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Barry Brill

Should agricultural methane be taxed?

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The science of biogenic methane is in its infancy – confused, uncertain and contentious. Why must New Zealand be the “world leader” in taxing it?

New Zealand is a signatory to the UN Framework Convention on Climate Change and its spin-off, the Paris Agreement of 2015, which aims to:  “Hold the increase in the global average temperature to well below 2°C above pre-industrial levels…”

To meet our obligations under that treaty, we operate a nationwide Emissions Trading Scheme (ETS) that covers all sectors and most greenhouse gases (GHGs). The ETS raises the prices of virtually all our goods and services (as does GST), but in a differential way that is proportionate to emissions.

An excellent recent article by Roger Partridge of The New Zealand Initiative explains very clearly how the ETS works, in both theory and practice. This scheme ensures we all get the “biggest bang for the bucks” that we invest in climate policy. Every dollar spent elsewhere is an irresponsible waste of money that merely makes it harder for the ETS to do its job.

So why is agricultural methane exempted from the ETS?  

Why has every political party in Parliament always agreed that this particular greenhouse gas needs to be handled in a different way.

There are many good reasons. Here are a few of them, in no particular order:


1. Leakage

An abiding concern of all climate policy is to avoid measures that merely relocate a source of emissions from one country to another, but do nothing to reduce aggregate global emissions. This is called “carbon leakage” and is invariably addressed by legislated protection of industries that are both trade-exposed and emission-intensive.

The New Zealand ETS has an “industrial allocation” scheme to protect the international  competitiveness of such businesses as Tiwai Point, NZ Steel, Methanex, etc

Our livestock farming is the very epitome of both ‘trade-exposed’ and ‘emission-intensive’. About 95% of the milk produced in New Zealand is processed for export into the world’s commodity markets. The global volume of those markets is determined by aggregate demand, and any reductions by one supplier are quickly replaced by another supplier.

“Leakage’ of our dairy production would not only be bad for New Zealand but also a disaster for the Paris Agreement goal. That is because New Zealand’s farm production has the lowest carbon footprint in the world – less than half the international average. If a tonne of butter processed here was produced in Germany instead, the associated methane emissions would double.

If methane were to be included in the ETS, the existing law would ensure an industrial allocation of Units to cover livestock farmers. The whole system would be chasing its tail and obviously makes no sense.

Despite knowing these facts, Greenpeace Aotearoa is running a current petition calling for our dairy herd to be halved.  Insane or not, we need to remember that it has a very strong influence on the Minister who has run the government’s climate policy for the last six years.


2. Food Production

The Paris Agreement deliberately pre-empts any argument regarding the relative priorities of food production and climate change mitigation. The very next sentence after that setting the 2°C target reads:  [emphasis added]

“(b) Increasing the ability to… foster climate resilience and low greenhouse gas emissions development, in a manner that does not threaten food production;”

The less-developed world (the Global South) would have rejected the Paris Agreement if the food assurance had not been spelled out in the document in unambiguous arms. Whatever might be threatened by future global warming, the spectre of famine and malnutrition was more immediate and much worse.

The fear of food shortages is now greater than ever. The UN’s World Food Program says “we are knocking on famine’s door”, while the World Bank is issuing monthly updates on “rising food insecurity”. 

Although the Agreement may not be legally binding, New Zealand is politically bound to respect and abide by its terms.

No country in the world has ever attempted to include agricultural methane in an ETS.   


3. Temporary gas

Unlike carbon dioxide (CO2), methane (CH4) only remains in the atmosphere for a period of 4-12 years (8-year average) and then disappears forever.  Short-lived gases like methane  “flow” in-and-out of the atmosphere without building up any enduring “stocks”.

This means that the notional ‘stock’ of emissions that could be attributable to a stable flock of sheep has daily subtractions that are equal to its daily additions. After an initial contribution to the atmosphere’s stock of GHGs (probably 40 years ago), such a farm makes NO further contribution to current or future global warming.

But in New Zealand the national sheep flock has been far from stable. It has reduced from a peak of over 70 million to less than 25 million today, and is still reducing.  In 1990, which is the base year chosen for international calculations of GHG, New Zealand 57,852,192 sheep. During the periods of the Kyoto Protocol and the Paris Agreement, our biogenic emissions from sheep farming have more than halved! 

The Climate Change Response Act 2002 recognises the fundamental difference between stock gases and flow gases and legislates a “split-gases” system for the purpose of budgets, targets, the ETS, etc. They are quite different animals (pardon the pun) with many different characteristics.


