Chapter 1: The Challenge to New Zealand Agriculture

What could endanger New Zealand's agricultural sector? Surprisingly, it might stem from carbon border adjustments (CBA), which some experts view as a new form of export tariffs. Byron Fay, an international climate policy specialist, emphasizes in the latest SuperTilt podcast that proposed CBA regulations from the EU, UK, and Japan pose a significant threat to New Zealand’s agricultural industry in both the short and medium term. A report from the NZ Institute of Research echoes this concern, highlighting the long-term risks that increased global scrutiny on the environmental effects of trade may bring to exporters.

For those unfamiliar with CBA, these are taxes imposed on imported goods according to their carbon emissions. Governments aiming to implement CBA policies seek to create a fair competitive landscape for domestic producers who maintain lower carbon footprints but may face higher production costs compared to cheaper imports with higher emissions.

While skeptics might argue that CBA proposals are merely a rebranding of import tariffs intended to shield local markets, the reality is that such policies could significantly impact New Zealand’s dairy and meat export sectors. The looming threat of international CBA regulations could jeopardize both the financial viability and the environmental reputation of New Zealand’s agriculture.

However, every significant threat also presents an opportunity, particularly in technology. A world where CBA frameworks are widely adopted could foster economic opportunities for local innovation. With a small but leading agricultural economy, New Zealand is uniquely positioned to pioneer carbon-reducing agricultural intellectual property (IP) that could be valuable in markets implementing CBA, such as the US. This creates a potential revenue stream by helping dairy and meat sectors adapt to ecological changes.

Yet, this transition introduces new challenges for those aiming to spearhead the change. The intersection of AgriTech and agricultural carbon emissions brings genetic modification to the forefront. Specifically, the research, development, and management of genetically modified organisms (GMOs) and the relevant technologies are critical.

I have long believed that New Zealand's stringent GMO legislation is a major barrier to achieving a sustainable agricultural sector. Genetic modification techniques hold enormous potential for enabling agriculture to meet carbon sustainability goals within necessary timeframes; yet, they remain largely illegal.

The advancements in genetic techniques and our understanding of genetic models, particularly in food production, have progressed significantly since we last engaged in national discussions on this issue. But is society ready to accept the beneficial role such technologies could play in our decarbonization efforts? I have my doubts. Conversations with well-educated individuals often reveal misconceptions about genetic modification, leading to irrational fears rather than informed discussions.

If we are not willing to adapt our agricultural sector, we must reconsider our stance on GMOs and related technologies to maintain global competitiveness within the required timeframes. Although I believe genetic technologies could positively contribute to decarbonizing agriculture, GMO legislation remains a contentious issue for the government, which must balance the economic implications of CBA regulations with the complex conversation about achieving agricultural decarbonization while ensuring economic viability.

We delve into this topic and more as we explore the role of public policy in steering technological advancements in climate change. For a deeper discussion and access to previous episodes, check out our platforms on Spotify (link) and Apple (link).

Chapter 2: The Role of Technology in Agriculture

The first video titled "Designing Effective Border Carbon Adjustment Mechanisms" discusses how these mechanisms can be structured to minimize negative impacts on industries while promoting sustainability.

The second video titled "Carbon Border Adjustment Mechanism (CBAM)" provides insights into the implications of CBAM on global trade and agriculture.