NZ's climate change goals face a problem, with many eggs in the basket of waiting for agreement on an international carbon market, which has no guarantee of happening; 2030 may be closer than we think

By Alex Tarrant

New Zealand’s Paris Agreement climate change commitments face a problem.

We will not be able to meet our goal of reducing emissions to 30% below 2005 levels by 2030 in a ‘cost effective’ manner without being able to link our Emissions Trading Scheme (ETS) to international carbon credit markets.

But, unfortunately, some current features of our ETS are barriers to linking with those markets. What are those barriers? Well, there’s a problem there, too. The government doesn’t seem too keen on letting anyone know, under the auspices of commercial sensitivity.

Climate Change Minister Paula Bennett on Wednesday released a set of proposals that she said would help ensure New Zealand is in the best possible position to meet the 2030 target without it costing too much. These are based on results from the second stage of an ETS review launched in 2015 to ensure the scheme was “fit for purpose” going into the 2020s.

The ETS is New Zealand’s key mechanism for trying to encourage polluters to reduce emissions so the government can meet its climate change obligations. Famously, it does not cover agriculture emissions, which are set to take up nearly two-thirds of our ‘carbon budget’ from when Paris actually kicks off in 2021, running through to 2030.

Although the scheme is in place, and everyone talks about it all the time as being there and doing something, an evaluation in 2015 concluded the ETS had not significantly impacted business investment decisions to reduce emissions. Basically, it’s not working, and the current track means we won’t meet those Paris goals.

The changes announced on Wednesday interestingly (probably not coincidentally) came ahead of a Parliamentary Commissioner for the Environment report on this very subject due on Thursday, likely to be rather critical of the government’s efforts so far.

‘Changes’ is actually a bit generous. They are ‘in-principal decisions’ by Cabinet to sometime over the next few years allow for auctioning of carbon units, look at imposing a different price ceiling and coordinate decisions on the supply settings of new units. They will also limit ETS participants’ use of international units when the government re-allows access to international markets.

While access to international carbon markets are the goal for us now, it should be remembered that, once upon a time, polluters were able to buy international units on markets run by those well-known climate supporters, Russia and Ukraine. However, in 2013 after various allegations of dodgy prices and corruption, it was announced the ETS would go domestic-only in 2015.

That still meant we were able to feel warm and fuzzy about having an ETS, when many other countries didn’t. Then the Paris Agreement came along, with our new 2030 target. Another review of the scheme was needed, which concluded that we’d need access to international markets again or else face much higher domestic costs for meeting the targets.

Basically, reducing and/or offsetting the emissions we need to reduce and/or offset to meet the 2030 goal was placed in the ‘much too hard’ (or costly) basket if we were just going to do it all ourselves. The government’s position is they want NZ polluters to be able to pollute but ‘offset’ that by purchasing credits put up by Norwegian forest farmers (or Ukrainian ones).

So how’s that work going on connecting to an international carbon market again? The Cabinet paper released Wednesday on the subject doesn’t really want you to know – the only redactions in the paper relate to this specific topic.

I asked Bennett’s office why this was. The response was that an international carbon markets project was established in 2016 to identify linking options, with a view to enabling New Zealand to source high integrity international emission reductions in the 2020s. We’re in the early stages of discussions with a number of different countries and so the redactions were made to preserve the integrity of those early discussions.

To me, this all sounds like we’re in danger of having our eggs in one basket. We need access to international markets to keep the cost down of achieving the Paris 2030 goal. But discussions on creating these markets are only in the early stages, and involve multiple countries. Given the amount of time it takes to come up with climate deals, it doesn’t sound like anything will be done soon.

I asked Bennett about it all on her way in to Question Time Wednesday. She acknowledged that, “to be fair there is no international carbon market at the moment…that’s something that has to be created.”

There were a number of countries that were interested, “and I can see in the future you could see linking with ETS systems.” However, “there is no guarantee,” she said. “That’s why New Zealand has to be lowering their emissions, and it’s part of it. But I do think it’s a conversation worth having.”

So, if there’s no guarantee of an international market being created, then aren’t our eggs in one basket? A dodgy basket?

