Feeding the world’s growing population
New Zealand’s reputation as a quality food producer is growing.
The Fertiliser Association of New Zealand promotes and encourages responsible and scientifically-based nutrient management.
Phil Journeaux, AgFirst
Completed May 2020
The purpose of this analysis is to calculate the amount of carbon tax payable on nitrogen fertiliser at the farm level, if included in the proposed ETS.
It considers farm level nitrogen fertiliser use and for pastoral farming the cost of alternative products (which are 2 to 3 times more expensive).
The key question is whether the carbon tax would reduce the amount of nitrogen fertiliser used and reduce greenhouse gas emissions from nitrogen fertiliser. However, what this report concludes is that this is unlikely for most farms simply based on cost. It is argued that the ability of this carbon cost to influence behaviour depends on the visibility of the costs. If the Point of Obligation is at the processor/supplier level, then the cost of the tax will be very largely hidden from the farmer, which will significantly diminish any likely behaviour change.
Ensuring the cost is directly visible to farmers provides the greatest incentive to change.