Cabinet overruled Climate Change Minister James Shaw on agriculture emissions pricing plan
The Governments new farmgate emissions pricing scheme , He Waka Eke Noa, was the subject of disagreement around the Cabinet table, with Climate Change Minister James Shaws favoured proposal for a cap and trade scheme for methane rejected by Labour ministers. Instead, Cabinet agreed only to consult on a split gas farm-level pricing system. Under the new farmgate emissions pricing proposal , first reported on by Stuff on Tuesday, farmers will start to pay a price for their methane emissions in 2025. Consultation will run until near the end of the year with Cabinet expected to make final decisions in early 2023. But a Cabinet minute released with the He Waka Eke Noa consultation documents, shows Shaw wanted a different scheme to the one that Cabinet ultimately approved. READ MORE: * Climate change: The two-decade road to a farmgate emissions charge * NZ farmers set to pay for emissions by 2025 in world-first climate plan * Is farm-level payment scheme the solution for emissions pricing? Under the Greens cooperation agreement with Labour, Shaw is a minister outside of Cabinet, but comes to the Cabinet table when discussing issues germane to his portfolio. The minute noted the Minister of Climate Change's concerns regarding uncapped emissions, a low marginal price, and the risk of emissions reduction targets being traded off against other considerations when prices are set. Shaw was much keener on having a cap and trade scheme similar to the emissions trading scheme running in the agricultural sector because it would put a cap on allowable emissions and let the market set the price. The Government ended up settling on a levy effective a methane tax on the sector where Cabinet would set the price in order to achieve the Governments goals, but no overall cap of agricultural emissions. The Climate Change Commission will give the primary advice, which farmers and other environmental groups can feed into. What has been presented to us and what we're putting back out today is essentially the proposal from our primary producers, the farmers themselves, Prime Minister Jacidna Ardern said in the Wairarapa on Tuesday morning when launching the plan. It's key to us that what we do is workable, that it's pragmatic, that it can be introduced in a timely way, and that it will actually bring down our emissions. Unfortunately, some of the other options didn't present that opportunity, she said. Modelling by the Ministry for Primary industries suggested that the Government's scheme would reduce methane emissions by 10% by 2030. The Cabinet minute also noted Minister for Agriculture Damien OConnors view that a simple farm-level pricing system should achieve the governments goals of an effective, practical and equitable system to reduce New Zealands agricultural greenhouse gas emissions, subject to regular price adjustments. Shaw, fresh from losing and then regaining the Green leadership after some party members were unhappy about a perceived lack of progress, said that the route decided on by Cabinet where Government ministers will set the farmgate emissions price, was likely to make lobbying of ministers more likely. One of the risks I think of having ministers directly setting price is the potential for lobbying, Shaw said. He said he thought that a cap and trade pricing system would be more responsive to market movements and leave the sector more in control. As co-leader of the Green Party, Shaw said he was pleased there was some action, but that the party would have wanted more. We would have wanted a more robust system, and we will continue to take that stand, Shaw said on Tuesday morning.