4. Trivial/unknown quantities

The greenhouse effect progresses in logarithmic rather than linear steps and at 400ppm+ carbon dioxide is very close to saturation. That is why additions to atmospheric methane are theoretically capable of causing more warming – because it is extremely scarce.

While the volumes of carbon dioxide, water vapour and other atmospheric gases are usually accounted for in parts-per-million, methane is measured in parts-per-billion. NASA estimates that methane makes up only 0.00017% of the atmosphere. Compare this with the most abundant GHG, water vapour, which is about 4.0% of the atmosphere, so is 23,500 times more abundant than methane.

These minuscule quantities are obviously hard to measure with any accuracy. The UN’s Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report (AR6) of Working Group 1 (WG1) on “The Physical Science” Chapter 2 (whose authors include six New Zealanders) at p 142 notes that:   [emphasis added]

“[Methane’s] growth rate has decreased substantially from highs of greater than 1% yr–1 in the late 1970s and early 1980s to lows of close to zero towards the end of the 1990s. The slowdown in the growth rate began in the 1980s, decreasing from 14 ppb yr–1 (about 1% yr–1) in 1984 to close to zero during 1999 to 2005…” 

“The reasons for the decrease in the atmospheric CH4 growth rate and the implications for future changes in its atmospheric burden are not understood but are clearly related to changes in the imbalance between CH4 sources and sinks… The total global CH4 source is relatively well known but the strength of each source component and their trends are not.”

“GCM radiation schemes were found to be in poor agreement with the line-by-line models, and errors of over 50% were possible for CH4.”

In New Zealand, Van der Lingen (2009) points out that we have no idea why New Zealand’s atmospheric methane measurements were static while livestock numbers were rising in the 1970s and 1980s but then increased after the numbers stabilised in the 1990s.

Our Labour Government, being acutely conscious that we know next to nothing about atmospheric methane, have invested $26 million in a methane-sniffing satellite. Unfortunately, they partnered with a climate change lobbyist in the US which has hijacked the project and we are unlikely to learn anything much about methane volumes in our part of the world.   

One could reasonably conclude from the IPCC’s recent (2022) observations that the science of atmospheric methane is still in its infancy, and has a long way yet to go before it can responsibly be used as a basis for national policymaking. 


5. Volume or weight?

Each ‘Unit’ taxed by the ETS comprises 1 metric tonne (Mt) of CO2. So, a Unit of methane would be the quantity of CH4 that would theoretically cause the same temperature increase (ie have the same ‘global warming potential’) as 1Mt of CO2. The concept is described by NIWA:

“If 1kg of a particular greenhouse gas traps a certain amount of heat, how much CO2 would trap the same amount? The 100 year GWP of methane is 25, therefore if 1 tonne of methane was released into the atmosphere, it would create the same warming as 25 tonnes of CO2. This is often described as 25 tonnes CO2e, where e stands for equivalent.”

But this apparently simple statement gives rise to an important question – why is the methane expressed as a unit of weight rather than volume

Molecules of a GHG can cause warming if they re-radiate a photon of IR energy on its way to space. All the radiative action is at molecular level and the number of reactions is proportionate to the number of molecules. The weight of any molecule is completely irrelevant.

Methane has four hydrogen atoms and is very much lighter than CO2. A kilogram of CH4 would contain 2.75 times as many molecules as a kilogram of CO2. Comparing the two gases by weight is like comparing apples with oranges.

This has long been understood. I wrote an article about it some 12 years ago – Methane: myths & misrepresentations – which has never been challenged. But it is apparently easier for government scientists to measure emissions in terms of weight, so that is what they continue to do.


6. Methane vs water vapour

It has been noted above that methane molecules are very scarce in the atmosphere. Additionally, they absorb outgoing infrared photons in only one extremely narrow sector (7-8 microns) of the electro-magnetic spectrum. And, even in that tiny sector, methane molecules must compete with water vapour molecules which absorb photons just as effectively.

The level of water vapour in the atmosphere (ie humidity) varies widely in time and space. Allison & Sheahan (2019) takes the average level of water vapour as a conservative 15,000 ppm, or some 8,800 times the volume of atmospheric methane. As mentioned above, the average is 23,000 times. Talk about unfair competition!

Common sense tells us the chances of a methane molecule colliding with a 7-micron photon must be very small.  But now we don’t need to rely on common sense. A hugely complex study by world-leading researchers published as Happer & van Wijngaarden (2022) and summarised here and here, has actually measured the radiative forcing attributable to methane. They find it is not materially different from CO2 – ie the real GWP =1. 

