International transfers of mitigation to achieve the goals of the Paris Agreement

By Suzi Kerr (Motu Economic and Public Policy Research) and Mike Toman (World Bank)

More than a year has passed since the signing of the Paris Agreement under the United Nations Framework Convention on Climate Change, in which developed, emerging and developing countries across the world have pledged to limit or reduce their greenhouse gas emissions (GHGs) as a start toward limiting dangerous climate change. Under the Agreement, countries can work together to reduce emissions. 

Mike Toman, a Lead Economist in the World Bank’s Development Research Group, and Motu’s Suzi Kerr have come up with three basic guidelines for financing of emissions reductions in less economically advanced countries:
1. Do not conflate “international carbon markets” with “internationally transferred mitigation outcomes.”
2. Be cautious about the apparent gains from linking emissions trading markets.
3. Create contracts between developed and developing country governments for internationally transferred mitigation obligations.

Assessing the impacts of Motu’s Low-Emission Future Programme

by Catherine Leining, Ceridwyn Roberts, and Suzi Kerr of Motu Economic and Public Policy Research Trust.

In November 2016, Motu surveyed 360 people interested in climate change policy and had 81 responses. The survey was designed to help assess the impacts of Motu’s programme ‘Shaping New Zealand’s Low-Emission Future’ and its cross-stakeholder Emissions Trading Scheme and Low-Emission Future Dialogues as well as inform future programme planning. As a ‘thank you’ to all those who took part Motu will purchase and plant six trees through the Wellington City Council’s ‘Two Million Trees’ initiative.

We feel encouraged that more than three quarters of respondents agree or strongly agree that Motu’s work has enhanced the quality of policy discussion on climate change mitigation and that more than four fifths of respondents regard Motu as a credible source of independent expert information on climate change mitigation.

New emissions reduction plan business as usual

By Ralph Sims. Reprinted with permission from Carbon News

The Government’s plan to cut the emissions intensity from industrial heat generation  by 1 per cent a year is just business as usual, and will do little to achieve New Zealand’s Paris Agreement commitment.

Ralph Sims is Professor of Massey University’s School of Engineering and Advanced Technology, an IPCC lead author and consultant to the International Energy Agency. He is an expert on renewable energy deployment and policies, distributed energy (including smart grids), biomass supply chains and bioenergy conversion, biofuels for transport andclimate change and renewable energy scenarios.

There is a major disconnect between New Zealand’s international commitments under the Paris Climate Agreement and the recently released draft for consultation of the NZ Energy Efficiency and Conservation Strategy for 2017 to 2022.

Forestry in the Emissions Trading Scheme

by Tom Carver, Motu Intern

The New Zealand Emissions Trading Scheme (NZ ETS) is “the Government’s principal policy response to climate change”.[1] It has been operational since 2008; however, much of the information and data that is are necessary to evaluate its performance and model the future evolution of the ETS and its implications for meeting future targets haves not been publicly released by the government. 

Earlier this year Motu requested information on:

• Clarification for how forestry will be accounted for under New Zealand’s Paris INDC targets, and any associated modelling;
• Forecasts of afforestation, emissions and removals from ETS registered forests;
• Extra details on forestry that had not yet been made public:

1. Age and size profile for ETS registered forests;
2. Area weighted average age of deforestation for pre-1990 forests;
3. Region, age and species of land removed from the ETS;
4. Other technical details: The extent of ETS exemptions for tree weeds and owners with less than 50 hectares of pre-1990 forest, distinctions between data reporting in voluntary vs. mandatory returns, forest area involved in forest offsetting provisions (enabling landowners to avoid ETS deforestation liabilities if they establish a comparable forest elsewhere), and the proportion of NZUs in the ETS bank that are attached to future liabilities for post-1989 forest.

MPI officials withheld information on the first point on the grounds that negotiations for these rules are still being finalised after the Paris agreement last year and that these are therefore sensitive. The information they provided is available on the Motu website.

