Thursday, 17 December 2015

On the road to climate progress, “We’ll always have Paris.”

by Catherine Leining, Motu Economic and Public Policy Research Trust

This week, 195 countries reached the Paris Agreement under the United Nations Framework Convention on Climate Change.  It breaks new ground by bringing developed and developing countries under a common legal framework for achieving “nationally determined contributions” (NDCs) toward reducing greenhouse gas emissions. Detailed rules will require further negotiation, but for New Zealand, the agreement ticks some critical boxes, notably:
  • collective effort toward meeting the global temperature goal, 
  • reporting provisions that support transparency, 
  • the options to use forestry and carbon markets to deliver upon NDCs, and 
  • acknowledgment of the need for food security.  
Achieving this outcome took years of preparation culminating in two weeks of highly intense negotiations.  In the spirit of dramatic but happy endings with a twist, this post highlights key features and policy implications of the new agreement – framed by classic quotes from “Casablanca.”

“Play it again, Sam.”
The Paris Agreement builds on many precedents, extending beyond the scope of the Kyoto Protocol and reflecting outcomes from key conferences in Copenhagen (2009), Cancun (2010), Durban (2011) and Doha (2012). Its 12 pages cover the traditional suite of core issues and are complemented by a series of decisions to help give effect to the agreement and initiate more detailed rule-making. Among these decisions, Parties acknowledge the efforts to address climate change by non-government actors and the value of providing emission-reduction incentives through domestic policies and carbon pricing.

Of course, "Play it again, Sam" is not what Ingrid Bergman actually says, but it is the quote everyone remembers. In 2030, how will people remember the Paris Agreement?

“The fundamental things apply, as time goes by.”
The Paris Agreement defines three important aims:
  1. Limiting temperature increases to “well below” 2 degrees C above pre-industrial levels, and pursuing efforts to achieve a 1.5 degree C limit,
  2. Increasing the ability to adapt to climate change and foster climate resilience and low-emissions development without threatening food production, and
  3. Making financial flows consistent with a pathway toward low-emission and climate-resilient development. 
Attempts to strengthen the global temperature goal fell short of some Parties’ hopes. Significantly for New Zealand, no sectors have been excluded from mitigation targets and forest conservation and enhancement are encouraged.

“Will I see you tonight?”  “I never make plans that far ahead.” 
The Paris Agreement establishes processes for ratcheting up mitigation ambition over time. Parties will be required to put forward progressively more ambitious NDCs every five years. Developed countries must include economy-wide absolute emission reduction targets, whereas developing countries have the flexibility to transition toward that form of target over time. The agreement provides for a “global stocktake” of progress and goals every five years starting in 2023.

The agreement also encourages all Parties to develop “long-term low greenhouse gas emission development strategies” by 2020. New Zealand could take up this invitation, creating collaborative processes designed to harness expertise, exchange sectoral perspectives and build cross-party support for the outcome.  Over the past two years, Motu’s Low-Emission Future Dialogue has identified a range of potential transitional pathways and stakeholder processes that could be useful for this effort.

 “Last night we said a great many things.”
The aspirational goals of the agreement have not (yet) been matched by countries’ mitigation targets.  Collectively, countries’ intended NDCs tabled to date would align with a pathway to 2.7 degrees C.  In the supporting decisions, Parties identify a mitigation gap of 15 gigatonnes of GHG reductions needed by 2030 to stay on track for 2 degrees C.

While the Paris Agreement will be legally binding, countries’ NDCs themselves sit outside of the agreement and will be enforced through national legislation or policy. This was a requirement for ratification by some countries (notably the United States). The consequences for non-compliance with the Paris Agreement will be facilitative, not punitive. As a result, whether countries actually deliver on their NDCs will depend on domestic political will and international peer pressure. In New Zealand’s case, the NDC is not inscribed in legislation, and it will be interesting to see how the government reflects the obligation in the budget.

To help increase mitigation ambition pre-2020, Parties have encouraged voluntary cancellation of surplus Kyoto units by both Parties and non-Party stakeholders.  Five EU countries set an example by cancelling 635 million Kyoto units.  Other countries, including New Zealand, are relying heavily on surplus units from the first Kyoto commitment period to help meet their 2020 targets.

“Louis, I think this is the beginning of a beautiful friendship.”
Couched in language about "voluntary cooperation" through the use of "internationally transferred mitigation outcomes," Article 6 opens the door to using carbon markets with international emissions trading to help countries meet their NDCs.  The agreement also provides for development of a new mechanism to contribute to mitigation and sustainable development.  Reductions:
  • must be independently verified, 
  • cannot be double-counted across NDCs, 
  • must be additional to what would happen otherwise, and 
  • must deliver “an overall mitigation in global emissions.” 
A share of proceeds from transactions will cover administration and support vulnerable countries with adaptation.  Both public and private entities can participate. What this means in practice will depend on future rules.

Article 6 offers important opportunities for New Zealand to help achieve part of its NDC through overseas mitigation at lower cost through international linkages with the New Zealand Emissions Trading Scheme (NZ ETS) and participation in the new international market mechanism.  New Zealand led a Ministerial Declaration on Carbon Markets in which 17 additional countries pledged to support development of standards and guidelines to ensure the environmental integrity international market mechanisms used to support NDCs.  The government’s upcoming review of the NZ ETS will need to account for both the opportunities and uncertainties around the treatment of carbon markets in the Paris Agreement.