Although climate campaigners and some scientists have criticised the H&vW conclusions, nobody has (yet) refuted either their data or their calculations. The fact is that H &vW must win by default, because no other researcher has even tried to measure the warming impact of methane in the real world. The IPCC, Allen et al and all other climate scientists have relied solely upon laboratory experiments, assumptions and computer models.

As Dr Tom Sheahan points out, laboratories carry out their experiments using “dry air” – with water vapour first extracted by desiccants. They need to do this because water vapour is so variable that it would confound their results. But then their experiments unfortunately tell us nothing about the methane greenhouse effect in the presence of water vapour.   


7. Macro measurements

Few people seem aware that New Zealand as a whole absorbs more greenhouse gases (GHGs) than it produces – in other words, we are a “carbon sink”.

A NIWA study, Steinkamp et al (2017) found that our calculated annual Greenhouse Gas Inventory (NZGGI) is way out-of-whack with real world measurements:

“The terrestrial biosphere in New Zealand is estimated to be a net CO2 sink, removing 98 (±37) Tg CO2 yr−1 from the atmosphere on average during 2011–2013. This sink is much larger than the reported 27 Tg CO2 yr−1 from the national inventory for the same time period.”

Those years were no anomaly. Bukosa et al (2021) found that in 2013-20:

“Our new results suggest that the strong sink observed in 2011-2013 did not diminish, but for recent years we have found an even stronger sink than for before.”

NZGGI consistently under-estimates the sink value of our forestry and land use sectors as being 27 Tg CO2 per year, when it is actually nearly five times higher. This huge difference is attributed to forestry and soil carbon effects that are not taken into account by the IPCC  measurement guidelines.

So how much CO2-e is taken out of the atmosphere every year by our grass-growing sectors? Nobody knows – but it is undoubtedly a big number.  The Ministry says it shouldn’t be counted because most of it was put in place before 1990, but so were our flocks of sheep and herds of cows. There is a strong argument to count neither or both.

In May, thousands of New Zealand schoolchildren held a ‘strike’ and street march to demand that farmers adopt regenerative agriculture, a term that is undefined but is apparently “a philosophical approach to managing farmland”. Teachers have told them that this approach would reduce our farmers’ carbon footprint. But the only available empirical data suggests that our pastoral farmers must be applying the philosophy now and already have a massive negative carbon footprint.


8. Methane sink?

Forest land is a major methane sink. Bacteria known as methanotrophs consume 30 million tonnes of methane every year, but we have no idea how much is being taken out of the atmosphere by New Zealand native and plantation forests. Perhaps we absorb more than we produce, just like carbon dioxide?

A team of local scientists has only just begun to research this issue with methane flux chambers in pine forests at Christchurch and Kaingaroa, observing that “We’ve already got a big land area that is potentially absorbing methane when no one’s calculating this at the moment.


9. The GWP debacle

Away back in 2011, Wilson Flood showed that the volume/weight befuddlement had led to  vastly exaggerated concerns about methane. The abstract of his research paper reads:

“A doubling of the amount of methane in the atmosphere with its present composition would produce a warming equal to only about one thirtieth of the warming produced by a doubling of carbon dioxide. At present rates of increase it would take about 360 years for atmospheric methane levels to double. Molecule for molecule, methane is 7 times more effective at being a greenhouse gas than carbon dioxide. Present changes in atmospheric methane levels pose no environmental risk whatsoever.”

Predictably, this research was totally ignored in the IPCC’s AR5 published in 2013.

But then a seriously heavyweight research paper appeared, Allen et al (2018) “A solution to the misrepresentations of CO2-equivalent emissions of short-lived climate pollutants under ambitious mitigation”. I have discussed this paper in detail elsewhere. In a nutshell, it agreed with Dr Flood that methane is 7 times (not 28 times) more effective at being a greenhouse gas than carbon dioxide.

Several of the authors of this paper were also IPCC lead authors, and the AR6 has put beyond any doubt that the GWP100 formula (which had always been used in New Zealand) was now off the table, once and for all. At page 1016 of Chapter 7:

“…expressing methane emissions as CO2 equivalent of 28, overstates the effect on global surface temperature by a factor of 3-4”

A summary of the ‘take-outs for farmers’ is at the website of Beef +Lamb NZ here.

