What are the variables in New Zealand's climate change policy? There's a candid assessment from the Minister in the Local Government and Environment Committee's annual review of the Estimates for Vote: Climate Change [PDF]:
The volume of rainfall in catchment areas from now until 2012 will be an important factor in determining our future liability. The Minister was reluctant to indicate when our emissions are likely to plateau, as this will largely depend on future agricultural outputs.
(Emphasis added).
This is a point I've been making for some time. While we could conceivably meet our rather lax short-term goals (or we could have, if we'd acted earlier rather than sitting on our hands for a decade), we are simply not going to be able to make larger cuts in the long term as long as agricultural emissions are allowed to grow. And while there's some good news on that front around nitrification inhibitors, the core problem of enteric methane emissions still has not been dealt with. Unless it is, there's no hope of reaching a goal of a 50% reduction in emissions by 2050, let alone carbon neutrality.
What can we do about this? In the short-term, we need to throw more money at research. The amount involved is relatively small - an extra $3 million a year would give those working on methane everything on their wish-list. Unfortunately, those responsible for the problem - farmers - are unwilling to pay to clean up their mess, and last time the government suggested it, they drove a tractor up Parliament steps. So much for rural "self-reliance".
In the long-term, I think it is vital to internalise the externality and ensure that farmers pay for the costs they impose on society. A simple per-head tax on agricultural animals based on their average emissions is the easiest solution. That will at least ensure that the cost of emissions is factored into their decision making, and it will ensure that the cost will lie where it belongs: with the polluters, rather than those they free-ride off.
