A holistic approach that targets improved emissions efficiency and supports increased food production is the key to balancing New Zealand’s competing environmental, economic, and social priorities, according to a new white paper by Rabobank.
The paper, titled The great New Zealand balancing act – Delivering sustainable emissions reductions, food security and economic prosperity was launched by Rabobank NZ’s CEO Todd Charteris at the Primary Industries New Zealand Summit in Wellington. It follows on from the first Rabobank white paper on this topic, released in August 2022.
Speaking at the Summit, Charteris said New Zealand had an important ongoing role to play in combatting climate change, and that the best outcomes for New Zealand – and the world – would be achieved by striking an appropriate balance between reduction of agricultural sector emissions, global food security, national economic prosperity, and the health and wellbeing of rural communities.
“Here in New Zealand and around the world, we are seeing damage to infrastructure, disruption to communities and threats to our ecosystems – all of which are ultimately impacting the income, livelihoods, and well-being of the global population,” he said.
“One of the most notable, and sensitive, of these eco-systems is the supply and demand of food products – as a marginal undersupply can result in significant price increases. And an upset in the balance of this system often affects the poorest of the world’s population first and the most.”
Charteris said this was why sustainability policies cannot be pursued at the expense of society and the economy and why the Paris Accord states that efforts to reduce overall emissions should be made “in a manner that does not threaten food production”.
“Balancing these two obligations – emissions reduction and food security – is particularly challenging in New Zealand due to the significant contribution the agri-sector makes to the country’s overall emissions profile, in combination with the oversized contribution the sector makes to global food supply,” he said.
“For every person New Zealand farmers feed domestically, they also feed seven people elsewhere in the world. Yet New Zealand policy seems single-mindedly focused on measuring New Zealand’s success by the reduction of absolute levels of emissions, and overlooking not only New Zealand’s ability to sustain the world while we all pursue impactful strategies to mitigate climate change, but also that New Zealand has a unique ability and potential for innovation to pursue excellence in emission efficiency per output unit.”
Unintended consequences
Charteris said the country’s current course is bringing about unintended consequences that are already being felt by the communities that we are relying on to feed and clothe New Zealand and the world.
“These changes include the pending loss of rural jobs, community vitality and impacts on rural business confidence and mental health, which are unintended impacts of the New Zealand Emissions Trading Scheme,” he said.
“We’re also seeing production being driven offshore to higher-emitting farming systems, resulting in downward pressure on our economy and society, whilst also increasing global emissions.
“It’s the ultimate lose-lose situation. We are currently all pulling in different directions and punching at whatever policy sounds the best – there is no harmony. A better approach would be considering policy more holistically and finding a natural harmony in our decisions across industry and the government, nationally or globally.”
Emissions efficiency ‘the name of the game’
Charteris said future emissions policy must look beyond borders as the challenge of food production and food security are global challenges that must be addressed together.
“What New Zealand can bring to the global answer is our unique ability and potential for innovation to pursue excellence in emission efficiency per output unit,” he said.
“Farmers have already successfully stepped up to the challenge to supply more food and lower emissions in recent years and with even more focus on lowering emissions, emissions efficiency is the name of the game.
“Efficiency will get even more important in the future as agriculture not only needs to deliver sufficient food, fuel, and fibre, but also needs to deliver global emission reductions.”
“Globally, we will need to supply 50 percent more food to meet population growth demands and this will likely result in at least 25 percent more greenhouse gas emissions. Here is where it gets especially challenging, as to meet the increased production needs will require 4-5 times higher carbon efficiency.”
Roadmap forward – ten key building blocks
Charteris said the report identifies ten key building blocks that will help to achieve emissions reductions alongside food security, strong economic growth, and rural prosperity.
“The first of these is building a pathway supporting the industry’s emission efficiency transition,” he said. “Supporting New Zealand’s producers to become even more emissions efficient will be the core challenge of the next decades and will require certainty and rules that allow farmers to further grow and invest.
“A shift away from the climate of fear and uncertainty would help kickstart needed investments that are critical to the success of the transition.”
Another key building block, Charteris said, was support for farmers from public and private partners. “Companies are increasingly working with farmers to reduce emissions, but more efforts, support, and financial remuneration of farmers services are needed to drive the large-scale change needed in New Zealand and globally.
“The focus must be on what will really help farmers understand emissions efficiency. This can be informed by identifying the on-farm areas needing improvement, how to implement the correct equipment or procedures, and most importantly, how to get necessary data to a convenient place that all required stakeholders can access.”
Charteris said a further key building block was consumers trusting the changes and emotionally buying-in. “Consumers are literally going to have to put their money where their mouth is. They won’t see any difference in the appearance of their products and so will need to trust the emission reduction practices. Clear communication will be key,” he said.
“The supply chain needs to convey the message of the extra environmental benefits delivered by farmers, something that will likely increase costs and therefore needs to be rewarded financially by consumers.”
In addition, Charteris said change needs to be incentivised rather than forced. “Intrinsic changes are always the best. However, in the case of emission reductions, the speed and magnitude of change is too big to be achieved through this kind of intrinsic change alone. Change needs to be incentivised,” he said.
“Farmers are agile businesspeople and positive economic incentives are the most effective way of encouraging a large-scale transition. Fostering an environment that appreciated research, development and innovation will allow farmers to take advantage of inevitable changes. Or even better, put them on the forefront of global industry wide change for the better.”
Other key building blocks mentioned in the report, Charteris said, were reducing food waste, building a political and financial framework to support efficient farms, and creating an environment that appreciates research and development.
