Can you tax a cow’s burps? New Zealand will be the first to try.

Can you tax a cow’s burps? New Zealand will be the first to try.

In a nation with seven times more livestock than people, taxing farmers for herds’ greenhouse gas emissions is a controversial proposal.

Published November 17, 2022

6 min read

In this picturesque South Pacific country, it’s a recurring scene: Where grass grows, livestock graze.

New Zealand has seven times more residents on four legs than on two–5 million people to 26 million sheep and 10 million cows–and dairy, meat, and wool account for more than half the nation’s export revenue.

But this abundance comes with an environmental cost. Half of New Zealand’s greenhouse gas emissions are from agriculture. This is mainly due to biological methane and nitrogen oxide from livestock burps and urine.

So last month, Prime Minister Jacinda Ardern unveiled a plan for New Zealand’s farmers to pay new taxes based on calculations of their herds’ emissions. The tax money would be returned to agriculture for research, technology and incentive payments to farmers who reduce greenhouse gas emissions. For example, by planting trees on their land.

The week after the plan was released, an advocacy group called Groundswell NZ organized protests in more than 50 cities and towns around the country. Farmers drove their tractors slowly along busy streets and highways, snarling traffic. In downtown Auckland, a tractor carried a sign with the message “Don’t bite the hand that feeds you!” Other signs read “Enough is enough” and “Farming tax=Death to rural NZ.”

The island nation’s citizens debated Ardern’s proposal as world leaders met in Egypt at the UN Climate Change Conference, to revisit the emissions reduction commitments set in the 2015 Paris Agreement. Many countries focus on carbon dioxide and cleaning up their power grids to fulfill their climate pledges. New Zealand’s profile, however, is very different. It contributes just 0. 17 percent of the world’s emissions. And it already gets 82 percent of its electricity from renewable sources.

In a bid to further cut emissions, New Zealand’s government looked where they were most abundant: on farms.

‘Best for the world’

Ardern announced the tax plan–the first of its kind and almost three years in the making–at a dairy farm on the nation’s North Island.

Ardern announced the tax plan–the first of its kind and almost three years in the making–at a North Island dairy farm.

Ardern projected that the new system would enable the country to meet its target of emitting 10 percent less methane by 2030, and move it toward a cut of at least 24 percent by 2050. New Zealand also aims to achieve net-zero emissions of long-lived greenhouse gases such as carbon dioxide and nitrogen oxide by the middle of the century.

Critics pounced on the government’s plan the day it was announced. Greenpeace claimed it wasn’t enough and wouldn’t meet the reduction goals. The ACT Party of New Zealand, which is opposed to the Labour Party government headed by Ardern, raised concerns about the possibility that production could move to less efficient countries and increase global emissions.

The sharpest response came from Federated Farmers, New Zealand farming’s biggest lobbying group, which said the plan would “rip the guts out of small-town New Zealand.”

James Shaw, New Zealand’s climate change minister, joined Ardern at the announcement. Later, he sat down for an interview with National Geographic in his office at Parliament, this harbourside capital city. Shaw stated that no other country has an “emission pricing system” for agricultural emissions. “There are incentive schemes all over the world, so governments pay farmers to reduce their emissions in certain ways. This scheme has a component of that, but it’s carrot and stick as opposed to just carrot.”

Maori farmers hit harder

In the North Island town of Kiwitea, Andrew Hoggard had just finished milking his 540 cows and returned them to pasture, when he paused for a phone interview. In addition to being a dairy farmer, Hoggard is also the Federated Farmers national president.

New Zealand should reconsider its reduction targets–in particular, cutting methane by 10 percent this decade, Hoggard says: “The government has basically just grabbed that headline figure and not looked at the detail.”

In the short term, Hoggard says he’s less concerned about dairy farmers than about beef and sheep farmers, whom the government’s models forecast would be affected disproportionately by the new tax system.

It’s estimated that one quarter of New Zealand’s beef and sheep farms are owned by indigenous Maori. Maori were often left with marginal or lower quality land as a result of British colonization of New Zealand. It can be difficult to farm and may not be suitable for other uses.

Shaw suggested that some of this marginal land could see significant investment for sequestration of carbon dioxide. Hoggard sees another outcome: that the land could be retired and its owners left looking for work.

‘Somebody has to go first’

The government is soliciting feedback on the proposed plan until November 18, and hopes to deliver a final report by the end of the year. On the current timetable, if Parliament introduces and approves legislation in 2023, the tax system should take effect in 2025. But first comes 2024–an election year in which New Zealanders, including the 85,000 employed in agriculture, may speak with their votes.

During our interview, Shaw reflected on the potential reach of this plan to cut agricultural emissions. “The system that we’re developing here, we know is important to us,” he said, “but we actually know that there’s quite a high chance it’ll get picked up, or elements of it will get picked up, in other countries as well, over time.”

Shaw noted some critics of the proposal have objected “that nobody else is doing it, so why should we? Shaw noted that some critics of the proposal have objected “that nobody else is doing it, so why should we?” And “we all have to do it” if we are to stop climate change.

“So from my perspective,” Shaw concluded, “this is about New Zealand reducing its emissions. But in some ways it’s about us being an icebreaker for the rest of the world to follow.”

Read More