Estimates Debate — Vote Climate Change and Energy Efficiency

I rise to take a brief call on this vote. I wish to deal with the issue of the moment that has preoccupied a number of members in this House, and I am sure that Mr Eckhoff will preoccupy us with it even further in his speech—that is, the agricultural emissions research levy. From the outset I want to say that as a member of Parliament who comes from a seat that is half rural and contains many highly skilled farmers, I have great respect for those farming communities even though I do not come from farming stock myself.

A few weeks ago the Associate Minister of Agriculture was in my electorate of Waimakariri, and contrary to a lot of the bluster and hot air coming out of the National Party with threats of “Will members of Parliament turn up to meetings?”, I know that members of Parliament from this side of the House will show up anywhere at any time to front up to their constituents. I attended a meeting with about 50 farmers in a place called Fernside in my electorate with the Associate Minister of Agriculture, Damien O’Connor. We had a free and frank exchange of views with farmers. We were with the farming communities for 2 hours, and they were not preoccupied with this issue. They wanted to talk about a broad range of issues of concern to them, and they said a large number of positive things about this Government and the direction of agriculture policy.

However, to get back to climate change, we addressed the issue of the agricultural emissions research levy. I want to put a couple of facts and figures to the House. This Government recognises the value of our farming communities and our agricultural sector, the value to our economy, and the backbone of our economy. That is why this Government exempted the agricultural industry from the carbon charge. Every other industry—manufacturers in my electorate—will have to pay a carbon tax. Patience and Nicholson, a tool manufacturer in my electorate, will have to pay a carbon tax. Shoe manufacturers will have to pay a carbon tax, and on it goes.

The Government took the step in recognising the importance of our farming communities by exempting them from that carbon tax. However, the Government said that the quid pro quo for that was that we would ask our farming communities to pay this levy of 9c a sheep, and I believe that it is around 54c per beef animal, and up to about 72c per dairy cow per year. That equates to around $300 per farm per year.

Every other industry in New Zealand is paying a carbon tax. I am prepared to front up to any of my farmers to listen to them, to talk to them, and to debate the issue because it is worth having that debate. The agricultural sector will pay about $300 per farm per year, even though livestock emissions equate to around 54 percent of total emissions in our economy. I would not have thought that that was such a bad deal. Nobody, whatever business he or she is in—and farmers are business people like everybody else—likes to pay additional charges or levies. However, one would have to argue that one of our biggest industries—that is, agriculture, the backbone of our economy—is at the greatest risk from the negative impacts of climate change.

Members should look at what happens in drought conditions in my patch in North Canterbury, and see the deterioration of the quality of livestock and pasture in a dry season. I would have thought that the industry, whilst not embracing this levy, would look upon it in a positive way. I am told by the scientific community that it is a proven fact that if we can decrease emissions from livestock, that can translate into efficiency and productivity with the animal, increasing body mass, and the quality of meat or dairy, or associated by-products. I would have thought that that would have been a good thing that our farming communities would embrace.

We have exempted our farming communities from the carbon tax until 2012. A lot of bluster and a lot of hot air have emanated from the National Party and ACT, which seized on anything negative to try to drum up some support in the farming communities. Members of National and ACT did not give a rat’s about the farming communities for over a decade. They sold out the farming communities completely. We now have a climate change issue that has created some controversy, I will admit. Any time we want to put a levy or a charge on any sector, nobody particularly likes it; I accept that. But as outlined in these estimates, the money that is raised will go into research to try to alleviate some of the problems created by 54 percent of emissions.

In doing that, I think it will translate—if the scientists are good enough, and I am sure they are—into some productivity. Some have tried to fan the flames, appearing on picket lines, and encouraging certain folk to send excrement through the mail—although judging by some of the speeches we have had today from some of the political parties, the excrement could go both ways; one could wrap up some of the speeches on this issue and mail them back, and they would be equal in quality to some of the excrement coming into Parliament. Rather than indulging in those naive, childish, and stupid tactics, I encourage all members of Parliament to go to the meetings, debate the issues, and actually deal with some of the facts.

I enjoyed the meeting in Waimakariri with our farmers. The great thing about rural communities is that when we talk about these issues the farmers give it to us between the eyes. They give it straight, and we can have a good-quality debate—unlike some of the stuff we hear around this place. These estimates are a chance to get out some facts about this issue.

Dr the Hon Lockwood Smith: Well, get some facts out.