No doubt this took the legs out from under Minister Shaw. He had been personally briefed on the GWP flaws by Professor Allen in a visit to New Zealand in 2019, but in a later answer to a Parliamentary Question said he was not a climate scientist himself and would be guided by the  IPCC. That hasn’t happened yet.  


10. Scientists vs bureaucrats

The IPCC assessment reports are released in sections over many months to maximise their media impact, so the 2021/22 AR6 series was not entirely finalised until a “Synthesis Report” was tabled in March 2023.

Neither that final volume, nor the earlier “Summary for Policymakers” found it politic to discuss the scientific verdict on the GWP of methane. But that is political science and not physical science. Now, there is no further opportunity for revisions or second thoughts, so the AR6 science must be taken as firmly settled, once and for all.

This changes everything.

All the scenarios and budgets are now clearly wrong, so our Ministry for the Environment has warned the Minister that their hoped-for warming reductions cannot be achieved. The desperate Ministry’s only solution is to just pretend that it didn’t happen.  They have talked to their EU counterparts and found that “there is no appetite to reopen the discussion.”

Most people will immediately see the fallacy in the Ministry’s way of thinking. It stands out like the proverbial accoutrements of a sheepdog!

If methane will cause only 25% as much warming as previously expected, then we won’t need those huge reductions, that appear in the now-outdated scenarios. With this new understanding, the 1.5°C aspirational goal comes back within our collective grasp – and with much less pain and anxiety than used to be expected. It’s wonderful news, and a win-win all around. Let’s celebrate!

The Ministry worry that mitigation is a zero-sum game, so CO2 emitters will now have to take up the warming-reduction quota that was previously assigned to the CH4 emitters. But that’s obviously wrong. All of that quota – and a whole lot more – has now disappeared from the liabilities side of the balance sheet, and the deficit at the bottom has therefore shrunk.

Sure, this major scientific revision has now invalidated years of outputs by countless climate bureaucrats and diplomats all around the world, and also leaves egg on the faces of many politicians. That is unfortunate, of course (even if it does improve the job security of many thousands) but that factor surely pales into insignificance against the need to accurately predict the threat of future global warming and the available levers to reduce that threat.

The methodology for preparing the annual Agricultural Greenhouse Gas Inventory is set out on the website of the Ministry for Primary Industry. It includes: “

Countries can either use the default methods and values published in [the IPCC] guidelines to estimate their emissions or they can develop their own country-specific methods.

So, New Zealand is not dependent on the “appetites” of EU bureaucrats and can hew to the truth in accord with our usual customs.


11. HWEN

The He Waka Eke Noa, or Primary Sector Climate Action Partnership was formed in 2019 to seek consensus on a practical and credible system for reducing emissions at the farm level. The discussions took place under threat of agricultural gases being included in the ETS.  

HWEN comprises 13 parties – six of which represent pastoral farmers: Beef + Lamb NZ, DairyNZ, Federated Farmers, Meat Industry Association, Deer Industry NZ and Fonterra.

A cynic might note that the Government came to the negotiating table only after the Minister had been made aware that the statutory targets for methane were based on serious flaws. The Government could no longer just dictate outcomes without a high likelihood of Court challenges that it couldn’t ultimately win.

To the evident concern of a great many farmers, HWEN did reach a consensus and reported publicly in December 2022. An executive summary of the recommendations can be found here, at pages 4 and 5.  Those recommendations were strongly opposed by climate change lobbyists and were later the subject of an adverse report by the Climate Commission. For reasons that remain unclear, the Government ultimately rejected the proposed compromise.

The Government then turned its attention to other solutions, in particular a fertiliser tax. After strong opposition from the sector, this proposal was also withdrawn.

The National Party, which had previously supported HWEN, pronounced it to be dead in June 2023, although both the Prime Minister and Federated Farmers have indicated that talks would continue.


12. Statutory targets

 A number of submissions made sure that the members of the multi-party Select Committee which considered the Zero Carbon Bill in 2020 were well aware of the new science – and they must surely have known that the GWP100 was on its deathbed.

Numerous submitters asked for a full public enquiry by the new Climate Commission to both update the relevant science and try to find a consensus about what the country was aiming to achieve by its proposed methane regulation.

For reasons that only a politician could ever understand, the Committee turned a deaf ear to all these pleas.

Out of thin air, the Bill set completely arbitrary targets to reduce biogenic methane to 24-47% below 2017 levels by 2050, including a 10% reduction by 2030. Those targets remain and are still legally enforceable.


