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Good Cows, Bad Cows

Our environmental policy is a rebellion. It tells polluters that the free ride to despoil the environment is over. You want to keep polluting beyond industry best practice? Then expect it to cost you. However if you produce tangible evidence of significant reduction in pollution and you could financially gain. This will all come about as we simply put a price on the head of pollution – the rest will be solved by market forces.

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The response by Federated Farmers was predictable; calling our approach backward and not recognising all the work farmers are doing. Quite the contrary is true. We recognise the good work that some farmers have done, they are environmental leaders and would be rewarded under our policy. We want to encourage all farmers up to this standard. The Feds of course like to paint all farmers as leaders simply because they comply with the law. Take a look at our rivers and lakes boys, the current law isn’t good enough. 

The lame excuse for polluting farmers by Fed President William Rolleston on Newshub’s coverage of TOP Policy #3: Polluters Pay really displayed the regressive conservatism that handicaps industry lobbyists. William argued that because farmers put food on our tables, that’s social contribution enough. Two flaws in his logic – other industries produce goods and services of social benefit and don’t pollute; and to even suggest that despoiling the public property of our environment is in anyway okay, just reveals an arrogance of the public interest. The man doesn’t accept that the public should be able to tell his industry to stop it. Make your own judgement of that belligerence.

Anyway let’s come to an economic rationalist’s approach to the environment. Because that is what The Opportunities Party’s environmental policy actually is – what the National and Labour Parties dream of but never pursue lest it cost some votes - yet economic prosperity and environmental sustainability can be strongly compatible.

What does The Opportunities Party articulate, that the Establishment parties find so difficult?

  1. Our philosophy is that each generation should leave the environment in no worse shape and preferably better shape than it was inherited. That is simply a value with which we think New Zealanders would concur. From that all the rest is just logic.
  2. Our environment has rights. We intend to enshrine the rights of our ecosystems to survive and thrive in our Constitution – just as Bolivia and Ecuador has.
  3. The tools we will use include traded “polluter permits” (with fewer issued over time) and corrective taxes (where the revenue collected is passed on to those protecting the environment).

That’s it, pretty simple really and we would expect to apply this to all industries – not just factories, fishing and farming. The goal of course is to harmonise economic growth (better described as income growth) with environmental sustainability. Our take is that this is what New Zealander’s want and we can do it, once we just ask for the mandate and you give it. Our natural capital is our second most important asset (after human capital). Let’s recognise that and keep building it so we can make some money off it.

So why don’t we do it? The scaremongers – including the Feds and incredibly even the Green Party themselves – say that this could result in economic devastation. We simply don’t buy that either/or argument that is the raison d'être for both those organisations; there is plenty of overseas evidence that shows when you slowly raise environmental standards over time you can encourage lagging businesses to catch up to those operating at best practice. We should expect nothing less than the best from our businesses, farmers included.

Here’s an example of how a corrective tax (known by the more politically correct term of “levy”) could work say for dairy farms in a sub-catchment. The idea is to reward environmental improvement and penalise those who degrade our natural capital. The measure is totally revenue-neutral so that any levy paid by the worst performing farms is received by the best performing ones. It’s about profiteering from good environmental practices, the idea being that over time fewer and fewer farmers can be viable without taking the environmental impact of their practices, seriously.

Let’s assume that the benchmark for acceptable nitrogen leaching in a sub-catchment set by the Environmental Authority is 30 kg per ha. And further, let’s say the incentive/disincentive price for leaching is $20 per kg. Then how a corrective tax would work is that it would punish farms that leach above 30 kg/ha and reward farms that leach below that rate. Say Farm A leaches at 45 kg/ha while Farm B leaches at 15 kg/ha. Then in any year Farm A would be paying a penalty of $300 per ha, while Farm B would be receiving a cheque for $300 per ha. Say both farms are 150 ha, then that’s in effect a transfer from one farm to the other of $45,000 per annum. 

Over time the benchmark would continue to be lowered as our environmental protection standards get stronger. And in any sub-catchment we’d ensure that the pollution charges collected are all returned to the better-than-benchmark farmers or environmental improvements in that same sub-catchment.

Include good environmental outcomes as a requirement for business and expect the market to do the rest. Not that hard really and certainly not the view of someone who is anti-farming, sorry Federated Farmers. We suggest you start representing better farmers yourselves.

Showing 12 reactions

  • Barry Funnell
    commented 2017-01-24 12:01:33 +1300
    This is very important NZ issue to solve, it is commendably the party is doing something positive. But solving pollution problems with tax historically hasn’t worked.Example tax on landfills waste to improved recycling and reduce waste tonnage. Hasn’t decreased our waste going into landfills, but has increased bureaucracy and wasted millions of dollars. NZ farming animal air pollution is minor (a fraction of insects), compared to world air pollution.World pollution, animals 11%, sea 49%, humans 9% etc.Cleaning up NZ animal air pollution will set an example by offsetting it planting trees/manuka, not carbon credits. The world need trees to absorb air pollution that is still smaller than worlds volcanic activity. Rainforests not pine trees, although use pine first crop as cover. Starting with public lands like wellington town belt. All water discharge from the boundary meets a minimum discharge standard. Meaning if you pollute your property you clean it up. For centuries land has been polluted. Nature cleaned these polluted waters with wetlands. NZ raupo and bull rushes have proved very effective in water purification in NZ. Artificial wetlands has also proved very effective in the states of Washington & Oregon in USA. Just copy success, not tax it for the benefit of bureaucrats.
  • Steve Cox
    commented 2017-01-23 19:59:09 +1300
    On another thread relating to the TOP 1 Tax a person who’d bought a block of land with the intention of not farming it intensively was worried by the size of that tax.
    If he’s lucky and is in an over-nitrogenated catchment then under this policy he’s going to get a nice fat cheque each year.
    Will it be an unintended consequence that land that is farmable is going to be taken out of production just to get the payout?
  • Katharine Moody
    commented 2017-01-23 14:05:01 +1300
    Sorry, “cease” below should be “seize”.
  • Katharine Moody
    commented 2017-01-23 14:00:46 +1300
    Tradable N rights I suspect would be extremely costly for both landowners and government to administer (lots of litigation and argument about measurement too – as I think has already been the case with Horizons/Overseer). More importantly, the policy fundamentally allows for pollution to continue so long as someone can afford to pay (I assume in the name of incrementalism/adaptation). From a values/ethics perspective, it’s a teleological view. I think we instead need to apply a different ethical framework, given it seems we have exceeded the environmental carrying capacity of freshwater in so many catchments already. Incrementalism is a status quo approach to my mind.