“If that plane leaves the ground and you’re not with him, you’ll regret it. Maybe not today. Maybe not tomorrow, but soon and for the rest of your life.”
An important new global agreement has taken flight, and whatever its shortcomings, 195 countries are on board.  Under current targets, the Paris Agreement will not deliver a safe climate.  However, its framework opens the door to that outcome – if people rise to the challenge. This will require mitigation actions by governments, businesses and households amounting to more than a “hill of beans in this crazy world.”  Future generations deserve no less.

“Here’s looking at you, kid.”

Friday, 11 December 2015

Assessing cost and creating pathways

By Catherine Leining, Policy Fellow, Motu Economic and Public Policy Research

As COP21 enters its final hours, I want to look at how New Zealand can progress our climate change ambitions by looking at assessing costs and creating a domestic pathway towards zero-net emissions.

This is the third and final part of my discussion about the sort of effort New Zealand should make in relation to climate change. The first was setting targets top-down versus bottom up, while the second looked at choosing the balance between domestic and global contributions and assessing fairness.

In its Fifth Assessment Report, the IPCC framed the global challenge very clearly. To limit temperature rises below two degrees Celsius, we need to achieve zero-net emissions by the end of the century AND get there fast enough to keep cumulative emissions below a ceiling which the world will exceed by 2035 under business as usual. This means that emissions that cannot be avoided are fully offset by removals through forest sinks, carbon capture and storage, or other means. Getting to net zero smarter and faster means a much, much better world for the rising generations. It is a powerful choice to make, and one that is still available to us.

Thursday, 10 December 2015

Choosing a balance and assessing fairness

By Catherine Leining, Policy Fellow, Motu Economic and Public Policy Research

In Paris, the 21st session of the Conference of Parties to the UN Framework on Climate Change includes about 40,000 participants, including 25,000 official delegates, from nearly 200 countries. Two of the sticking points under discussion in the closing days of the conference relate to how much countries should be able to invest in mitigation overseas to help meet their own targets, and how to assess the fairness of countries' overall contributions to reducing global emissions and limiting temperature increases. Both of these issues are important to New Zealand.

This is the second part of my discussion of what this country needs to consider for a low-emission future. The first was about setting targets top-down versus bottom up and a look at assessing costs and creating a domestic pathway toward zero-net emissions will be coming soon.

Tuesday, 1 December 2015

How much effort should New Zealand make on climate change?

By Catherine Leining

From 30 November to 11 December 2015, governments will meet in Paris to resolve the framework for a new international climate change agreement to take effect from 2020.  New Zealand is bringing to the table an emission reduction pledge - or Intended Nationally Determined Contribution (INDC) - of 11% below 1990 emissions, or 30% below 2005 emissions, by 2030, conditional on rules for forestry accounting and use of carbon markets.

As New Zealand shapes its contribution to global mitigation, it needs to consider five factors: 

  • setting targets top-down versus bottom up; 
  • choosing the balance between domestic and global contributions; 
  • assessing fairness; 
  • assessing costs; and 
  • creating a domestic pathway toward zero-net emissions. 

In this post I will examine the first factor.

Wednesday, 25 November 2015

Where can households make a difference to their emissions?

by Ceridwyn Roberts, Motu Economic and Public Policy Research

Motu has just released new research identifying where households can make a real difference to their greenhouse gas emissions – and cutting down on red meat and purchasing an electric vehicle are top of the list.

Corey Allan, Suzi Kerr and Campbell Will looked at information from the 2006/7 and 2012/13 Household Economic Surveys1 and found many opportunities for ordinary Kiwis to reduce their impact on climate change.

While most households are taking at least some actions that reduce emissions, the actions they are choosing are not necessarily the ones that will have the biggest emission benefits. To give the general public more information about what sources of emissions have the most impact, Suzi and Corey worked with ChewyData and the NZ Herald to compile The Household Climate Action Tool, hosted by NZ Herald Insights. This uses averages of annual spending and household purchases to help people figure out their household’s best choices to reduce emissions.

Monday, 2 November 2015

Clearing the air on methane

by Zack Dorner

Agricultural emissions, caused in part by lots of cows and sheep burping, are responsible for around half of all of New Zealand’s greenhouse gas emissions. New Zealand faces “unusually high costs to cut greenhouse gas emissions” due to the large number of livestock in the country, or so the government is continuing to argue. With Suzi Kerr, I’ve just released a Motu Working Paper looking at methane emissions from NZ agriculture, which comprise 30% of NZ’s agricultural emissions (with 18% being from nitrous oxide), so it seems timely to look at some of the issues regarding methane, and hopefully clear the air on this confusing and complicated topic!

Thursday, 24 September 2015

The virtue of sunlight

Guest Post by Adrian Macey, Senior Associate, Institutefor Governance and Policy Studies, Adjunct Professor, New Zealand Climate Change Research Centre, Victoria University of Wellington, Vice Chair then Chair, UN Kyoto Protocol negotiations 2010-2011, New Zealand Climate Change Ambassador 2006-2010, Chief Trade Negotiator 2000-2002.

Among the many challenges climate change policy in New Zealand faces is knowing the costs and benefits of alternative pathways to a low carbon economy. The need to contribute a fair share of the international effort on climate mitigation adds a dimension that will be at the fore during the Paris climate conference in December (COP 21). 

Many factors can be taken into account in assessing transitions and contributions, but economic analysis and modelling (e.g. of mitigation potential, effects on households, on sectors, on GDP) are essential. 

