24 December 2015

COP21 Kevin Anderson the crisis is worse than we think & scientists are self-censoring to downplay risk

Kevin Anderson talking to Amy Goodman of Democracy Now at COP21 Paris.

COP21 Paris Agreement Johan Rockstrom Kevin Anderson

Johan Rockstrom and Kevin Anderson speaking as a panel of 5 scientists commenting on the final text of the Paris Agreement.

22 December 2015

Must-Read Kevin Anderson views on the Paris Agreement and COP21

The Paris Agreement: 10/10 for presentation; 4/10 for content. Shows promise.

"If the global community is to maintain emissions with the 2°C carbon budget, there needs to be much greater recognition of the profound and immediate challenges we face. The scale of emission reductions will not be delivered through eloquent speeches, win-win rhetoric and green-growth spin. Zero carbon energy technologies are a prerequisite of a 2°C future – but they are far from sufficient. They will only deliver the necessary levels of mitigation if they are accompanied by fundamental changes to the political and economic framing of contemporary society. This is a mitigation challenge far beyond anything discussed in Paris – yet without it our well-intended aspirations will all too soon wither and die on the vine. We owe our children, our planet and ourselves more than that. So let Paris be the catalyst for a new paradigm – one in which we deliver a sustainable, equitable and prosperous future for all."

Talks in the city of light generate more heat. Nature

"The allying of deep and early reductions in energy demand with rapid substitution of fossil fuels by zero-carbon alternatives frames a 2 °C agenda that does not rely on negative emissions. So why was this real opportunity muscled out by the economic bouncers in Paris? No doubt there are many elaborate and nuanced explanations — but the headline reason is simple. In true Orwellian style, the political and economic dogma that has come to pervade all facets of society must not be questioned. For many years, green-growth oratory has quashed any voice with the audacity to suggest that the carbon budgets associated with 2 °C cannot be reconciled with the mantra of economic growth."

I can't really add anything to Anderson's analysis. I strongly recommend that you read both items.

20 December 2015

Minister for Climate Change Paula Bennett's first act is confirming 'Hot Air' creative accounting with surplus Kyoto Protocol units

New Zealand's new Minister for Climate Change Issues, Paula Bennett, has just confirmed New Zealand will be "carrying forward" 127 million "Hot Air" emissions units (or offsets) under the Kyoto Protocol rules. These units mostly do not represent a tonne of carbon dioxide equivalent reduced somewhere else and yet the Government intends to use them to allow New Zealand's greenhouse gas emissions to continue to increase.

On Thursday 17 December 2015, Ms Bennett released a statement stating that New Zealand had met it's 2008 to 2012 Kyoto Protocol emissions reduction target and was well on the way to meeting the 2013 to 2020 target.

The Minister's statement linked to four reports on the Ministry for the Environment's website;

  1. the Biennial report and net position snapshot 2015,
  2. the Biennial Report to the United Nations Framework Convention on Climate Change,
  3. the Report upon expiration of the additional period for fulfilling commitments by New Zealand and finally
  4. the updated Latest update on New Zealand's 2020 net position

.

In two scathing posts No Right Turn assesses the dubious use of the Ukrainian and Russian units derived from coal stockpile projects; Climate change: A policy based on fraud and Climate change: How bad is New Zealand's climate fraud?.

My previous estimate of the amount of surplus units was 86 million units. The reports confirm 127 million units. I did a back-of-envelope calculation to relate the numbers of units cancelled (to match 2008 2012 emissions) and the numbers left over as 'surplus' which may be carried forward.

The updated Latest update on New Zealand's 2020 net position explicitly confirms that New Zealand is 're-using' the surplus units in assessing compliance with the 2020 target of a 5% reduction in emissions from a 1990 gross emissions base. So we will 'meet' the 2020 target in spite of projected increases in both gross emissions and net emissions. Gross emissions in 2020 are estimated to be 83 million tonnes, or 24% higher than 1990's 67 million tonnes of carbon dioxide equivalent. Net emissions in 2020 are estimated to be 59 million tonnes, or 54% higher than 1990's 38 million tonnes.

Manipulating accounting rules like this, so that an adverse trend is systematically misrepresented is as it's opposite, a positive trend - is the text-book definition of creative accounting. I agree with No Right Turn that this is another example of New Zealand's completely unethical climate change policy.