    Given the basis of the proposal requires limits to be set on a catchment basis, it seems more sensible to me to just regulate for that limit and ensure that no one exceeds it. I’m guessing that we have the scientific understanding to assign an N (and whatever other pollutant) production factor based on a per kg of live animal weight, and I assume we also have the technology to use GPS and thermal imaging technology to capture/quantify total animal biomass on every landholding? And then, too many animals and an enforcement order is issued to sell down – proof of sale required within a certain period based on capacity at the local works. And to deal with non-compliance? Perhaps a further power is needed to cease those beasts in excess of the assigned limits. Yeah, drastic, but I fear little else than strict enforcement of defined limits has the potential to truly fix this problem for future generations.
  • Brent Leslie
    commented 2017-01-23 09:38:06 +1300
    Sounds fantastic. However the logistics of measurement of this policy may be a nightmare. Care to indicate how/who is going to measure?
  • Aaron Meikle
    commented 2017-01-23 07:33:08 +1300
    Thanks Warren. I gathered all farms would be affected, I didn’t exactly phrase my question – will the N level be the same irrespective of farm type?
  • Oliver Krollmann
    commented 2017-01-23 07:25:56 +1300
    Thanks for the clarification, Warren. Good to know the policy will target all kinds of pollution.
  • Warren Fitzgerald
    commented 2017-01-23 00:08:16 +1300
    Some Responses:
    Aaron, this policy would apply across all sectors which are included in a catchment area. We are effectively talking about a nitrogen market whereby the science dictates the acceptable capacity for a certain catchment, and everyone within that catchment can trade their nitrogen credits. For example: those who choose to plant forests (3-5kg/N/ha) could sell off their credits to an intensive dairy farm, thereby transferring funds from high polluters to the lower polluters. The difference between a market and the proposed levy here is that the levy will dictate the price for a pollutant as opposed to letting the market set the price. As a working example, the Taupo catchment area has had a variation of this exact policy implemented nearly 10 years ago which produced the desired reductions in nitrogen leaching ahead of schedule and under budget… (www.laketaupoprotectiontrust.org.nz)
    Oliver, farming is the obvious example here but the policy does state several times that this you be applied to all industries. So landfills would be charged just the same as farmers, and it would be their job to pass those costs on to those who are creating the waste streams (us). Of course, landfills create a different type of pollution than farms do so it is not really comparing apples with apples. The example here is nitrogen, but I believe the point of the policy it to apply a cost to all forms of pollution to ensure that no industry is being subsidised by the environment. The market should then dictate whether is more financially viable to reduce the source of pollution or offset the effects of it.
    Mike, nitrogen leaching is a diffuse source to pollution so it is never really measured anyway, it is just predicted from models. Overseer is the main accepted nitrogen model designed and used in NZ which is largely free and already widely used by many land based industries so the costs of this policy (in relation to your comment) would be next to nothing.
  • Mike Adamson
    commented 2017-01-22 20:03:25 +1300
    I guess my main issue with this is the possibility that it would cost so much to find out how much nitrogen each farm leaches that the policy may be unsustainable.
  • Oliver Krollmann
    commented 2017-01-22 19:03:49 +1300
    This is a bit off-topic because the TOP 3 policy is mostly about farming (and it may be covered in the future Climate Change policy), but I’d like to see the Polluter Pays policy extended to include us, the John Does and Joe Bloggs, and the rubbish we produce. I think that many of us are still very nonchalant when it comes to rubbish, and some even seem to think that they are entitled to produce as much rubbish as they want and expect it to be disposable 24/7 at no cost. There is way too much rubbish going into our landfills (for instance in my district only plastics type 1 and 2 are recycled, although there are proven and working concepts to recycle all plastics 1 to 7), and this doesn’t align with leaving the environment to the next generation in the same or even a better state. I’d like to see bad rubbish (like non-recyclable plastic packaging and shopping bags, batteries, contaminated materials etc.) charged or taxed higher, much higher, and good rubbish or no rubbish (the best kind of all) supported by discounts or refunds, similar to the corrective levy example explained above. Polluter pays.
    This might be too small-scale to matter, I don’t know. Maybe that’s why it isn’t included in TOP 3. But I think we need to change the way we think of and produce rubbish, and once again do it smarter and in a sustainable way. There’s business potential in it, too, like generating electricity or making biofuels out of it, or simply better domestic recycling.
    Happy to stand corrected if it’s really a non-issue, I might be completely wrong here, not sure.
  • Aaron Meikle
    commented 2017-01-22 18:48:00 +1300
    Your example is just between 2 dairy farms. Will the policy apply across all farm types in a sub-catchment, or within each farm type?
  • Oliver Krollmann
    followed this page 2017-01-22 18:46:13 +1300