“Goodness no,” Bennett said. “When I just look at what we’re going to be doing as far as more renewable energy, the use of electric vehicles, technology and advances that are going on on-farm, there’s just such a great range of things that we can do, and you’ll see more of that as it’s mapped out over the next year.”

Agriculture

It was interesting that she mentioned on-farm technology. Agriculture isn’t included under the ETS, but accounts for nearly half of New Zealand’s emissions.

The Cabinet paper was pretty clear that things wouldn’t change any time soon. Agriculture will remain outside the ETS until: there are economically viable and practical technologies available to reduce emissions and, New Zealand’s trading partners make more progress on tackling their emissions in general.

Those are the exact words. That leaves a bit of scope to leave it out until the electoral climate allows for a change of stance.

However, in the meantime, our Paris Agreement ‘carbon budget’ will include agriculture emissions because they’re obviously included in the figures for New Zealand’s overall emissions that we have to reduce by 2030.

Between 2021 and 2030 that budget – the CO2 emissions we don’t need to reduce or compensate for to meet the target – is 594 MtCO2e. That’s just below 60 Mt a year between 2021 and 2030. Over those ten years, on current projections, we’re set to emit 814 MtCO2 – much higher than our carbon budget.

Of that 60 Mt a year we’ve got 'for free', agriculture is set to take up about 40 Mt each year. In what could be the understatement of the year, officials describe the two-thirds as merely “part of the carbon budget.” with the rest classed under ‘free allocations’ and unallocated budget.

Agriculture really is the heifer in the room. But the main focus currently is on trying to open up international markets that may or may not work, which need to be negotiated with enough countries to make it worthwhile, and which may take years to come on stream.

What if we just can’t achieve that international agreement in the next few years while giving ourselves enough time to get our emissions on the required track for 2030? Well, that will mean a much harder change in the late 2020s as we scramble to hit the target. Does anyone want that?

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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53 Comments

Agricultural emissions - net of the CO2 absorbed by the grass and crop lands in their production - are roughly half the published and agreed figures thanks to then Minister Nick Smith.

It seems incredible that we are even contemplating additional borrowing offshore as we are already running current account deficits to purchase credits for emissions that simply don't exist at the published figures.

We can be fairly confident that the carbon cycle is still in operation - and while that remains the case - our scientifically measured agricultural emissions will remain at roughly half the published figures.

Not such a big issue after all.

Only a government could contemplate borrowing under this scenario.

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11

Trump was right - ditch Paris. We apparently could be sending 1.4 BILLION offshore as a result of the Paris agreement. Nuts. It has been compared to paying poor people to diet for you. The New Zealand international negotiators own goal yet again.
We would be better retaining that cash in New Zealand -probably even get a better carbon result using it here.

I would say the heifer in the room is our burgeoning population (800 extra cars a week on the road in Auckland alone) and all the extra infrastructure they need (concrete accounts for 5% of total global emissions).

As for agriculture, it is a red herring. If we reduced our output of product, it would just be produced less efficiently elsewhere raising total global emissions.

Check out the Livestock Numbers NZ from 1972 – 2015 - Bugger all increase in 40 years

http://www.stats.govt.nz/browse_for_stats/environment/environmental-repo...

And there have been a lot of advances in efficiency in that time meaning emissions per unit of food produced have declined - by about 20% since 1990.

Cows! Cattle numbers have increased 69.9% since the 1990's.

Used to have 70 million sheep, now 23 million.

Agree. It is stupid, because these employers are calling out for workers, which the government is using as a reason to increase immigration. However many of these jobs appear to be low wage positions. NZers don't really want them, because they don't pay enough to actually live on and live a decent lifestyle. Then there was an article that if these companies want NZers working for them, they will need to pay more.

KH,

Trump is right on Paris. Are you serious? The Paris Agreement does not force our government to spend/waste $1.40bn a year on buying overseas credits. We could and should be concentrating on reducing our own carbon emissions,unless of course,like Trump,you believe that Global Warming is a Chinese hoax.
If so,I would be fascinated to know what you think other than heat, causes ice to melt.

"If so,I would be fascinated to know what you think other than heat, causes ice to melt."

Pressure.

