Friday, November 24, 2017



Climate change: A good question

Writing in the Herald, Brian Fallow asks what makes farming so special in relation to climate change policy? It's a good question. Other industries pollute, and they don't get a free ride. Neither do industries which have no real way of reducing their emissions beyond cutting production. They do get a (gradually decreasing) free allocation of credits, but they also all face the cost of emissions at the margin, giving them an incentive to find efficiencies and look for ways to reduce their emissions (or at least not increase them). Farming, OTOH, gets excluded from the ETS altogether. And as Fallow points out, that's a direct subsidy to landowners:

In the end, New Zealand is internationally accountable for all of its emissions. If those who profit from half of those emissions entirely escape that cost, the rest of us bear it.

That is a subsidy and one that gets capitalised into land prices.

The beneficiaries are those who sell farmland and who get a larger tax-free capital gain.

The buyer just gets a correspondingly larger mortgage.


This is no different from the subsidies Muldoon paid farmers, and just as pointless and wasteful. The farming sector must be made to pay its way, like the rest of us, rather than expecting the rest of New Zealand to financially support their dirty, polluting industry.