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Pressure is building on the government of New Zealand to alter a
long-standing ban on genetically modified crops if Prime Minister
Jacinta Ardern wants to conquer emissions from the key agriculture
sector effectively in a highly anticipated emissions reduction
plan.
Due by the end of May, the emissions reduction plan will lay out
a sector-by-sector transformation of life in New Zealand, according
to the government, which issued a draft consultation in October
2021 as it seeks to cut GHG emissions by 50% by 2030 and reach
net-zero by 2050. The latter promise is enshrined in law through
the Zero Carbon Amendment Act of
2019.
Agriculture contributed half of New Zealand's total emissions in
2020, according to the government's latest GHG inventory, which was
released in April.
New Zealand is the only Organisation for Economic Co-operation
and Development member in which agricultural emissions account for
50% or more of its overall total. Methane belched by ruminant
animals contributes 71% of the country's agricultural emissions,
according to the New Zealand Agricultural Greenhouse Gas Research
Centre, a government agency.
New Zealand's gross GHG emissions in 2020 totaled 78.8 million
metric tons (mt) of CO2-equivalent. New Zealand's emissions (minus
carbon sinks) in 2020 were 55.5 million mt CO2-equivalent. Gross
emissions in 2020 comprised 44% CO2, 44% methane, 11% nitrous
oxide, and 2% fluorinated gases.
The agriculture and energy sectors were the two largest
contributors to New Zealand's gross emissions in 2020, at 50% and
40%, respectively. Energy encompasses transportation, electricity
generation, and "other energy" (see graphic below).
Source: New Zealand Ministry of the Environment
Methane and nitrous oxide emissions could be reduced by altering
the food eaten by ruminants such as cattle and sheep. Milk powder,
butter, and cheese is New Zealand's largest export group while meat
and edible offal is the second largest.
Changing feedstocks enough to significantly lower emissions
would require genetic modification, observers say. Currently, no
genetically modified products manufactured in New Zealand are
commercially available. All use of genetically modified techniques
must have approval under the Hazardous Substances and New Organisms
Act, so genetically modified crops have been de-facto banned in New
Zealand since 2001.
Challenges
The de-facto ban was challenged by the NZ
Productivity Commission, an independent Crown entity that provides
advice to the government. The New Zealand Climate Change Commission
(CCC) made a similar recommendation
in May 2021.
CCC Chief Executive Jo Hendy re-iterated the recommendation in
April when laying out a 10-point plan from the
government-funded advisor on what it expected from the Ardern
administration in the emissions reduction plan.
Eric Crampton, chief economist at pro-free market think tank NZ
Initiative, concurs with that recommendation, noting that
development of potential emissions reduction options for the
country's biggest GHG producer are being hamstrung. Even field
trials are "effectively impossible," he told Net-Zero Business
Daily by S&P Global Commodity Insights on 2 May.
For instance, trials of modified ryegrasses that could reduce
ruminant methane emissions by 23% were carried out by
government-backed AgResearch. But the trials took place in the US.
The ryegrasses also grow as much as 50% faster than conventional
ryegrass. However, use of the variant, once testing is completed,
is currently forbidden without regulatory change. AgResearch also
worked on breeding
low-methane-emitting sheep, work that took more than a decade.
Federated Farmers, a major farming advocacy group, said in a
response to the consultation it wants an "appropriate regulatory
framework to enable New Zealand farmers to safely use emissions
mitigation tools, such as feed inhibitors and genetically modified
ryegrass." It added that the government "must begin to enable and
not hinder, innovation in the use of mitigation tools."
After the Productivity Commission report was released, Federated
Farmers doubled down on its commitment to change. On 12 April, the
trade group's president, Andrew Hoggard, said in a statement that
New Zealand's "farmers are intensely interested in further reducing
their world-leading GHG emissions footprint per kilogram of food
produced, but the federation has been saying for several years now
that we need new tools to do so. Genetic modification is one of
those new technologies that offers exciting potential."
In a country determined to reduce its emissions footprint while
maintaining a healthy farming sector, innovation is most certainly
needed, said Crampton. "Agriculture will wind up facing a carbon
price. Maintaining a de facto ban on the tech that helps adapt to
rising carbon prices, and to changing climate, seems remarkably
stupid," he said.
What's needed, according to the Sustainable Business Council,
part of Business NZ, is an accelerated pathway for the development
and adoption of biogenetic methane emissions reduction
technologies. This should involve scaling up public and private
funding, the business lobby group told the government in responding
to the consultation at the end of 2021.