09 December 2015

Kevin Anderson shocks Bloomberg with net zero carbon message by 2050

More COP21 media coverage. Kevin Anderson does a five minute interview emphasizing the need for carbon dioxide emissions to drop to zero by 2050 with the slightly incredulous Bloomberg Business channel hosts. I don't think rapid and radical decarbonization of the economy is really part of their world view!

COP 21 and the path to controlling climate change.

21 October 2015

Environment Aotearoa 2015 omits NZ's greenhouse gas growth trend

The Ministry for the Environment and the Statistics Department jointly released the new state of the environment report Environment Aotearoa 2015 today.

The press release for the co-produced report, promises quite a lot.

Government Statistician Liz MacPherson said the report gives a clear and independent overview, based on the best-quality information available.
Ms MacPherson said the report uses robust data from hundreds of sources, and follows international best practice for environmental reporting. “We would like to improve the data for future reports, and we are working on this,”
"The report is supported by interactive web pages containing trend and regional data. I would encourage people to take a look at the areas they are interested in.”

Wow! Interactive web pages containing trend and regional data! How could I resist the temptation to look for some interactive graphs of greenhouse gas emissions! And to compare their graphs with my graphs.

I browsed on through the 'Atmosphere and Climate' domain to the page for Global greenhouse gas emissions and found only...information on global greenhouse gas emissions. And a factoid that could have culled from any speech by Tim Groser or Nick Smith.

Between 1990 and 2011, New Zealand emitted an average of 0.1 percent of global net GHG emissions.

I tried again at the page Greenhouse gas concentrations. This page reported concentrations of greenhouse gas emissions recorded at Baring Head. Interesting but still no national emissions data.

However, i did find a widget enabling the embedding of a graph the Baring Head atmospheric carbon dioxide data record.

Nowhere from anywhere within the Te Taiao Aotearoa environmental indicator web pages could I find any mention of New Zealand's gross and net greenhouse gas emissions.

I resorted to doing a search of the Statistics website for greenhouse gases. That did turn up a web page showing New Zealand's greenhouse gases. That page clearly reported the trend with a prominent red cross.

Negative change. New Zealand’s net greenhouse gas emissions have increased 42 percent since 1990. New Zealand’s net greenhouse gas emissions increased 42 percent between 1990 and 2013. Total emissions increased 21 percent.

Another widget for embedding. A very plain graph. It uses a different greenhouse gas inventory report published earlier this year from my graphs for 1900 to 2012. The data for 1990 to 2013 uses a different way of calculating the carbon dioxide equivalent values for methane. This increases the year by year values by several million tonnes per year.

Still it just seems so bizarre to have statutory environmental indicators and to not include our national production of greenhouse gases. Especially since Statistics already had the data on it's web page. They need only to have put the link in. Is this cognitive dissonance, self-censorship or climate silence?

17 October 2015

New Zealand Gross & Net Greenhouse Gas Emissions 1990 to 2012

I have just prepared and revised a graph of New Zealand's gross and net greenhouse gas emissions for the years 1990 to 2012. I have recycled the style of the graph of gross emissions from 1861 to 2012.

NZ-ghg-2012-720by540

I have used html code from the scalable vector graphic I uploaded to Wikipedia Commons and not the Blogger template. I think it gives a better quality graphic.

The data is from Ministry for the Environment publication New Zealand’s Greenhouse Gas Inventory 1990 – 2012, Report ME 1148, ISBN 978-0-478-41242-0, April 2014.

The data and R programming language script are available at Wikimedia Commons.

12 October 2015

How I made the graph of NZ agriculture and energy greenhouse gas emissions

Yes another post about my new line chart of gross greenhouse gas emissions in New Zealand.

I have just uploaded a SVG version to Wikimedia Commons. On that page there is a link to the data source on Robbie Andrew's website and the background to the data and it's use in a publication.

The scaled vector graphic looks like this when the suggested template from Wikimedia is used.NZ Gross GhG Emissions 1861 to 2012

And I have uploaded the R script I wrote to Google Drive. And here it is below via a Github Gist.

11 October 2015

Graph of New Zealands gross greenhouse gas emissions 1861 to 2012

Robbie Andrew has compiled a long term data set of energy and agriculture greenhouse gas emissions for New Zealand starting in 1861.

So obviously that prompted me to make a line chart.