Anyone who has an open mind and an interest in climate theory should put some time aside - dust off some physics ( Not essential ) and have a quiet read of the following paper:

http://www.ilovemycarbondioxide.com/pdf/Understanding_the_Atmosphere_Eff...

I think you will agree it would be very foolish to accept current thinking on this issue after reading the above.

Ice can melt driven by changes to earth's albedo - pollution can alter this. It can also settle on the ice, absorb energy and cause incremental melting.

Both anthropogenic - just not CO2.

Hey KH,

No one said global warming is a hoax. The planet has warmed and cooled throughout its history. The questions is are man made pollutants causing that process to speed up. Despite what you've been force feed, the evidence is far from conclusive.

The latest research using NASA's data has showed the so called 'greenhouse gasses' aren not the reason the planet retains heat. The data shows, and this held true across all planets they looked at, that it is atmospheric pressure that holds the heat. Nothing to do with greenhouse gasses, the most common of which is water vapor!

I thought that the only people who continued to believe that greenhouse gases do not warm the atmosphere were over 70 years old and lived in US states that still mine coal.Looks like I was wrong.
An alternative hypothesis for why there has been a sudden upswing in global surface temperature would make for some amusing reading.

Quite wrong SimonP - there hasn't been a sudden upswing in warming. It is just boring interglacial warming and virtue signalling do-gooders. Warming rate 1910-1940 was 0.15/decade. The satellite era is 0.12/dec.

The question is how much money should we spend to achieve absolutely nothing and how many old people should be killed globally via energy poverty to achieve this nothing.

http://www.nsstc.uah.edu/climate/2017/june/GTR_june2017.pdf
http://news.bbc.co.uk/1/hi/8511670.stm

Let's check your figures:
GISTEMP rate for 1910-1940 was 0.102 ±0.053 °C/decade (2σ)
RSS lower troposphere rate for 1980-2017 is 0.184 ±0.063 °C/decade (2σ)
UAH v6 lower troposphere rate for 1980-2017 is 0.125 ±0.061 °C/decade (2σ)
GISTEMP rate for 1980-2017 is 0.177 ±0.041 °C/decade (2σ)
HadCRUT4 rate for 1980-2017 is 0.176 ±0.039 °C/decade (2σ)
These rates of warming are unprecedented in the paleo-climatic temperature record.

My linked data checks out just fine. Phil Jones head of the UEA CRU:

"1860-1880 0.16/dec
1910-1940 0.15/dec
1975-1998 0.16/dec
1985-2009 0.16/dec

"So, in answer to the question, the warming rates for all 4 periods are similar and not statistically significantly different from each other."

From UAH satellite data which you also quote - from my other link. "Global climate trend since Nov. 16, 1978: +0.12 C per decade".

"Southern Hemisphere: +0.09 C (about 0.16 degrees Fahrenheit) above 30-year average for June." Whoa runaway!

Where is your runaway warming? It is no different to pre WW2 when anthro emissions were a fraction what they are now. What a weak hypothesis.

You are cherry-picking start and end points to support your contention. That is not how science works. https://xkcd.com/1732/ puts things in perspective.

Roger Harrison highlighted the warming periods not me. Phil Jones (scientist who knows how it works...) didn't have a problem with them. Sorry that you do. Just highlights how weak the hypothesis is. Xkcd cartoon is not matched by the satellite data or Phil Jones for starters You will need more than that to explain why it was warming faster pre ww2 with much lower antro co2 emissions. 30% of antro co2 emitted since 2000 so would expect to see warming rates higher than 1860 showing up.

Do you realise that satellites measure irradiance in the troposphere not actual surface temperature? You are comparing apples with oranges. Remember too that some weather cycles can be decadal in nature.

Simon if readers can't accept our greenhouse gases are driving the rapid increase in global warming then they don't believe in science. They have buried their heads in the sand or other place the sun don't shine.

Tim Tam - I think that perhaps your statements are more reflective of psychology than the sciences.

Yeah didn't think you would take a stab at the pre-WW2 warming. And entirely predicable would try the satellite data no good meme even though you were happy to quote satellite data above. And then some goal post shift decadal cycles. Surely CO2 runaway warming would be drowning out decadal cycles by now or at least showing up in the satellite record.

