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.

Banking ideas for climate solutions

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

"How might New Zealanders help to reduce climate change?"

People who are increasingly concerned about climate change want to know what practical steps they could take to be part of the solution. Motu has released a new information resource which could help: an Idea Bank of Pathway Milestones for New Zealand’s Low-Emission Future.

During the past two years, participants in Motu's Low-Emission Future Dialogue have explored possible pathways toward a successful low-emission economy for New Zealand.  Participants engaged in their personal capacity, not as organisational or sector representatives. Detailed ideas that emerged from the process are captured in this “idea bank” document, which is offered in the spirit of sparking discussion, not as recommendations. While acknowledging the vital role that forestry will play, the participants focused on the stationary energy, land transport and agriculture sectors. Additional outcomes from the process are presented in the synthesis report New Zealand’s Low-Emission Future: Transformational Pathways. 

Can Engineers Change the World? Energy Transition Engineering

Dr Susan P Krumdieck is Professor in Mechanical Engineering and Director of the Advanced Energy and Material Systems Lab, University of Canterbury, New Zealand.

Can technology solve the climate problem? Dr Krumdieck outlines her work on a new interdisciplinary practice called transition engineering: changing course one innovative project at a time.

Business leaders recognise that the biggest risk to their business is energy transition. The most popular concept of this transition involves a substitution of renewables for fossil fuels and development of elusive tail-pipe technologies like carbon-capture and storage. This concept is comforting and simple. But it is also profoundly wrong. There is no way to achieve an energy transition without completely reworking every aspect of our infrastructure, industry and economy to vastly reduce energy demand. Changing the global economy to nearly eliminate the use of fossil fuels is a “wicked problem” – a problem with no known solution. This is why the new field of energy transition engineering is emerging. 

Can engineers change the world?

Charting a course toward New Zealand’s low-emission future

by Catherine Leining, Policy Fellow, Suzi Kerr, Senior Fellow, and Ceridwyn Roberts, Communications Director, Motu Economic and Public Policy Research.

When Captain Cook set out to observe the Transit of Venus in the South Pacific, it was a part of Earth so poorly explored by westerners that European mapmakers couldn’t agree if he would find a giant continent there or not. Cook steered across miles of open ocean, fighting storms and scurvy to reach Tahiti.

These days there’s similar trepidation awaiting those who try to map the future landscape of climate change solutions.

Over the last two years, Motu Economic and Public Policy Research has convened the Low-Emission Future Dialogue, engaging a group of cross-sector stakeholders in their personal capacities to explore options for a successful zero-net-emission economy in New Zealand.  The goal was creative problem solving, not consensus on recommendations.  The outcomes are a collection of ideas not necessarily endorsed by individual participants, their affiliated organisations, or programme funders.