This image is set at actual size of 535 pixels.

28 September 2015

The Burning Question debunks peak fossil fuels

I recently met a certain Green Party councillor of a nearby local council who said he thought New Zealand's greenhouse gas emissions would decline by 10 percent in the next twelve months. The decline would be caused partly by restrictions on the availability of oil and gas and partly by the recent decline in the global whole milk powder prices.

I proposed a bet of one thousand dollars (to be given to a climate change project) that there would be no decline in either net or gross greenhouse gas emissions from 2015 to 2016, let alone a decline of 10 percent. In other words I was happy to bet against 'peak oil'. Because don't see how any one can claim to understand anthropogenic climate change as an issue and still hold the view that declining supply of liquid fossil fuels will damage the world's economies.

So I am very pleased to find this talk by Duncan Clark given at University College London on 2 July 2013 about the book The Burning Question co-authored with Mike Berners-Lee.

Their simple thesis is that the available proven reserves of oil gas and coal, that are already recognised as assets on the balance sheets of fossil-fuel companies, exceed a 'likely' carbon budget consistent with limiting average global warming to two degrees Celsius by 2100. And therefore the policy question is "how do we keep trillions of dollars of fossil fuels in the ground?"

The Guardian has a good review of The Burning Question.

24 September 2015

What is a Intended Nationally Determined Contribution?

Intended Nationally Determined Contributions (INDCs) are outlines of the actions that countries intend to take to address climate change, submitted ahead of the December 2015 Paris UNFCCC negotiations (Source: The Road Through Paris).

This is explained in this short video.

The video is the creation of Climate Countdown,

who examine different facets of this complex issue and break it down into bite-sized bits
.

09 July 2015

Tim Groser and New Zealand's impersonation of a 2030 Climate Change Target

Gareth Renowden at Hot Topic covers the release of New Zealand's 2030 Climate Change Target.

I think we need to understand that this target, just like its predecessors, is a complete fiction. Groser and National have no intention of ever adopting any measure that will make NZ’s greenhouse gases deviate from continued ‘business as usual’ growth.

Note that the Ministry for the Environment's website says; “New Zealand will meet these responsibility targets through a mix of domestic emission reductions, the removal of carbon dioxide by forests and participation in international carbon markets.”

Brian Fallow says the MFE’s (dodgy) economic modelling assumes 80% of the “reduction” will be “met” by buying international carbon units. On that basis, they can then just repeat the Kyoto Gross-Net forest accounting fudge of saying the baseline is ‘gross’ or total emissions and that the target will be ‘net’ including credits for afforestation and reforestation. There we have it! Zero domestic reductions in emissions.

Note also the very conditional language in the INDC sent to the UNFCCC and in Groser’s press release.

The target is provisional and conditional on 1) access to carbon markets, 2) land use and forest rules NZ agrees with (presumably to keep the Kyoto Gross Net fudge), and 3) effective and affordable mitigation technology for agriculture.

On that basis, NZ might start to reduce domestic emissions but only if the rest of the world at the UNFCCC Paris December 2015 meeting bends over backwards to meet Tim Groser’s unattainable provisos.

Whatever approach Paris 2015 takes and whether it “succeeds” or not, the rules of whatever agreement, if there is one, will probably take several more years to thrash out. All of which enables NZ to claim the conditions haven’t been met, so no reductions. Even if some perfect rules appear, NZ can say “Sorry our little-battling-punching-above-its-weight Agricultural Research Centre still hasn’t given us affordable mitigation for pastoral agriculture.

This is real “heads we win, tails the atmosphere loses” approach.

07 June 2015

1.5 degrees Celsius or 2 degrees? Maybe it's turtles all the way down

In November and December later this year, the 21st Conference of the Parties of the UNFCCC will meet in Paris and hopefully conclude an international treaty that will begin in 2020 and limit emissions of greenhouse gases enough to keep average warming of the planet to no more than two degrees Celsius above pre-industrial temperatures.

A group of law students from Victoria University of Wellington are deconstructing the existing draft text of the proposed treaty.

The draft Paris text mentions a global temperature increase of 2 degrees C about 20 times. Sometimes followed by "or 1.5 degrees C", obviously an alternative. The usage is that these metrics are a "global temperature goal" (page 6). This is more obvious when set out in full: "holding the increase in global average temperature below 2 degrees C or 1.5 degrees C above pre-industrial levels" (page 5).