Linklater. I did not question climate change itself, just Paris and dollars. so your question is misdirected.

Why do you think concentrating on reducing our own carbon emissions is preferable to buying overseas credits?

The environment does not care where carbon emissions are emitted, and it does not care where they are reduced. Emitting carbon does as much to contribute to climate change, and reducing emissions does as much to address climate change, wherever it actually happens. There is no environmental advantage to reducing carbon emissions from New Zealand rather than reducing them from somewhere else.

If the same amount of money will buy more carbon reduction overseas than it would if it were spent in new Zealand, then buying overseas credits is a better use of that money.

None of this is new...has just been off radar, but is typical National. Kick the can down the road for the next generation of tax payers. Another dairy subsidy to boot. We signed up to it and Nat has no plan on how to meet it.

I'll now sit back and watch the defenders of Nat defend it by decrying the scheme - complelty overlooking the fact we signed up and are committed.

Paris is non binding. Just weapons grade virtue signalling.

The only potential own-goal here for NZ is to give up our existing advantages such as 80% renewable electricity, a generally pristine natural environment, and generations of accumulated IP in agriculture by putting our head in the sand. Penalties of $1.4 billion could just be the tip of the iceberg in future.

Our head is already in the sand regarding the absence of a joined up government policy around sustainable transport (EVs, rail); linkages between migration, housing, infrastructure and pollution; the real impact of industrialised dairy farming; forestry; and of course an ignorant belief that we are too small to matter.

We will find ourselves on the wrong side of history and the wrong side of the ledger if we think everyone admires us, everything here is already awesome (thanks Hosking), and that countries like China won't one day be better than us at generating renewable energy, reducing emissions and growing food.

China is already the world leader in solar energy and is rapidly converting its vehicle fleet to EVs (do a web search). Who would have foreseen that a mere 10 years ago at the time of the Beijing Olympics?!

This 'China' would be the China that CoalTracker notes has 922,062 Mw over 2,803 operating coal plants as at July 2017 and a further 147,143 Mw over 282 plants under construction, plus 152,775 Mw over 301 plants in the throes of consent processes? See http://endcoal.org/wp-content/uploads/2017/07/PDFs-for-GCPT-July-2017-Co... for the MW and http://endcoal.org/wp-content/uploads/2017/07/PDFs-for-GCPT-July-2017-Co... for the units.

Pigs, and the application of beauty products thereto, swim past my aging vision....or are they Flying?

Their proportion of produced energy coming from renewable sources seems to have increased from ~17% 10 years ago, to 20% 5 years ago, to 25% now. Yes coal is still growing but renewables are apparently growing faster. Any stats on how many of those coal plants are replacing old coal units?

https://en.wikipedia.org/wiki/Renewable_energy_in_China
https://blog.energybrainpool.com/en/power-statistics-china-2016-huge-gro...

Don't mistake me for being some kind of China Apologist, but your use of statistics kind of reinforces my point - here is an authoritarian, developing country that will rapidly overtake us in green energy.

Meanwhile we pretend we haven't signed an international agreement that will affect our competitiveness and may result in penalties if we are particularly stupid/lazy, and so-called world leaders such as the US are running backwards as quickly as they can apparently wanting to pursue investment in he 19th Century's best energy source in the 21st Century.

I think I know which approach will be more rewarding in the next 20 years, so let's not be blinded by complacency or historical favoritism.

https://www.nytimes.com/2017/01/15/world/asia/china-gansu-wind-farm.html...

"It Can Power a Small Nation. But This Wind Farm in China Is Mostly Idle"

Fantastic, they can increase the proportion even more just with a better distribution network. Lower than expected electricity demand also seems like an environmental win.

MFD - the other point you are missing is that you are mixing/confusing ENERGY consumption with ELECTRICITY production. Quite different result. The 25% figure quoted (is for electricity production only... ) ... not for energy consumption. The consumption figures are far lower. eg
https://notalotofpeopleknowthat.files.wordpress.com/2016/06/image_thumb5...

exactly right Larry. Best we spend the $1.4 billion here on system improvement and get it right, than wave $1.4 Billion away over the water in penalties.

