The new Government has indicated it wants farming to contribute to greenhouse gas emission costs, possibly incurring 5% of those costs initially.
The farmer co-operative has submitted to the Productivity Commission’s inquiry into the impact of a low emissions economy on economic well-being and production.
As the Government started to reveal climate change policy including a Zero Carbon Act and a Climate Commission, Fonterra highlighted NZ’s relative carbon efficiency for dairy production.
It noted there was no global benefit in shifting milk production out of NZ, given Fonterra’s suppliers’ ability to produce milk at half the emissions rate of the world average and a quarter of the world’s most inefficient producers.
“The significant opportunity is to help less efficient countries become more efficient,” it said.
It wanted more clarity on climate change policy and supported a Climate Act recommendation made by the last Parliamentary Commissioner for the Environment Dr Jan Wright.
It supported the ETS for fossil fuel emissions but said the scheme was insufficient to address market failures and incentivise onfarm mitigation action.
To do so would require a carbon price so high it would have significant and disruptive costs to all New Zealanders.
Until alignment with competitors was achieved and significant mitigation was available it supported agriculture’s exclusion from the ETS, instead reducing emissions through the Dairy Climate Change Action Plan launched in June.
