Carbon Border Adjustments — Industry Killer Or Opportunity To Make A Killing?

What will kill New Zealand Agriculture? Believe it or not, it could be re-branded export tariffs in the form of carbon border adjustments (CBA). That’s the opinion of international climate policy expert Byron Fay.

In the latest SuperTilt podcast, Byron made it abundantly clear that CBA legislation being proposed out of the EU, UK, and Japan will be one of the biggest threats to the NZ agriculture industry in the short to medium term. The NZIR report reinforces this opinion suggesting “there remain some longer-term risks to our exporters from the increased global focus on the environmental impacts of trade”.

For those not aware of CBA, they are a tax mechanism imposed on imported goods based on their carbon footprint. The aim of governments looking to implement CBA policies is to level the playing field for domestic industries that produce goods with lower carbon footprints but that may have higher costs than imports that may be cheaper but have higher carbon footprints.

Whilst cynics might suggest the CBA proposals are simply a palatable re-branding of an import tariff designed to protect local markets, it doesn’t change the impact such a policy may have on our dairy and meat exports. International CBA policies certainly seem to be a big looming threat to NZ’s agriculture, both financially and to our green branding and market positioning.

Every good threat, however, is usually mediated by an equal and opposite opportunity, and this is where tech can play its part. A world with robust and prevalent CBA frameworks provides an interesting economic opportunity for local innovation.

With a small yet world-leading agriculture-based economy, New Zealand is somewhat positioned to lead the world in carbon-reducing agriculture IP; IP that can be leveraged in markets implementing carbon border adjustments, like the US. There is potentially a lot of money to be made in helping dairy and meat maintain its place at the dinner table by being at the forefront of its ecological transformation.

From my point of view, however, this will quickly open up a new can of worms for those interested in leading this transformation. The intersection between AgriTech and agricultural carbon…