The New Zealand Treasury advocates a simple burden-sharing principle for the international contribution: equal percentage GDP costs. In the government’s consultation preceding the announcement of the 2030 target and “INDC” (the international contribution) there were assertions about the relative cost of our contribution against those of the US and the EU. But neither these assertions nor the absolute cost figures were accompanied by any information with which to verify them. The full set of assumptions was not shown. Any benefits were excluded from the calculations. There was also a curious and unexplained decision to exclude forestry and agriculture from the figures (see below). 

Tuesday, 15 September 2015

Calculating the size of the bank

By Judd Ormsby and Suzi Kerr

From the 1st of June this year NZ ETS participants have been able to surrender only NZUs or NZ AAUs. NZ AAUs are units designed for NZ to meet Kyoto commitments. Prior to June participants could also surrender international Kyoto units (such as CERs and ERUs). Since November 2012 participants have surrendered almost exclusively cheap international units but many have received free allocation of NZUs which they have saved for future use. A natural question to ask is ‘how many NZ AAUs and NZUs are there in private holdings?’ We refer to this as the NZ ETS bank, or the bank for short. The size of the bank affects prices in the NZ ETS (we have previously blogged about our own simple modelling – here and here).  It will also affect how many NZUs the government may want to auction for use in the ETS in coming years, and hence how much revenue the NZ ETS could generate.

From the NZ EUR registry, we can see details about allocations and surrender over time, up until December 2014. While the website doesn’t explicitly list the size of the bank, we can get a good estimate of what it was at the end of last year by calculating the number of units that have entered private holdings and then subtracting the number of units that have since left private holdings.

Friday, 4 September 2015

Getting to the root of the problem with Kyoto Emission Reduction Units: Low mitigation ambition

By Catherine Leining, Policy Fellow at Motu Economic and Public Policy Research

In late August 2015, the Stockholm Environment Institute (SEI) released a study, accompanied by a letter in Nature Climate Change, reporting that 80% of the Kyoto Emission Reduction Units (ERUs) used by developed countries to help meet their climate change targets for 2008-2012 came from Joint Implementation (JI) projects with “questionable or low environmental integrity.” The authors concluded that JI may have contributed to increasing global emissions by 600 million tonnes of carbon dioxide equivalent compared to what would have happened otherwise. According to the Guardian, UN officials have confirmed the findings.

Some commentators have used these findings to call into question the use of international emission trading to help meet future emission reduction commitments, an issue that will be negotiated in Paris later this year. In this context, it’s important to recognise the fundamental role that weak national mitigation targets played in producing this outcome.

Tuesday, 25 August 2015

"Free" units that benefit big business are not the issue

By Suzi Kerr, Senior Fellow, Motu Economic and Public Policy Research.

Radio NZ is reporting that various big kiwi businesses received millions of dollars worth of emissions credits from the Government. In our opinion, this is not the biggest issue for the NZ ETS going forward, though there are compelling reasons why this free allocation should phase out faster.

Two issues that are key for New Zealand are the overall ambition of our ETS, which drives price, and controls on the quality of units surrendered in our system when we re-connect to international markets. This is clear in recent reports from the Environmental Protection Agency.

During the 1 July 2014 – 30 June 2015 year, New Zealand firms surrendered 32 million emissions units, the vast majority of which they had purchased. If they had paid current NZ prices for those units, emissions would have cost them (and their consumers) around $189 million.  If prices were at the 'social cost of carbon' those units would have been worth more than $1.5 billion.  That would send a real economic signal.  The problem is not the system but the level of the price.

Tuesday, 4 August 2015

From Sea to Shining Sea: US Cap-and-trade Programs Showing Success on Both Coasts

By Katie Hsia-Kiung, High Meadows Research Fellow, US Climate and Energy Program, Environmental Defense Fund

When the preliminary plans for California’s cap-and-trade program were first introduced in 2010, it was quickly regarded as a groundbreaking policy due to its stringency, size, and scope. California was the ninth largest economy in the world – it has now jumped to eighth – and the Golden State’s program would soon implement the first economy-wide cap on greenhouse gas pollution in the country. But, it was not the first cap-and-trade program in the United States. In fact, ten states in the northeast had implemented the Regional Greenhouse Gas Initiative (RGGI) in 2008. Like California’s program, the RGGI system places a mandatory cap on greenhouse gas emissions and sets a corresponding price on carbon, but covering only the electricity sector. Despite the difference in scope and location of these two programs, they are both demonstrating that carbon pricing through cap-and-trade is an effective way to decrease harmful greenhouse gas pollution while allowing the economy to grow.

Thursday, 23 July 2015

Farm's nutrient run-off management leads to national award

John and Catherine Ford from Rotorua are the proud winners of the National Ballance Farm Environment Award this year, the first North Island and first sheep and cattle property to achieve that honour.

The Fords own the 1240ha Highlands Station, a hill-country farm sitting within the Lake Tarawera and Rotokakahi catchments and covered in phosphate-rich mud. The Fords say the careful and responsible management of nutrient runoff is one of the most critical farm issues to get right. They have a network of almost 200 retention dams that reduce runoff and scouring during heavy rainfall.

Last year the farm's scheme was tested by the biggest rainfall in 10 years. The dams held the water in the upper catchments and were effective in retaining water and reducing sediment loss.