Creating Trust and Transparency in Fossil CO2 Emissions Reporting

by Jocelyn Turnbull, Senior Scientist, GNS Science

Marcus Trimble and Margaret Norris using the GNS Science high-tech grass sampling method near the Kapuni plant in Taranaki. A GPS, a plastic bag and a marker pen are all that is required. And perhaps a pair of gumboots! Photo credit: Jocelyn Turnbull, GNS Science.

Last year, I wrote about how we can use atmospheric measurements to determine whether nations and industries are meeting their fossil fuel CO₂ emission reduction goals. With the Paris Agreement, the stakes have gotten higher, with most nations agreeing to reduce their emissions, and a recognized need for “trust and transparency” amongst nations in emissions reporting.

This week, GNS Science published a new research paper taking the concepts I talked about in my previous post, and turning them into a specific method that evaluates emissions from individual power plants to better than 10% accuracy. This is key because power plants are the biggest emission sources (the huge Taichung coal-fired power plant in Taiwan produces more fossil fuel CO₂ than all of New Zealand!). This makes them an obvious target for regulating and reducing emissions. 

In the past there have been considerable barriers to measuring emissions rates from power plants. Radiocarbon measurements that need to be used in this process are time-consuming and expensive. Additionally, the atmospheric models used to translate fossil CO₂ concentration measurements to emission rates from the power plant are most accurate when averaged over long time periods.

To remove these barriers, the scientists at GNS came up with the idea of using living grass as sample collectors. There is no special field sampling equipment required, and grass effectively collects a radiocarbon sample averaged over the many days it grows. A single grass measurement tracks a week or so of emissions and is a perfect complement to the optimal model averaging period. These innovations allow us to measure the power plant emission rate to 10% accuracy. This is a marked improvement over the ~20% reported by individual power plants (based on their methods). That ~20% also doesn't take into account any bias in the plants' self-reporting. 

Grass growing in farmland near the Vector Kapuni plant in Taranaki makes an ideal sampler for fossil CO₂ emissions. Photo credit: Jocelyn Turnbull, GNS Science.

This simple and low-cost method was developed using the Kapuni processing plant in Taranaki as a test case and can be readily applied around the world. 

"Climate Cheats II": The Return of New Zealand’s ERU Controversy

by Catherine Leining, Motu Economic and Public Policy Research

In the tradition of dramatic sequels, the Morgan Foundation has just released "Climate Cheats II," this time with a focus on the 'dirty dozen' NZ ETS participants who used the most 'hot air' Emission Reduction Units (ERUs).[1]

The issue at the heart of both “Climate Cheats” reports is vitally important: New Zealand must safeguard the integrity of its contribution to climate change mitigation and the operation of the NZ ETS. The environmental, economic and reputational consequences of doing otherwise would be severe. The past choices made by the New Zealand government and NZ ETS participants followed the letter of the law internationally and domestically but not the spirit of the quest for a stable climate system. Importantly, those choices have a troubling legacy in the form of surplus Kyoto units of questionable integrity and international status, and a large participant-held bank of NZUs.

I have three key points in response to "Climate Cheats II." 

1. New Zealand didn’t cheat, but the climate got cheated by a global agreement with weak targets.

NZ government to restore a full unit obligation in the NZ ETS

By Suzi Kerr and Catherine Leining, Motu Economic and Public Policy Research

Under its Budget 2016 package, the New Zealand government announced today that it will progressively phase in a full unit obligation for non-forestry sectors in the New Zealand Emissions Trading Scheme (NZ ETS) over a three-year period. 

According to the media release from Hon Paula Bennett, Minister for Climate Change Issues, “The current 50 per cent unit cost will increase to 67 per cent from 1 January, then 83 per cent from 1 January 2018, with all sectors in the ETS paying the full market price from 1 January 2019. The current price ceiling which caps units at $25 will remain.”

Restoring a full unit obligation in the NZ ETS represents an important step forward for incentivising domestic mitigation but future emission prices remain uncertain in the absence of broader decisions on future unit supply.