I would like to challenge Dr Smith and others to stand up and make a comparison between the $300 a year he will be required to pay per farm—I do not know whether he has one, six, or 10 farms, he being one of the landed gentry over there. That charge should be compared with manufacturers, possibly, in his electorate and in others, who will be paying the full carbon tax. As I said before, 54 percent of our total emissions—and Dr Smith is knowledgeable in this area—is from livestock. We are asking for $300 a year, not to spend on ourselves but to go into research to try to find ways to cut down on those emissions in order to increase the quality of livestock and thus productivity.

I conclude by saying that everybody on this side of the Chamber—and, I am sure, on all sides of the Chamber—has respect for our farming communities, although the proof of the pudding is in the eating, of course. Right across the board in agriculture and trade we can stand on our record of support to our farming communities, right through regional development—

Dr the Hon Lockwood Smith: You sure can’t stand on your record of understanding science.

CLAYTON COSGROVE:—unlike Dr Smith when he was in Government with his crew. They sold out on our farming communities and regions. They raised the flag of surrender on our rural communities. Evidence of that can be seen in the result of the last election and in the rural booths in many electorates—electorates in which farmers voted with their feet for a sound Minister of Agriculture and a sound Government. I do not say that in an arrogant way—

Dr the Hon Lockwood Smith: Be responsible and face the facts.

The member should pipe down and breathe through his nose, as one of his former colleagues used to say. Farmers voted for this Government because they could see a set of agriculture policies and regional development policies that would reinforce and assist them. It is acknowledged throughout our agricultural communities that we have a superb Minister of Agriculture who is a true farmer—not a Queen Street or a Colombo Street farmer; a real one—and an Associate Minister of Agriculture who, up until recently, was also a farmer. They go around the country engaging with our farming communities and fronting up. They take a bit of borax, but that is part of the job.

I support these estimates. I think they are sound, and I hope as the debate goes on that we will have a chance to test some of the arguments in respect of the emissions levy without there being a lot of rhetoric and hot air. Let us have a debate on facts, as I have outlined—on scientific and statistical facts—not rhetoric.

I am sure the Minister in the chair, Mr Hodgson, will not be surprised when he knows that I wish to focus my comments on the climate change appropriation, which is about $27.5 million. Yesterday, the Minister of Agriculture, Jim Sutton, stood in this Chamber and said that climate change is the biggest issue facing this world of ours. Well, I suspect that back in 1970, after listening to advice from some of the science community, parliamentarians throughout the world stood in their various Parliaments and said that global cooling was the greatest environmental threat facing the world, and that there was a need for carbon dioxide. Here we are 30 years later saying that global warming is the problem, not global cooling.

New Zealand’s contribution to the problem comes from our livestock, which emit methane through belching. Of course, those in the science community will tell us that methane breaks down in a relatively short space of time into carbon dioxide, which is what the plants on our farms, and the trees, etc., throughout New Zealand ingest, and they emit oxygen. It is actually quite a simple and almost closed cycle. But in answer to a question of mine during question time today, the Minister in the chair said that only the livestock in this country are to be taxed, because it is human-induced waste, or methane, that is the real problem.

Yes, one could say that sheep, cattle, and goats on our farms do emit methane, but, according to this Minister, landfills, which we have from one end of this country to the other, are not human induced. Pardon? Landfills are a natural phenomenon? Surely a landfill is human induced; it is human produced; indeed, it is never reduced. A landfill is a direct result of human habitation. That is why the farmers of this country—almost to a man, or, indeed, to a woman—are united in their attitude that this tax is discriminatory. We are going to whack the farmers but leave urban New Zealand alone. Thirty-five percent of the land in this country is locked up in the conservation estate—land on which methane is being emitted from rotting vegetation on a regular basis.

If the Government were totally committed to this concept—if it does, in fact, see this problem as one of the greatest facing the world, then I would have thought that a total appropriation of $27.5 million was peanuts. When we break down this amount, we see that only $5.4 million is being spent on tangible outcomes, and the rest—about $22.1 million—is being spent on monitoring, advice, and departmental outputs. That is the true response this Government has to climate change.

However, as a practising farmer, I would still like to draw this issue to the Minister’s attention. We are told that this tax is not a tax, that it is a levy on ruminant research to reduce methane emissions. I respect this Minister. He is a man of science, a former vet, and he understands these things. I asked the Minister what is this commercial product called BioStart? What is a product called Biolab? There are other products called Ruminant Enzyme, ProDairy; Nutrimol, and there is even good old Apple Cider. All of those products are designed to help microbes in the rumen break down more rapidly the grass, clover, and other crops that animals ingest. The impact of that is to enable the lamb, sheep, cow, or goat to convert grass into protein much more quickly. Those animals are not sitting down chewing their cud like the front bench of this Labour Government does on a regular basis; they are converting that protein more rapidly into their wool, milk, or meat.