John was a very active participant in Motu’s AgDialogue group and prior to that in the Lake Rotorua Dialogue group. He stars in the water quality films made in 2012 about the complexities of the Lake Rotorua catchment.

Part of the prize is a study trip overseas. The Fords are considering looking at some sensitive catchments in North America such as Wisconsin and the Chesapeake Bay or Great Lakes catchments.

Wednesday, 22 July 2015

Beyond Flying: Rethinking air travel in a globally connected world (a review)

What might a low-emission future mean for how we travel by air?  

This post presents a review of the book Beyond Flying: Rethinking air travel in a globally connected world, which was edited by New Zealander Chris Watson and published by Green Books in 2014.  The review, written by Rose Bridger, was first published in The Ecologist and is reprinted here with permission.

Beyond Flying brings together contributions from 14 people who drastically cut flying, or stopped altogether.

They made this commitment because flying is one of the fastest growing sources of climate disrupting greenhouse gas emissions. A single flight cancels out lifestyle efforts such as plant based diets, energy efficient homes and recycling.

In recounting experiences of undertaking long intercontinental journeys, and running businesses which require international communication, the book is an antidote to travel journalism which has no regard to the impacts of flying.

Wednesday, 8 July 2015

New Zealand’s 2030 climate change target: We can do better

By Catherine Leining, Policy Fellow, Motu Economic and Public Policy Research

On 7 July 2015, the New Zealand government tabled its Intended Nationally Determined Contribution (INDC) to global mitigation effort for the period post-2020.  It has pledged an emission reduction target of 30% below 2005 levels by 2030 (equivalent to 11% below 1990 levels by 2030), contingent on the rules for land-sector accounting and access to carbon markets. 

The government has not yet specified an emission budget for the period from 2021 through 2030. 

New Zealand’s proposal falls short of the global ambition needed to deliver the agreed two-degree temperature goal at least cost: countries should reduce their emissions by 40-70% below 2010 levels by 2050 on the way to a zero-net-emission global economy by the end of the century.  It also falls short of the targets recommended by a strong majority of submitters during the government’s recent consultation process (as shown in the summary of submissions). 

The proposal falls within the target range which the government had pledged conditionally in Copenhagen in 2009 – a reduction of 10-20% below 1990 levels by 2020 – but a decade appears to have slipped through the cracks.  The government’s rationale is that because we already have a high level of renewable electricity generation and biological emissions from agriculture contribute to almost half of our emission profile, we lack cost-effective domestic mitigation opportunities.

Ironically, the government’s announcement occurred on the same day when the Global Commission on the Economy and Climate released its latest report identifying ten key opportunities for climate action that would generate economic benefits and deliver up to 96% of the global emission reductions needed by 2030 to keep the world on a two-degree pathway.  The list is practical, energising and relevant to New Zealand:
  1. Accelerate low-carbon development in the world’s cities
  2. Restore and protect agricultural and forest landscapes, and increase agricultural productivity
  3. Invest at least US$1 trillion a year in clean energy
  4. Raise energy efficiency standards to the global best
  5. Implement effective carbon pricing
  6. Ensure new infrastructure is climate-smart
  7. Galvanise low-carbon innovation
  8. Drive low-carbon growth through business and investor action
  9. Raise ambition to reduce international aviation and maritime emissions
  10. Phase down the use of hydrofluorocarbons (HFCs).
These recommendations highlight the shortcomings of the government’s announcement. 

What’s missing from the government’s INDC is a firm commitment backed by policy to decarbonise the New Zealand economy in line with global effort to limit temperature rises below two degrees. 

What’s missing is a bold call for collaboration across government, business and civil society to deliver transformational low-carbon innovation with broader benefits for our economy, and to help other countries to do the same. 

Instead, the announcement suggests heavy reliance on overseas carbon markets until technology improvements in agriculture and transport become more widely available sometime after 2030.  It provides no policy direction to inspire and guide business investment.  It also fails to address the significant increase in net forestry emissions projected during the target period. 

According to the Ministry for the Environment, compliance with New Zealand’s 2020 target will be achieved with “no change to existing policy settings” and “at no additional costs on households, businesses or government” primarily through forestry activities and surplus units acquired through the carbon market.  However, this continuation of business as usual domestically through and beyond 2030 will not prepare the New Zealand economy to thrive competitively under increasingly stringent global carbon constraints.

While the INDC defines the lowest level of commitment the government is prepared to make, it fortunately does not limit what we can actually do as a country.  The government has pledged further consultation on its longer-term mitigation policies.  Hopefully, this INDC can be used as the launching point for more in-depth, cross-stakeholder discussions on why and how New Zealand should shift strategically toward a low-emission economy. 

Monday, 15 June 2015

A call for ideas on the kind of a low-emission future we want, and actions we can take to make it happen

This is an open letter by nine authors participating in Motu's Low-Emission Future Dialogue. It originally appeared on, here, and has been cross-posted with permission.

Dealing with climate change is difficult, there is no denying that.

Thankfully as a nation we have moved past denying climate change itself. Now we are debating the best way to deal with it. That much is progress.

The contributors to this article are part of a group of people that meets regularly to discuss climate change and how we might deal with it as businesses, academics, non-government organisations and individuals.

We don’t always agree on what needs to be done, but we do agree that climate change is a huge issue that will shape the future of our nation.

