Two reports highlight the impact of cows, but English says we won't be shrinking milking herds in a hurry

Bill English says he won't "slash agriculture and destroy communities" in response to reports calling out the environmental costs of dairy. Photo: Lynn Grieveson

Two environmental reports have landed in one day, both highlighting the impact of cows, but Prime Minister Bill English says we won't be shrinking milking herds in a hurry, reports Eloise Gibson.

In its first comprehensive environmental review in a decade, the OECD has called for agriculture to be brought into the Emissions Trading Scheme and says the Government needs a plan for meeting its greenhouse gas targets, while still earning more from exports. The same day, London-based consultancy Vivid Economics has published a plan commissioned by a cross-party group of MPs outlining how New Zealand can do its part to keep global warming under a 2°C increase. Even with ambitious improvements in renewable electricity and other sectors, Vivid concludes New Zealand will need to cut livestock numbers and plant more trees to be carbon neutral by the end of the century and meet the goals of the Paris climate accord.

Even assuming impressive leaps in science and technology, like the fruition of Kiwi scientists’ efforts to design a vaccine making cows burp less greenhouse gas, cow herds would need to shrink to meet the target.

Both reports raise questions about how the Government’s goal of increasing exports can be reached without huge environmental costs, unless we also change how, and what, we farm to focus on cleaner and higher-value products.

“New Zealand’s growth model, largely based on exporting primary products, has started to show its environmental limits, with increased greenhouse gas emissions, diffuse freshwater pollution and threats to biodiversity. A long-term vision for the transition towards a low-carbon, greener economy is necessary,” says the OECD report. “There are likely trade-offs between continued reliance on exporting primary products and environmental and climate change mitigation goals. New Zealand should build on its well-developed knowledge and innovation system for exporting higher value export products and decouple growth from natural resource use,” it adds.

But Bill English has ruled out major changes in the size of the dairy herd. He told reporters before National’s caucus meeting this morning that the Government would not set out to reduce the number of cows by a third to meet its international climate commitments. Seriously shrinking the number of cows and sheep was one option put forward by Vivid Economics to allow New Zealand to be carbon neutral this century, along with leaps in new technology, more plantation forests and a move towards high-value crop exports. All of the paths to zero climate impact involved moving towards 100 percent renewable electricity, with more electric vehicles.

English said farmers were increasingly aware of their environmental impact and a number of regional councils were capping nutrient loads. "We’ve got in place an emissions trading system, we’ve got the forestry sink component. We know there’s work to do there. But we are not setting out to slash agriculture and destroy those communities. It would be bad for our economy."

Asked about criticisms that New Zealand did not have a plan to diversify away from commodity-based exports from cows, English said: "The economy is diversifying, quite significantly, and I think we learnt that, when the dairy prices were down, the New Zealand economy is not totally dependent on it at all."

Although English ruled out a concerted push to shrink herds, the government’s own water rules may result in shrinking dairy cow numbers. Freshwater clean-up rules are being slowly implemented around the country in response to the Government’s national policy statement. In the Waikato region, draft nitrogen limits might require some farms to slim their stocking rates to meet pollution targets.

Around Lake Taupo – a clean-up projected lauded by the OECD – nitrogen shrinking was partly achieved by a multi-million dollar government investment in buying land from farmers and converting it to forestry. Other farmers in the catchment, nudged by new nitrogen caps, converted land to growing premium beef, milking sheep, olives and other crops, resulting in less dairying. The OECD noted in its report that the Taupo project cost the Government a fortune ($81 million over the first 15 years, split between central government and regional and district councils) and encouraged New Zealand to roll out cheaper versions of the system in other catchments.

Cows feature heavily in two of the most critical parts of the OECD report – greenhouse gas emissions and waterways.

On water quality, the report notes some good progress by the government in bringing in a national policy on freshwater, and efforts by farmers and rule-makers to fence waterways and clean up Lake Taupo.

But it says regional councils are implementing the national water policy slowly and patchily, saying they need more help from the government if they are going to clean up freshwater, faster. Depressingly, the report points out there might a significant lag in the water-dirtying system, meaning pollution that has already left farms during the dairy boom is yet to reach waterways – and even with the best clean-up effort, water quality may get worse for a while. Urban storm-water is a problem too, with the review labelling city runoff to waterways as a growing public health concern

Cows and other farm animals also crop up as a major obstacle to meeting greenhouse gas targets. Leaving farming out of the Emissions Trading Scheme is listed as one of the main reasons why the ETS hasn’t been effective, along with a flood of cheap international credits and other measures that have kept the price of carbon too low to spur people to action. The review recommends several ways to sharpen the ETS’ teeth, including bringing in animal burps, livestock manure and emissions from nitrogen fertiliser sooner rather than later.