So we can understand 1.5 degrees C and 2 degrees C as the quantitative measures of the undefined phrase 'dangerous anthropogenic interference with the climate system' from the UNFCCC.

The 2 degrees C limit has a long history. It was in the 2009 Copenhagen Accord and was agreed to in the 2010 Cancun Agreements. The New Zealand Government has endorsed the Copenhagen Accord and the the 2 degrees C limit.

So the 2 degrees C limit can be described as the de facto goal of climate policy, or possibly the central pillar of climate policy a bit like the myth of the World Turtle on which the world of climate policy rests. But more about turtles later.

The alternative 1.5 degrees C limit was proposed in July 2009 before the 2009 Copenhagen Summit by AOSIS, the coalition of 42 of the world’s most vulnerable small island states as they considered a 2 degrees C limit would exceed a safe threshhold for their survival and protection.

At the 2009 Copenhagen Summit, the AOSIS countries were joined by the mainly African Least Developed Countries bloc in rejecting the 2 degrees C limit in favour of a 1.5 degrees C limit. Tuvalu unsuccessfully proposed to amend the UNFCC treaty to include the 1.5 degrees C limit.

At the 2010 Cancun UNFCCC convention, more than 100 countries or 70% of the UNFCCC members, mainly Least Developed Countries and the AOSIS countries, renewed the call for the 1.5 degrees C limit The Cancun Agreement included a review of the 2 degrees C limit with a view to changing to 1.5 degrees C. Even the UNFCCC's Christiana Figueres supports the 1.5 C limit.

Consequently the 2012 Doha UNFCCC meeting set up a Structured Expert Dialogue. This involved a series of meetings or dialogues between UNFCCC diplomats and selected Intergovernmental Panel on Climate Change (IPCC) authors. We will return to this 1.5 degrees C dialogue after a look at scientist's criticisms of the 2 degree C limit.

Climate scientists have disputed the scientific validity of the 2 degrees C limit. NASA's James Hansen says the 2 degrees C limit is not safe More specifically Hansen and co-authors said in a 2013 paper 'Cumulative emissions of 1000 GtC (billion tonnes carbon), sometimes associated with 2 degrees C global warming, would spur 'slow' feedbacks and eventual warming of 3 to 4 degrees C with disastrous consequences.'

In 2011, the Tyndall Center's Kevin Anderson gave a presentation called 'Going Beyond Dangerous Climate Change: Exploring the void between rhetoric and reality in reducing carbon emissions' (You-tube, audio, slides).

Anderson said the science behind the 2 degrees C limit was now a decade out of date and that 1 degrees C was the new 2 degrees C in terms of a boundary with 'dangerous' impacts. Anderson criticised his fellow climate scientists for giving a 'rose-tinted' framing of emissions pathways that were compatible with continued growth of GDP and the 2 degrees C limit.

More disturbingly, Anderson said the 2 degrees C limit didn't really matter any more as all realistic emissions pathways were now pointing to a 4 degrees C rise in average global temperature by 2100. See also this summary by David Roberts of Grist.

If a 4 degrees C rise in average global temperature was a taboo subject for a while Anderson shattered that idea by organising a 4 degrees C conference and a '4 degrees and beyond' edition of the Royal Society's journal Philosophical Transactions.

In 2012, Anderson gave the Cabot Institute Annual Lecture where he noted that almost all the current low emissions pathways compatible with the 2 degrees C limit included 'negative emissions' and bio-energy carbon capture and storage (BECCS).

Anderson said that these unproven geo-engineering technologies amounted to a 'Harry Potter magic wand' and that therefore most climate scientists were soft-selling the real difficulty of reducing greenhouse gas emissions sufficiently to avoid 2 degrees C of warming.

As we know, in 2013 and 2014 the three working reports of the Fifth Assessment Report of the International Panel on Climate Change (IPCC)) were published. These reports included a new set of global emissions reduction pathways, the representative concentration pathways (RCPs). There were only four pathways ranging from a (more or less) 'business as usual' scenario (4 to 6 degrees C by 2100) and down to the 'crash mitigation' pathway, Representative Concentration Pathway 2.6. That pathway is the only one consistent with the 2 degrees C limit.

