.6% of respondents applied surcharges. Almost half of retailers calculated a rate that covered their costs, while 39% took advice from their terminal provider or relied on information from their bank statement. About 5% looked at what other retailers are charging. Members told us that the complexity of the Merchant Payment System prevented them from fully understanding the charges and fees they pay. These fees include interchange fees, scheme fees, switch fees, other external costs, internal costs and an acquirer margin. Considerable work will be needed to ensure that terminals have the ability to distinguish between domestic debit and credit cards, and commercial or international credit cards, and charge differential surcharge rates, Ms Young says. Retail NZ's position is that all cards should be treated equally. Retail NZ also wants certainty around the Commerce Commission's ability to monitor and enforce both the new interchange fees and the ban on surcharging. The Commerce Commission will need to ensure that the fees being charged to merchants reflect the new legislation, that the savings are passed on to retailers and that other fees are not increased. 'We will be seeking more detail on the surcharge changes, particularly around commercial credit cards which are not mentioned in today's announcement, and possible future changes to online transactions. We look forward to continuing to engage with the Government as it progresses these changes,' Ms Young says.


NZ Herald
2 hours ago
- NZ Herald
Nicola Willis criticised for cost of living ‘sermon' during post-Cabinet press conference
'Spending more, taxing and borrowing more as Labour and other parties advocate for, didn't work in the past and it won't work in the future,' Luxon said. Finance Minister Nicola Willis during the post-Cabinet Press conference at Parliament. Photo / Mark Mitchell 'The most important thing we can do to make you better off is to double down on our economic plan,' he said. Hipkins called Willis' and Luxon's address a 'sermon' that showed the pair was out of touch with the daily reality of New Zealanders. Although the party said they were going to get 'New Zealand back on track' as per their election campaign slogan, Hipkins claimed 'across the board, New Zealanders can see the country is going backwards.' 'Yet Christopher Luxon and Nicola Willis just say – 'oh, that's all part of the plan, we've got this' – they haven't got it. 'Things are getting worse for the vast majority of New Zealanders and no amount of spin from them is going to change the reality that things are getting worse for New Zealanders under their leadership. 'I think we should start calling them Fisher and Paykel because they've got more spin than a front load washing machine.' Tax relief was a major part of National's 2023 election campaign amid flaring inflation and a cost of living crisis. The party campaigned on a series of policies aimed at helping the 'squeezed middle', including adjusting tax rates, increasing tax credits and FamilyBoost. These policies came into effect in July last year. Willis said today the average household is $1,560 better off after the Government's tax relief package. 'We have also introduced FamilyBoost, which with the latest expansion gives families up to 40 per cent off their childcare costs. 'We have removed the Auckland fuel tax, introduced 12-month prescriptions, increased the rates rebate for 66,000 seniors and increased Working for Families payments.' Finance Minister Nicola Willis and Prime Minister Christopher Luxon arriving for the post-Cabinet Press conference. Photo / Mark Mitchell Luxon stressed that a year and half into the term, he and his party were still fixated on improving the economy and the cost of living. Things were still tough for many families but the economy was 'expected to grow on average 2.7% per year creating 240,000 jobs over the next four years. 'In the short term we are pulling every lever we can to help Kiwi families with the cost of living.' The Government also announced the scrapping of surcharges at the till, such as when a customer uses PayWave or their mobile phone to make a payment. 'New Zealanders are paying up to $150 million in surcharges every year. That's money that could be saved or spent elsewhere.' Luxon also said the changes the Government were making to construction would help reduce costs for businesses and New Zealanders. Earlier in the day, Workplace Relations and Safety Minister Brooke van Velden announced she would review safety rules for scaffolding, saying she had received many complaints from the construction industry that current regulations were too complex and expensive. Van Velden was light on the details of what specifically would be reviewed, but said officials would consult on proposed new rules that would give people a selection of safety options depending on how dangerous the job was. 'If it's not very risky, they will not need to use expensive scaffolding. 'For example, they will be considering whether a ladder could be used instead of scaffolding for a simple roof gutter repair or minor electrical maintenance when working at height.'

RNZ News
2 hours ago
- RNZ News
The Panel with Madison Burgess-Smith and Mike Williams Part 1
Tonight, on The Panel, Wallace Chapman is joined by panellists Madison Burgess-Smith and Mike Williams. Starting off, the Panel hears how homelessness and rough sleeping is on the rise across the country and then they discuss the government's move to ban on-card payments in-store, saving shoppers from being stung with surprise fees when paying with contactless technology. To embed this content on your own webpage, cut and paste the following: See terms of use.