“Given the significance of agricultural biological emissions, continuing to shield them from mitigation obligations would make meeting these objectives harder, place a disproportionate burden on other sectors and slow the pace of adjustment in the agriculture sector,” the report says.

The second report, by London-based climate and economic consultants Vivid Economics, lays out some options for New Zealand to reach carbon neutrality in the second half of the century, all of them requiring varying shifts away from farming cows and towards different land uses such as forestry and cropping.

The report, commissioned by a cross-party group of MPs called GLOBE-NZ, suggests various scenarios that would enable New Zealand to become carbon neutral before 2100 and do its part to meet the Paris climate goal of keeping warming to a rise of 2°C, or, ideally, lower. It concludes we can be carbon neutral this century, but not without major changes to land use.

First the authors look at a technologically optimistic scenario, where efforts to design fixes for farm and household greenhouse gases come to fruition by 2050. Such fixes include New Zealand’s bid to design a vaccine to cut methane belching by sheep and cows, selective breeding of more climate-friendly animals and precision agriculture to curb nitrogen waste. Electric heating and use of electric vehicles for freight would also need to make a major leap. We would still need to have less livestock, including cows - about 20 to 35 percent fewer animals than today – and more forestry, but there would be room for a diverse range of land uses, including horticulture and a substantial dairy industry.

If, on the other hand, the hoped-for techno-fixes do not pan out so impressively, New Zealand would need to plant 1.6 million hectares of plantation forests to reach carbon neutrality. In this forest-heavy scenario we would need to cut the dairy herd, though not as drastically, and sheep and beef cow numbers would also need to shrink. And we would still need technological breakthroughs, for example in farming and freight transport, albeit not as radical as in the first scenario. In a third scenario, we keep all our cows, expand forestry only a little bit and ramp up reliance on electric vehicles, renewable energy and other climate-friendly strategies. But this would see us achieve carbon neutrality well after 2100.

The authors stress the report is designed to explore ideas and options – not dictate what New Zealand should do. Vivid Economics' John Ward told Newsroom the idea was to come up with stark options, and that in reality policy makers might mix and match different aspects to reach climate goals.

"They are certainly not the only alternatives you could come up with, but they represent two stark alternatives. One says, let's take an optimistic view of what we expect might emerge technologically between now and 2050. We took what we thought were an aggressive set of assumptions about technology development and that significantly reduces the emissions intensity of the agricultural sector and of the energy sector was well. You can then have a rural economy that supports a wide range of land uses, horticulture, crops, forestry and large levels of pastoral agriculture as well."

"That's one end of the spectrum, then we said we really can't be confident that all these technologies are going to come into play. The methane vaccine has been talked about for a long time but it hasn't yet materialised, we've had people talking about fairly wacky ideas for electric heat for a long time but they haven't yet materialised. If we don't have (those options) you have to quite significantly afforest. The only way you can keep yourself on the trajectory is significant [tree planting]," said Ward.

The report authors acknowledge there may be no point moving away from intensive dairying and meat production for climate reasons if people around the world do not change their diets towards less climate-intensive foods, because any drop-off in New Zealand’s production might be filled with products from more-polluting countries. But Ward said their scenarios were "based on the presumption that it is not only New Zealand taking steps to implement the Paris agreement but all countries, and in that case you quickly come to the view that we are going to see some substantial changes in dietary patterns over the next 30 or 40 years which will lead away from meat-based protein towards plant based proteins. Viewed in this light, rather than New Zealand shooting itself in the foot by losing its exports, it is actually building resilience to a world where meat-based proteins fall significantly."

Ward said Vivid didn't model effects on export income of the different scenarios, but they did restrict the options to economically valuable uses of land. "When you begin to factor in the cost of emissions and the cost of pollution you can quickly get to some quite different values for the different uses," he said.

And, despite our OECD-topping share of tricky-to-cut livestock gas emissions, he said New Zealand is lucky. "For lots of countries there are significant issues about how to move reliance away from coal-fired energy and what to do with the people who've been mining that coal for all these years. Those are significant challenges and New Zealand is in an incredibly fortunate position in many ways. On the other hand, your biological emissions from agriculture are much higher, but our analysis shows there are things you can do about that."