Monday, 25 May 2015

Reframing the costs of smart climate action

By Catherine Leining, Policy Fellow, Motu Economic and Public Policy Research

According to a recent survey, 87% of New Zealanders have at least some level of concern about the impacts of climate change on society.  The government is currently consulting on how we want to translate climate concern into a target for reducing New Zealand’s emissions after 2020.

Rather than offering mitigation proposals, the government’s discussion document addresses the national context for setting a target and has a strong focus on the costs that accompany ambition.  But looking at the underlying modelling by Infometrics  and Landcare Research reveals more about the cost story in the discussion document than first meets the eye.  It also highlights the importance of discussing pathways alongside targets.

First, the modelling excludes important mitigation opportunities and benefits for New Zealand.  The authors of both studies are transparent about the limitations of their methodology (although these are not explicit in the discussion document).  For example, they exclude mitigation from the forestry sector, the potential for transformational technology changes (e.g. electric vehicles and improved batteries), and the value to society of co-benefits to human health, the environment and New Zealand’s international standing (e.g. clean-green branding) as well as avoided climate change impacts.

MfE releases NZ ETS modelling work, validates our simple model.

By Suzi Kerr and Judd Ormsby, Motu Economic and Public Policy Research

Last week we posted twice on modelling work we have done. The first post looked at what sort of carbon price we might need to achieve domestic reductions of 5% below 1990 BAU. The second post looked at how linking can make achieving this target easier.

Since then the Ministry for the Environment has released both pieces of ETS modelling work they commissioned. The modelling they referred to in their discussion document was done by Infometrics, but they have also released modelling work by Landcare Research.

Thursday, 21 May 2015

Linking to credible sellers - de-linking ambition and ETS prices

By Suzi Kerr and Judd Ormsby, Motu Economic and Public Policy Research

In our last post we showed how even an emission reduction target of 5 per cent below 1990 levels could require a GHG price in excess of NZ$250 by 2030 if the New Zealand Emissions Trading Scheme (NZ ETS) were New Zealand’s only significant climate policy (However, the global price required to limit global warming to 2 degrees could be as low as NZ$60 by 2030[1]. This is because the global least cost approach to limiting atmospheric concentrations of CO2 equivalent gases to 450 ppm – roughly the level that achieves a 2 degree target – requires about 66 per cent of (discounted) abatement effort out to 2100 to occur in developing countries (Edmonds et al. 2007).

Linking is not a substitute for domestic emission reductions but allows us to do even more for the global effort and helps manage the uncertainty around short-term mitigation potential within New Zealand that could stop us taking ambitious short term targets.

Monday, 18 May 2015

We are not on track... yet

By Suzi Kerr and Judd Ormsby, Motu Economic and Public Policy Research

Submissions on New Zealand’s post-2020 climate change contributions have opened, but an immediate question for any proposed target is: can we achieve it?

Right now, the price of a unit in the New Zealand Emissions Trading Scheme (NZ ETS) is $6 per ton. Our simple model of what would happen to this market if the Government’s unconditional target of 5 percent below 1990 levels by 2020 were imposed as a cap on the sectors in the ETS with no complementary actions sees the price starting at $110 and reaching more than $250 by 2033.

Our modelling work on the NZ ETS was presented at the WEAI conference in January and the AARES conference in February. Now seems an appropriate time to share some of our findings.

Every model has inputs and outputs. We model the ETS as though it were a simple cap on total emissions (not including methane and nitrous oxide from agriculture), followed by trade. Our model is simple. It includes demand and supply for New Zealand Units (NZUs) in each year, the units people have been banking for future use, any linking arrangements we might have, and a (risk-adjusted) interest rate. The model’s outputs are an NZU price path, an emissions path, and a path of the NZU bank associated with these inputs.

Given the level of ambition of the government’s emissions targets, the price starts at around $110, rises at 5% per year (the rate of interest in the model) until reaching about $264 in 2033. This high price reflects the difficulty of achieving such a target within the NZ ETS and without international linking, which we lose at the end of this month. It is driven by a high level of business as usual emissions - because emissions have grown so much since 1990, a 5% cut relative to that involves a much larger cut relative to current emissions – and a low level of estimated (from others’ models) responsiveness to emissions prices. Responsiveness could probably be increased with complementary policies.  

Figure 1: The modelled price path of NZUs.

Friday, 15 May 2015

Majority of New Zealanders are concerned about climate change and taking actions that reduce emissions

By Catherine Leining, Policy Fellow, Motu Economic and Public Policy Research

The following media release was issued by Motu on 15 May 2015.

A strong majority of New Zealanders are concerned about climate change and taking actions that reduce household emissions, according to a recent survey.

Researchers at Motu Economic and Public Policy Research, an independent, not-for-profit research institute, and Victoria University of Wellington designed the survey of about 2200 New Zealanders aged 18+. The survey was conducted by Horizon Research Limited from 28 July to 1 September 2014 with support from the Sustainable Business Council.

The survey showed that about 87% of New Zealanders are at least somewhat concerned about the effects of climate change on society in general.

63% are concerned or very concerned about the societal effects of climate change and 58% are concerned or very concerned about the personal effects.

Figure from Horizon Research Ltd (2014)

Monday, 11 May 2015

Shaping New Zealand’s Contribution to a Low-Emission Future

By Catherine Leining (Policy Fellow) and Suzi Kerr (Senior Fellow), Motu Economic and Public Policy Research

In the international climate change negotiations, countries are currently preparing their emission reduction proposals for the period post-2020.  For many countries, these are likely to include quantified emission reduction targets plus a supporting explanation.  The New Zealand government is starting the consultation process on its proposal. 

