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

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 come from agriculture, mostly as biological methane and nitrous oxide from livestock burps, urine, and manure. 

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 money raised by the tax would be returned to the ag industry for research, technology, and incentive payments to farmers for their efforts to reduce greenhouse gases—by planting trees on their land, for example.
 
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 on busy highways and city streets, 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. While many countries pursue their climate pledges by focusing on carbon dioxide and cleaning their industries and power grids, New Zealand’s profile is different. It contributes only around 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. Speaking from behind hay bales stacked into a podium, she declared, “Here we have a proposal to make our farmers not only the best in the world, but the best for the world.” She predicted that Kiwi farmers would find a competitive advantage with customers worldwide who are willing to pay a premium for responsibly sourced food.

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. Also by mid-century, New Zealand aims to arrive at net-zero emissions for long-lived greenhouse gases including carbon dioxide and nitrous oxide. 

Critics pounced on the government’s plan the day it was announced. Greenpeace argued it didn’t go far enough and wouldn’t meet the reduction goals. New Zealand’s ACT Party, which sits in opposition to the Labour Party government that Ardern heads, highlighted the possibility that production could relocate to other, less efficient countries and add to 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. He later sat for an interview with National Geographic, in his office at Parliament in this harborside capital city. “As far as we know, no other country is looking at an emissions pricing system” for agricultural emissions, Shaw said. “There are schemes around the world which are incentive schemes, so governments are paying farmers to reduce emissions in some 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 Māori. As a legacy of British colonization in New Zealand, Māori were left with land that’s often marginal or of lower quality. Farming it can be difficult, and changes to its use may prove impractical. 

Shaw suggested that some of this marginal land could see significant investment for sequestration of carbon dioxide. Hoggard foresees another outcome—that the land could be retired from farming, leaving its owners looking 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 2023—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? But somebody has to go first.” And to have any hope of arresting climate change, he says, “we’ve all got to do it. 

“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.”