Just have less kids.

Most of the educated nations of our world have tried that are are still doing so, but the business classes and their politician puppets just bring in evermore migrants.

.. and that increases the population of the world as a whole somehow ?

It certainly raises the total carbon emissions of humanity, as a migrant from a low per capita emitting country raises their emissions to the level of the country they migrate to.

yes , migrants to Norway are a particular problem.

Paasha asked, "and that increases the population of the world as a whole somehow?"
Of course. 1. Easing of pressures in over populated countries reduces a need for population controls in such places. 2. The battle for survival in over populated countries that encourages a high death rate does not apply in NZ so more children can survive untill we too become over populated. 3. Certainly a good proportion of incoming migrants do bring attitudes that larger families are best. 4. Some religions encourage their indoctrinated masses to have more children, almost certainly because it adds to their power base. For example Recip Erdogan calls on Muslims in Europe to have 5 children. In an over populated world that is a crime against humanity.
http://www.telegraph.co.uk/news/2017/03/17/erdogan-calls-turkish-familie...

Your points 3-4 are particularly obviously false.
People's ( and their children's ) attitudes undergo profound changes following migration.That includes religious attitudes.

Fact - migrants to the "rich world" on average have fewer children and grandchildren compared to their siblings who stayed put ( one exception is China - but for the simple reason that comparatively few Chinese children are born per woman , anywhere ).

Rather creatively your posts manage to combine 2 entirely distinct unhealthy obsessions ( with immigration and climate change / overpopulation ) . Full points.

Reading some of these posts: Honestly I never realized there were so many climate experts out there.
Climate change is by far the biggest gamble the human race has ever taken. None of us want climate change to be true, but our feelings on the matter unfortunately doesn't effect whether or not it is true.
I hope we can all agree that there is at least a decent chance that this is happening and we are causing it. Shouldn't we at least play things safe and not be so money grabbing for once. We owe our grandchildren at least that much.

Yes

No - we should not be forgoing trillions of dollars ( in direct and opportunity costs ) just because it might just be happening and might be human-made ; we should base decisions of this scale on sound science that is still sadly lacking.

Martians might exist and be preparing for full out attack as we speak - do we not owe our grandchildren to build a defense system to repel them ?

"sound science that is still sadly lacking" Says who?

At the Paris climate deal, nearly every country in the world signed a deal which said they accepted that climate change was real and most likely human made.....................but wait! There is a guy in a chat room in New Zealand who disagrees!

At some point it time the rest of us just have to move on.

I guess that was a bit like the guy called Dirac that postulated the existence of antimatter.

Or a guy called Einstein that postulated that space was curved and that the moon did in fact move in a straight line.

When you hear the science is settled - the it's not science. Science is never settled.

The fact that all countries signed up to Paris means nothing - science evolves and today there are huge numbers of very competent scientists whose job does not depend on the global warm hypothesis - who believe that any warning trend is a purely natural process(s).

Meanwhile, their are plenty of reasons for mankind to modify its behaviour, climate change is not the only threat to the planet. Actually, if you look at the thing as a whole there is only one real threat and all you need to confirm that is a mirror.

Great point. Once you get your studies peer reviewed and accepted by the majority and part of scientific consensus, I'm all ears. Until that point, I might play it safe with my grandchildren's future.

I am so glad my grandparents protected me from peak horse manure and peak whale oil. Their foresight was incredible.

Even if you accept the "science" behind Paris ( and many - not just this guy in a chat room - do not ) the agreement itself is just a meaningless political fudge - a kind of gold plated placebo pill. It does not come even close to mitigating the projected effects of expected emissions , based on the models the promoters of the agreement themselves put forward.

I am no fan of Trump but he surely made the right call on this. Face it - Paris agreement is unraveling . Good riddance I say - NZ should jump off that sinking ship.

I think the homo sapien species will destroy themselves and become extinct long before climate change makes any impact.

And we would have the dubious honour of being the only species to orchestrate its own demise

Believing the financials of the deal NZ made in Paris is dumb, does not imply anything about belief about climate change. New Zealand could ditch Paris, and still do magnificently in carbon reduction.