At the global level, if countries want to limit the future temperature rise to no more than two degrees Celsius above pre-industrial levels, then two target numbers really matter.  The first is zero. We need to achieve zero net annual CO2 emissions globally by 2100. The second is one trillion. Global emissions need to peak and decline in order to limit cumulative net CO2 emissions to no more than one trillion tonnes of CO2 (as carbon) starting from the pre-industrial period. Under business as usual, we are projected to exceed our cumulative limit before mid-century. While many countries acknowledge the importance of the global temperature goal, most won’t commit to anything that appears to threaten their citizens’ development needs.

To turn those targets into reality, countries need to define collaborative pathways that will deliver a zero-net-emission future while meeting development needs. Recognising the uncertainties inherent in future technologies, markets and politics, what might transformational pathway choices look like for New Zealand?  Here are nine possibilities as a starting point for discussion.

Thursday, 7 May 2015

Ontario on a Tear with its New Climate Proposal

By Derek Walker, Associate Vice President of the Environmental Defense Fund. Cross-posted from the EDF with permission. View the original post here.

Once upon a time, an international agreement forged through the United Nations Framework Convention on Climate Change (UNFCCC) seemed the surest route to meaningful action on climate change. But the complexities of reaching common ground between nearly 200 distinct national agendas have dimmed the hopes for the sort of “global deal” envisioned in the run-up to the Copenhagen conference in 2009. The UN process has provided a platform for countries to make new emission reduction commitments: Mexico recently announced a promising post-2020 climate commitment, and the US-China announcement last November was a game-changer. Even these critical breakthroughs, however, demonstrate that strong action on climate will be driven from the “bottom up” by national policies, not from the “top down” by an international treaty.

Thankfully, many leaders are blazing a path towards climate progress, working from the ground up and collaborating with others to foster collective action. As I have previously written, cities, states, and provinces are going ahead with some of the most substantial climate commitments to date. Ontario – Canada’s largest province, with 40 percent of the country’s population and nearly one-quarter of its greenhouse gas emissions – has become the latest jurisdiction to chart an ambitious path forward with this morning’s announcement of a comprehensive cap-and-trade program intended to ultimately link with the existing California-Quebec system.

Tuesday, 28 April 2015

Reflections on the international climate negotiations

By Chris Bean 

Chris Bean observed the 2014 round of the UN climate negotiations in Lima as part of the NZ Youth Delegation, a volunteer organisation that brings youth closer to the negotiations.

Having studied climate change for part of my undergraduate degree, going into the negotiations as an observer I thought I had a pretty solid handle on things. Well, it turns out that humble pie became a staple at the negotiations. I had the privilege of attending the UN climate negotiation round as part of the NZ Youth Delegation in December 2014 and this blog covers some personal experiences that defined the negotiations for me, as well as some observations of the broader process and what’s coming next on my journey with climate change.

Confusion was the overwhelming feeling during the initial days of the negotiations. Forget solving climate change for now – it took me two days to figure out how to use the scheduling system. Embarrassing! After talking to some more experienced people at the negotiations, I learned this was not unusual and that it takes multiple rounds of negotiations to really get one’s head around what is going on. I have overwhelming respect for everyone involved in the negotiations, especially the negotiators and UN staff who have dedicated their lives to this work, as well as the youth driven to follow the negotiations year after year to push for outcomes that affect us all.

Friday, 24 April 2015

Subsidising sprawl: Why sprawl is bad for us and how public policies lock it in

By Louise Sherrell

© Karenfoleyphotography | - Driving In Atlanta Photo
A recently released report has found that urban sprawl costs big money and has long-term climate change implications, and yet public policy often encourages this approach to planning. The report clocks the economic cost of sprawl in the US at over US$1 trillion a year, in addition to substantial environmental and social costs such as greater emissions from vehicle use and poorer population health and fitness. Acting to implement smarter urban growth policies globally “could reduce urban infrastructure capital requirements by more than US$3 trillion over the next 15 years.”
“Americans living in sprawled communities directly bear an astounding $625 billion in extra costs. In addition, all residents and businesses, regardless of where they are located, bear an extra $400 billion in external costs. Correcting this problem provides an opportunity to increase economic productivity, improve public health and protect the environment.”
The report, An Analysis of Policies that Unintentionally Encourage and Subsidise Sprawl, comes from the New Climate Economy, the flagship initiative of the Global Commission on the Economy and Climate – an amalgam of heads of state, finance ministers, and economists. While the data are US-centric, the study’s findings offer important insights for New Zealand; many of our planning regulations are similar, and our urban population densities for our three largest cities are comparable on a global scale to those of cities in the US. The report also details smart growth policies that can counter the planning and market distortions that foster sprawl.

Tuesday, 21 April 2015

The climate may be changing in climate change

This piece, by political analyst Colin James, originally appeared in the Otago Daily Times on 14 April 2015. It is also available for download on Colin's own blog,

After the world cricket cup superhyperbole comes heroic Gallipoli. Periodically New Zealand mutates into Jingoland.

On Saturday our soldier Governor-General and non-soldier Prime Minister open the Pukeahu National War Memorial Park. That day Te Papa launches "Gallipoli: The scale of our war", designed by Weta Workshop's Sir Richard Taylor, with videos.