That's a position New Zealand's largest company, Fonterra
Co-operative Group, can understand. Fonterra, responsible for 30%
of the world's dairy exports, reckons finding a solution to the
methane challenge would be a "game changer," CEO Miles Hurrell said
in a statement accompanying the company's half-year earnings on 17
March. Fonterra is working on a probiotic to cut calves' emissions
by 20%.
To cut emissions sufficiently from the agricultural sector,
government's plan will have to implement a variety of strategies,
according to Bill Kaye-Blake, New Zealand Institute for Economic
Research (NZIER) chief economist.
"We need to produce more value per tonne of carbon emissions [in
the agriculture sector], and that can come through greater value or
lower emissions. At the moment, there's too much uncertainty about
whether current policy and technology will work. He Waka Eke Noa
might work, but it might not. Methane-reducing technology might
work. Other technologies might work. Let's see a solid Plan B as
well." Kaye-Blake said 2 May when Net-Zero Business Daily
asked about his wishlist for the emissions reduction plan.
He Waka Eke Noa (HWEN), or the
Primary Sector Climate Action Partnership, is a joint initiative
between government, the primary sector, and iwi/Māori launched to
measure, manage, and reduce on-farm agricultural GHG emissions and
adapt to climate change. HWEN is working on a way to price on-farm
emissions, outside of the existing New Zealand emissions trading scheme, and
will present a final option that the government will make a
decision on by December.
Adaptation
Adapting to climate change is another challenge the government
must tackle. Drought cost New Zealand at least NZ$720 million
(US$463 million) in economic losses over the past decade, according
to the Ministry of the Environment, and the wildfire season is
expected to lengthen by 70% over the next 20 years.
On 27 April, the ministry released its draft climate
adaptation plan for public engagement and
submissions. The plan is due to be finalized by the end of
2022.
April's adaptation plan and May's emissions reduction plan are
part of efforts that will transform New Zealand, Ardern said in a
speech 27 April. "Urgent, transformative global action is the only
credible response to climate change. We have to halve emissions by
the end of this decade," she told the FP Virtual Climate
Summit.
When it comes to halving global emissions, "if we are
successful, 2030 will not look anything like 2022. If we're on
track, change will be evident," Ardern said, adding that it is not
good enough for policymakers to just be ambitious for the future,
"we need to be acting and implementing detailed plans now."
It won't be cheap though. "One of the keys is capital
investment," said Kaye-Blake. "We have to invest money now to
upgrade infrastructure, plant and equipment, and processes. By
doing that, the economy can lift labor productivity and multifactor
productivity at the same time as reducing greenhouse gas emissions.
You can call it 'spending' or 'investment', but either way current
GDP needs to be put towards better assets for future
production."
New technologies
Much of that spending will come on new technologies. Ardern's
first official trip since the COVID-19 pandemic began was used to
tie up deals with Asian partners on such technologies and fight the
other major crisis of our times—climate change.
Ardern on 21 April teamed up with Japanese
companies to launch hydrogen projects, including a hydrogen-powered
car-sharing scheme in Auckland, New Zealand's most populous city;
plus a hydrogen truck refueling system; and a green hydrogen power
plant. A day earlier, Ardern inked a deal with Singapore to
jointly develop a sustainable aviation fuel program. The two
countries had already signed a signed a similar hydrogen
cooperation agreement.
It is expected biofuels will also play a role in the emissions
reduction plan for the transportation sector. In December 2021, the
government introduced a sustainable
biofuels mandate to help reduce GHG emissions in the transport
sector. From 1 April 2023, fuel wholesalers will be required to cut
the total GHG emissions for transport fuels they sell by a set
percentage each year, by deploying biofuels as a part of their fuel
supply.
In these initiatives and more that are on the way for
electrification and biomass, co-ordination is a must, said
Kaye-Blake. "The current way we power our economy has taken decades
to coordinate. We can drive the length of the country and not run
out of fuel because people have installed petrol stations
everywhere over the past century," he said, adding that such a
network must be replicated for EVs, biofuels, and for biomass
boilers, "but in much less time."
Kaye-Blake also said the think tank wants to see Ardern and the
emissions reduction plan improve productivity. "What we are talking
about is becoming more efficient, which is essentially the same
thing as raising productivity. We need to use less physical
resources because they take energy to extract and turn into useful
things," he said, adding: "We also need to use less energy (and use
energy from renewable sources). If the plan doesn't tell us how we
are going to improve our ability to get useful things out of less
resources, it's a failure."