Those products have been on the market for many years. I personally have drenched hundreds of thousands of sheep over the years with a product called Apple Cider, and I have used Biolab and BioStart pretty regularly, as well. All of which, in a roundabout way—not directly, I admit—is reducing methane emissions from my livestock. Every other farmer who uses those products—and they are doing so in an increasing way—is reducing methane, because the metabolism of the animal is helped remarkably by those products, and the end result is less methane. So to turn to the farming community and say that there is no research in that area, and no products to reduce methane, is simply wrong.

I have also spoken to—and I invite the Minister to speak to—the mercantile and crop research companies that are found from one end of this country to the other. They tell me that they are spending in round figures, in an accumulative way, around $25 million on better grasses, better clovers, and, of course, better fodder crops, to enable a lamb, for example, to go, in round figures, from an average weight of about 13 kilograms when it was killed a decade ago to about 17 kilograms today. That is a direct result of the research that has gone on in this country, enabling the animal to convert grass to protein so much more rapidly. An indirect contribution, I would suspect, is to ensure that that conversion is made more rapidly, reducing the methane emissions that cows produce when they chew their cud. That is one of the things that the farming community is so upset about, because there is no other industry that thirsts more for knowledge or opportunity than the farming industry. One has only to look at places like Mystery Creek, where farmers in droves go looking for new technology. If there was one product, or one way, that would increase our production, and therefore our bottom lines, it would be grasped and welcomed by the entire farming community.

But that community knows that it is being put upon by this so-called research levy. It is unjustified, and it was not imposed as a result of consultation. Every farmer in this country would be outraged if the Government told him or her to turn up in the middle of winter at a quarter to 10 in the morning and it would consult them. If most farmers could possibly have done that, they would have attended, but they have a duty to feed their livestock at that time of the morning. To say that the Government consulted by making itself available at 10 o’clock in the morning at Invermay, or wherever, is insulting, to say the very least. All those things together make this industry of mine—the agricultural industry, the livestock farmers in this country—absolutely outraged that the Minister, or this Government, would say that we are not doing anything. We are pulling our weight.

The Minister in his wisdom decided to put a moratorium on aquaculture marine areas. He would wait and see what happened as a result of the outcome of the foreshore and seabed situation. After the Royal Commission on Genetic Modification put forward its view that we should proceed cautiously, the Government, rightly or wrongly, decided that it would wait and see what happened. It would put on a moratorium, and then wait for a period and see whether things worked out the way it wanted them to. So I put this question to the Government: why do we not do that with Kyoto? Why do we not wait and see? Increasing evidence is being put forward by internationally renowned scientists—and I have articles flooding in constantly on that very subject—that says no to the global warming concept.

The issue of climate change is one that has been driven by science more than any other international public policy issue in human history, and I shall tell members about that. The first decision of the United Nations in Rio de Janeiro in 1992 to proceed with the United Nations Framework Convention on Climate Change was informed by science that was released the previous year—1991. It was the result of 3,500 scientists around the world putting together their various learnings, and trying to sort out in their minds what might be going on with our climate. They said that they thought there was a problem. The following year, in Rio de Janeiro, at the largest gathering of world leaders in human history, the United Nations Framework Convention on Climate Change was born. [Interruption] I do not remember chipping the Hon Ken Shirley when his colleague was speaking. The member asked me to explain why we could not put Kyoto on hold, and I am doing that.

Five years later, in 1996, those 3,500 scientists reported that they were now a little more certain that the climate change effects were coming, and that they were going to be of a certain size and description. On that occasion, the people, including the Hon Simon Upton, were to meet in Japan the following year in a town called Kyoto, which gave us the Kyoto Protocol. Then in 2001 the scientists reported again. The 2001 report stated that they were more certain that there would be an effect, and that they could tell us a bit more about it than they used to be able to. They now knew that the world’s temperature had risen in the past 100 years, on average, by 0.6 degrees Celsius, and they predicted that the world’s temperature would rise in the next 100 years by 1.4 to 5.8 degrees Celsius.

Already, two important pieces of information had emerged. The first was that global warming was accelerating. The second was that the range by which it was accelerating was still quite large and still relatively uncertain. However, there was no suggestion of global cooling, no suggestion of plateauing, and no suggestion that there was no problem. The response to that was called the Marrakesh rules, and the following year the Marrakesh rules settled and determined the Kyoto Protocol. All of the rules are now in place, although the protocol might not come into force. Frankly, that depends on Russia. Russia will, I am sure, ratify, but it is not clear when it will.