That collaboration exemplifies Te Papa chief executive Rick Ellis's entrepreneurship. Ellis is developing non-jingo projects to project unique aspects of our culture and identity, including the bicultural accommodation, with events and collaborations here and abroad.

Tuesday, 17 March 2015

The Global Calculator: Crunching the numbers for a low-emission future

By Paul Young, Generation Zero

Paul Young is a co-founder of the youth climate change organisation Generation Zero and remains involved as a member of the national executive. He is also a trustee of the National Energy Research Institute, the modelling team leader for the NZ 2050 Pathways project, and a participant in the Motu Low-Emission Future Dialogue.

“Hate wind farms? Eat chicken, not beef” - The Telegraph, 28 January 2015

Despite the baiting headline from a newspaper known for its doubtful position on man-made climate change and antagonism towards wind power, the team behind the newly-launched Global Calculator marked this coverage as a success.

The Telegraph had picked up on one (rather surprising) conclusion from the Global Calculator: cutting global beef consumption by 100 grams per week per person and eating chicken instead would “do more to tackle climate change than building two million onshore wind turbines and 2,000 nuclear reactors.” This results not just from the direct reductions in farming emissions, but also the implications for land use which are captured in the Calculator model. It’s one great example of the kind of choices and trade-offs this remarkable tool allows us to explore and gain insight into.

Monday, 9 March 2015

Energy-efficiency rules fail US academic's test

Note: The following article recently appeared on Carbon News, and has been cross-posted (with minor changes) with their permission. Arik Levinson spoke to audiences in Wellington in February 2015 as part of the Motu Public Policy Seminar Series, where his talk was co-hosted by the Institute for Governance and Policy Studies at Victoria University of Wellington. His presentation will be made available on Motu's website. To hear more from Arik Levinson, check out his recent interview on the Freakonomics podcast here.  His working paper "How Much Energy Do Building Energy Codes Really Save? Evidence from California" is available here.

Energy efficiency rules in California have failed to cut energy consumption, suggesting that direct action is less effective than carbon pricing in reducing greenhouse gas emissions, a visiting economist says.

Georgetown University professor Arik Levinson – a former White House adviser on energy efficiency – is speaking in Wellington today. [Note: The presentation was on 16 February 2015.]

He told Carbon News that while it appeared that energy efficiency rules for new houses, imposed in California from the mid-70s, had cut electricity consumption, his research showed this wasn’t true.

“There is no evidence that homes constructed since California instituted its building energy codes use less electricity today than homes built before the codes came into effect,” he said.

Friday, 27 February 2015

Emissions Trading Scheme or Carbon Tax? The Australian experience and lessons for New Zealand

By Suzi Kerr, Senior Fellow, Motu Economic and Public Policy Research, and Frank Jotzo, Director of the Centre for Climate Economics and Policy at the Australian National University.

Note: This piece follows from a discussion on this topic by Suzi and Frank at the annual conference of the Australian Agricultural and Resource Economics Society in Rotorua in mid-February 2015.

Australia had an emissions trading scheme with a fixed price. It was one good way to encourage carbon cuts throughout the economy. But the opponents called it a carbon tax and won the political debate. The scheme has now been abolished, and an economically and environmentally inferior subsidy scheme has taken its place.

There is a cautionary tale in this for New Zealand. The country needs to make some big decisions about climate change policy. The emissions trading scheme looked mortally wounded and now is limping along again. But policy settings for the future are still unclear. Investors, including foresters, do not know what emissions price they should factor into their decisions.

Friday, 20 February 2015

Australia's pathway to deep decarbonisation by 2050

By Catherine Leining, Policy Fellow, Motu Economic and Public Policy Research

Australia's deep decarbonisation pathway to 2050:
Image from ClimateWorks Australia
In December 2014, Amandine Denis, Head of Research at ClimateWorks Australia, gave a seminar at Motu on Australia's participation in the Deep Decarbonisation Pathways Project (DDPP).  She explained that Australia has the technical potential to achieve zero net emissions from energy (with some offsetting by forestry) by 2050 using a pathway that enables GDP growth at an average annual rate of 2.4% - a rate similar to that of the last five years.

The DDPP was launched by the Sustainable Development Solutions Network (SDSN) and the Institute for Sustainable Development and International Relations (IDDRI) to demonstrate how countries can reduce emissions to limit global temperature increases below 2°C.  So far, researchers in 15 countries covering 70% of global emissions have chosen to develop technically feasible national pathways for deep decarbonisation. Participating countries include Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Japan, Mexico, Russia, South Africa, South Korea, the UK, and the USA.  Researchers work independently from their respective governments.

Friday, 13 February 2015

New Zealand’s journey toward a low-emission future: Today’s climate change landscape

By Catherine Leining, Senior Policy Fellow, Motu

Note: Motu has just published three Motu Notes on climate change issues prepared as background papers for its Low-Emission Future Dialogue. The first in the series presents an overview of the climate change challenges facing New Zealand and the current policy context.  This information is highly relevant because in 2015 New Zealand will need to present its post-2020 emission reduction commitment - referred to as an Intended Nationally Determined Contribution - under a new international climate change agreement currently under negotiation. The paper's executive summary is provided below.  The full paper is available here. 