13. National Party Policy

On 12 June, the largest opposition party released its policy for “Reducing Agricultural Emissions” which can be found here. The policy document contains a good deal of common sense and has been welcomed by most farming leaders.

However, the document repeatedly claims that “on current measures, agriculture produces around half of this country’s greenhouse gas emissions” – despite a footnote admitting that their assertions are: “Based on the GWP100 standard which is not universally accepted as capturing warming effects of methane”

Not universally accepted? After that very standard has been unequivocally rejected by the IPCC?  Where on earth does the National Party get its scientific advice?

Perhaps the best part of the announced policy is a pledge that has not been highlighted:

Review methane targets: National will review methane targets in 2024 for consistency with no additional warming from agriculture, in line with the Zero Carbon Act.

This review could not be more essential. It must be conducted openly and transparently with public hearings by an independent body (not the compromised Climate Commission)..

As Dr Muriel Newman has recently shown, people everywhere are fed up with economy-crushing policies that are based on ideology rather than sound science. None more so than our farmers. They will not, and should not, accept another stitch-up behind closed doors – which was what happened in 2020.

Then there is the worst part of the policy:  

Science-based approach: Pricing must be based on rigorous, scientific measurement and monitoring of farm-level emissions.

So farm-level measurement is the only aspect of the policy that will be based on rigorous science? What will other policy decisions be based on?


14. Summing up

As the National Party policy document acknowledges, agriculture is the backbone of New Zealand’s economy, contributing 11 per cent of GDP, 13 per cent of employment and 81 per cent of goods exports. Our farmers are among the most competitive and carbon-efficient food producers in the world, feeding an estimated 40 million people worldwide.

So why do we want to be the first country in the world to apply a punitive tax to its own pastoral farmers? Masochism? Tribalism?  In the past, ideologues have shifted the blame to scientists – usually the IPCC – but that ploy has now evaporated.

The plain fact is that serious scientists know next to nothing about the real-world greenhouse effects of atmospheric methane from agriculture. This has left a vacuum which has been filled by myths and memes and propaganda.

This essay has tried to illuminate the extent of our current  ignorance about agricultural methane as a greenhouse gas  and has contended that:

  • nobody knows why the global growth rate of atmospheric methane plummeted around the turn of the century; or why its trajectory is the direct opposite of New Zealand livestock numbers;
  • nobody knows why IPCC climate models differ radically (over 50%) in their calculations of the radiative forcing of methane, depending on the type of model;
  • nobody knows how to express the radiative forcing expected from a molecule of methane as a multiple of the RF of a molecule of CO2 (ie GWP). All that is known for sure is that the historical GWP100 standard is very wrong;
  • nobody has ever measured the actual radiative forcing of methane in the real world (ie in the presence of water vapour) except Happer & van Wijngaarden – painstaking and complex research which is very new and has not yet been replicated or stood the test of time;
  • nobody knows why the NZGGI underestimates New Zealand’s carbon sinks by about 500% every year; or whether our grass-growing sectors take out of the atmosphere each year a lot more CO2-e than they contribute;
  • nobody knows how much methane is extracted from the atmosphere each year by methanotrop bacteria in New Zealand’s native and plantation forests (or whether we could take out much more);
  • nobody seems to know whether taxing biogenic methane will be an egregious breach of the Paris Agreement injunction against threats to food production;
  • nobody can explain how future global warming can possibly be reduced by fostering a spatial shift in meat or butter production from New Zealand’s uber-efficient farmers to overseas competitors who have higher carbon footprints;
  • nobody has explained why New Zealand’s farming exporters are not given generous tax exemptions in the same way as other trade-exposed, carbon-intensive sectors;
  • nobody seems to know why NIWA and others report their estimates of quantities of atmospheric methane in terms of weight when their greenhouse warming contribution depends upon their volume;
  • nobody knows why New Zealand has an arbitrary statutory target to reduce agricultural methane by up to 47% by 2050, when no comparable country has anything similar;
  • nobody can explain why a country that is so critically dependent on agriculture wants to grossly exaggerate that sector’s climate impact; and also to be the very first country in the world to subject food exports to a novel tax.

Perhaps the biggest unknown of all is – what do ordinary New Zealanders really gain from having politicians that try so hard to be “world leaders” in climate change, that they lose sight of all normal and sensible cost/benefit considerations?

It beggars belief that our legislators are prepared to commit to multi-billion-dollar policies to achieve supposedly science-based objectives, at a time when the scientists themselves say they don’t yet have a clear handle on this very new area of their discipline.