The member also made some remarkably good points about the history of New Zealand’s increased farm production. He pointed out that lambs are now larger at slaughter, and he is right. He pointed out that the wool clip has gone up—or at least if he did not, he might have. It has not gone up a lot, but it has gone up a little. He might have pointed out that lambing percentages are up hugely over the past 20 years. He might have pointed out that the carrying capacity of our pastures has improved. Roughly speaking, over the last 20 years our lamb production has more or less doubled—that is, the number of animals has halved but production has stayed the same, if one wants to look at it that way. There have been a remarkable set of increases, and there is no indication that they will not continue into the future. Moreover, they are driven by research.

The member pointed out a number of products that he is using on the farm. He talked about the product he got from a mercantile outfit and the one he got from a vet club, or wherever it was. The point about those products is that they are gaining popularity. They probably do reduce methane emissions and increase productivity, but we do not understand why. This economy is based on—at least awkwardly—ruminant physiology, which is a difficult thing to explain to people. If we do not understand ruminant physiology very well now—and we do not—we ought to improve that understanding. We need to understand why some grasses produce less methane. Why has AgResearch carried out research with grasses that produce a 16 percent reduction in methane, lower levels of parasite burden, higher food conversion efficiency, and, they think, general improvement in animal health? Why is it that deer, as opposed to sheep or cattle, produce proportionately less methane? What is different? We think they do, but we are not sure. Why are there differences between animals? So the Government has said it wants to discover why.

But before it said it wanted to discover why, it took another decision. It looked at our agricultural emissions. It found that they were 54 percent of our total emissions—more than half of all our emissions coming from sheep and cattle—and said to farmers: “There will be no emissions tax. We will completely cover it, using taxpayer funds.” And we will; in return for which farmers will pay for a research levy. Then we decided that we had better work out the size of that levy; and the way to do that was to work out how much science we wanted and in what areas. We got together with the farming fraternity. We got together with the leaders of the agricultural community. We got together with Federated Farmers—for goodness’ sake! We got the best scientists from around the world, and we had a 2-day workshop. We preceded that with a search of the world literature, and on it went. We costed what were likely to be cost-effective avenues of inquiry. The cost is $8.4 million, and the reason that farmers are paying for it is that it will go to their bottom line. I repeat, it will go to their bottom line. The other reason they are paying for it is that it is a fair-suck-of-the-sav argument, because had an emissions tax been put on all agricultural emissions, it would not be $8.4 million but about $1 billion.

💬 Gerrard Eckhoff: That would ruin this country.

Would the member please sort out some of the facts? He has a lot of interest in the issue; I admire him for his interest, but he has got a lot wrong. Let us deal with the issue of methane emissions from other sources. He raises questions about methane from waste. He is right: methane from a landfill is human induced, and that issue is covered by the Kyoto Protocol. To give an idea of the size, agriculture emissions are 54 percent, emissions from landfill waste are 4 percent. As opposed to methane emissions—which are rising—methane emissions from our waste are falling rapidly. The reason is that this Government has a very good Minister for the Environment, and she has developed a thing called a waste strategy. She has worked hard, quietly, and well with the local governments of this country, and improvements in the way we manage our waste stream are causing that reduction. What is more, these days a number of people who own landfills are taking the methane off them and burning it for electricity. Therefore it is not emitted into the atmosphere.

On the other hand, because he has an allergy to the Department of Conservation, the member decides that it should be vulnerable too, because it has trees. Not all of those trees are alive—some of them are dead, some of them are rotting, and some of them produce methane. That is not human induced; that is part of the natural methane cycle, and I invite the member to draw a distinction between the two. So those, I hope, are some of the points that he has raised that are now satisfactorily answered.

The member says we did not consult. Was he not around during 2002? We held 49 consultation meetings, 11 of which were farmer-owner meetings. He did not show up; he was not aware that they were going on, yet he comes back to the House a year later and asks why did we not consult. We consulted on a preferred policy outline, which said that this is what we wanted to do, and we took it around the country, endlessly. We made a few tweaks, and in October 2002 we announced our final policy. One of its final ingredients is that no farmer in this country will be charged for agricultural emissions by way of an emissions tax. There will be none. The 54 percent of emissions will be covered, in their totality, right through the first commitment period. It was a core part of our policy, in return for which research will be done to see if we can reduce those emissions. The benefits of that research flow to both the Government and the farmer. The Government is putting up $4.8 million and the farmers $8.4 million—not a bad price compared with $1 billion! That seems to me where the matter rests, and where the Straight Furrow editor of today thinks the matter should rest, too.