In the coming decades, New Zealand will face important choices shaped by both the risks and opportunities created by climate change. This paper provides an overview of the current climate change landscape from which New Zealand is starting the next stage of its journey toward a global low-emission future. The key findings are:

Climate change science, emission trends and mitigation scenarios The latest reports from the Intergovernmental Panel on Climate Change (IPCC) reinforce the case for significant reductions to global greenhouse gas (GHG) emissions. Under business-as-usual growth in emissions, the global mean surface temperature in 2100 could increase by 3.7oC to 4.8oC compared to pre-industrial levels. A least-cost pathway to limit temperature increases to not more than 2oC above pre-industrial levels would involve reductions of 40–70 percent below 2010 levels by 2050 on the way toward a zero-net-emission global economy. A key objective should be limiting cumulative emissions, and delaying action significantly increases the costs of mitigation.

Thursday, 5 February 2015

California’s cap and trade is succeeding after two years, report says

By Katie Hsia-Kiung, High Meadows Research Fellow, US Climate and Energy Program, Environmental Defense Fund

Note from Catherine Leining at Motu:  This week we host a guest blog on the California Emissions Trading Scheme (ETS) by Katie Hsia-Kiung at the Environmental Defense Fund.  On 3 February 2015, Katie and her colleagues Erica Morehouse and Derek Walker gave a fascinating presentation on the California ETS to participants in Motu's Low-Emission Future Dialogue. With coverage of the electricity, industrial, transport and natural gas sectors as of 2015, the system covers 85% of the state's emissions, and additional sectors can engage through an offsets mechanism. They highlighted some of the key design differences relative to the NZ ETS, including: partial auctioning of allowances with a price floor (currently US$11.34) and an allowance price containment reserve; a quantity limit on the use of offsets (8%); and direct linking with Quebec's ETS.  Their auction produced revenue of about US$1 billion in 2012, and this is projected to increase to US$12 billion by 2020. Revenue is being directed to reduce the system's impact on electricity ratepayers and benefit the most impacted communities through programmes on sustainable communities and clean transportation, energy efficiency and clean energy, and natural resources and waste diversion.  Significantly, California's ETS was envisaged as an "insurance mechanism" accounting for about 20% of the emission reductions within a suite of 70 complementary mitigation policies operating across the state. This experience could help to inform the government's review of the NZ ETS scheduled in 2015.  

These days, everyone seems to have an opinion about everything. The ubiquity of social media channels has saturated public discourse with so many viewpoints that it can be nearly impossible to distinguish facts from fiction. But facts still matter. Even though an argument about the quality of a neighborhood restaurant or the accomplishments of your local elected official might be inherently subjective, there’s no question that strong, empirical evidence gives you the best shot at coming out on top. What’s more, the greater the consequences of the issue being debated, the higher the stakes are when it comes to analyzing and acting on real-world evidence.

Friday, 23 January 2015

How much CO2 are humans producing, anyway?

By Jocelyn Turnbull, Senior Scientist, GNS Science

Jocelyn Turnbull collecting air samples
downwind of the Kapuni natural gas plant
in Taranaki in October 2014. 
Photo credit: Jessica Mills, GNS Science
With the historic news that China and the USA have agreed to limit their greenhouse gas emissions and the progress at the latest round of climate talks just finished in December 2014, it is worth thinking about how we determine what those emissions actually are, and how we will know if they (and we!) are meeting emission goals.

We know what the current emission levels are because governments and industry have agreed to report them.  For the energy sector, industries and governments track usage of coal, oil and natural gas, and governments tally up the totals and report them to the United Nations Framework Convention on Climate Change, following a detailed set of guidelines.  As far as we know, those reports have been made in good faith, and reports undergo international peer review, but in a future where we agree to regulate emissions, how can we establish greater trust and be more confident that other nations are meeting their obligations?

Friday, 16 January 2015

New Zealand’s multilateral assessment at COP20

Yong Ly is an analyst with a background in engineering and technology. He was a youth delegate to the UNFCCC Conference of the Parties in Lima, Peru in December 2014.

This year New Zealand was one of 17 developed countries whose quantified emission reduction targets for 2020 were assessed as part of a newly established international assessment and review process under the UN Framework Convention on Climate Change (UNFCCC). The purpose of these assessments was to provide a mechanism to engage, assess and compare the progress of developed countries in meeting their emission reduction targets.

Other countries were able to submit questions in advance to the 17 featured countries pertaining to what emission reductions had been achieved, how they achieved these reductions, and how they planned to meet their targets.

Friday, 9 January 2015

Lima climate talks showcase another path to global climate action: through states, provinces and cities

By Derek Walker, Associate Vice President, US Climate and Energy Program, Environmental Defense Fund

Note from Catherine Leining at Motu:  This post carries a powerful story from the December 2014 climate change conference in Lima about constructive efforts by subnational governments to promote global progress in reducing greenhouse gas emissions. It highlights the leadership being demonstrated by the US state of California, which has implemented a cap-and-trade scheme and is actively encouraging international collaboration.

The chattering classes of the climate policy world are abuzz with their customary post-mortems following the latest breathless two-week session of the United Nations Framework on Climate Change 20th Conference of Parties (also known simply as COP 20), held in Lima, Peru.

Consensus is forming around a “slightly better than nothing” assessment of the Lima Call for Climate Action, which was adopted in the wee hours of Sunday amidst the usual skirmishes over money, monitoring, and mandates.

Lima clarified some of the expected content of the national pledges (“Intended Nationally Determined Contributions,” INDCs in COP shorthand) to be presented by all countries next year.

Notwithstanding the softness engendered by the word “intended,” at least we aren’t firmly stuck in the “old world order” where only developed countries are taking on mitigation actions.