The defined pathways have been replicated (repeatedly simulated) by different climate modelling groups on different climate models in order to provide likely outcomes (warming) expressed as probabilities. You know, median warming, warming between 90% confidence intervals or warming of no more than 2 degrees C above pre-industrial temperatures with a probability of 67%. It is these modelling exercises that are behind the IPCC's 1000 billion tonne carbon budget consistent with a 66% probability of staying within 2 degrees C of warming.

In the median RCP 2.6 scenario, GHG emissions from the world's energy system must become negative after 2070. Meaning that the world's energy system, currently some 35% of annual emissions, must operate so that it sequesters more carbon dioxide than it emits.

This means a massive world-wide roll-out of bio-energy carbon capture and storage - thermal biomass power plants allied with faultless carbon dioxide capture and storage in geological formations. The IPCC fifth assessment report included some 116 emissions pathways consistent with keeping warming below two degrees C. Almost all, 101 of 116 scenarios, rely on negative emissions after 2050.

A recent paper in the journal 'Nature' Betting on negative emissions, concluded that the IPCC was betting on unproven technology in relying so much on bio-energy with carbon capture and storage. At this point I must say I am starting to worry about the turtles supporting the pillar of climate change policy. One of the authors of that paper Glen Peters argues that only in computer models will negative emissions limit global warming to two degrees C.

So where does this depressing news leave the UNFCCC's review of the 2 degrees C limit? The Structured Expert Dialogue wrapped up only last month on 11 May 2015 in a 182 page report. Which I wouldn't download. A ten-page summary by Climate Analytics tells us that the expert dialogue report agrees with island states and the less developed countries that that 2 degree C is too high and that the 1.5 degree C goal would reduce risks.

A final pertinent point is made by one of the SED IPCC authors Petra Tschakert that

"a single-index of climate change risk inadequately capture(s)) the complexity of the climate system, it also poorly reflects locally experienced temperature increases and extremes and hence the large variation across regions and continents. No single person or any single species faces a global average."

Perhaps we can take heart from another recent paper in 'Nature', Energy system transformations for limiting end-of-century warming to below 1.5 degrees C that examines the technological feasibility of holding global warming to 1.5 degrees C. The paper concludes that yes 1.5 degrees C is feasible. It just needs a further halving of the already tight 21st century carbon budget and for negative emissions to be achieved some 10 to 20 years earlier than for the 2 degrees C scenarios.

Roll on the BECCS. Roll on some more turtles. If negative emissions and BECCS represent emissions reductions policy resting on a supportive mythical turtle then the claim of feasibility for holding warming to 1.5 degrees C is Turtles all the way down.

19 April 2015

Is it ‘doing our fair share’ to use creative accounting to meet the 2020 climate change target?

I look at how the National Government intends to use creative carbon accounting to ensure that New Zealand meets it’s 2020 climate change target (a five percent reduction from 1990) in spite of a projected trend of increasing emissions of greenhouse gases (GHG) to 2020.

On 10 April 2015, when he was releasing the latest inventory of greenhouse gases, the Minister for Climate Change Issues Tim Groser made this very confident statement about the NZ 2020 climate change target; “We’re well on track to meet our 2020 target"

That target is to reduce greenhouse gas emissions to five per cent below 1990 levels by 2020.

When this was announced in 2013 the ambition (-5%) of the target was criticised as useless, pathetic and inadequate.

The five percent reduction stands in stark contrast to the Ministry for the Environments projections of increasing emissions out to 2020. The Ministry estimates that the increase in gross (total) emissions in 2020 will be 29% above the 1990 baseline (from 60 to 77 million tonnes) and the increase in net emissions (gross less any increase in the stock of carbon stored in forests) to 2020 will be 130% (from 33 to 75 million tonnes). So why is Tim Groser so confident that the target will be achieved?

Simon Terry of the Sustainability Council has commented on the ‘kicking the can down the road’ features of the Government’s climate change policies: the mismatch between the emissions target and the predicted emissions, the absence of a credible plan or carbon budget approach and the deferring of liabilities into the future.

Taking Simon Terry’s work as a starting point, I am going to look at how the Government intends to apply the accounting rules for carbon credits to achieve the 2020 target in spite of the likely predicted increase in gross and net greenhouse gas emissions.

So how is NZ going to reduce emissions by five percent by 2020?

In December 2014, at the Lima, Peru, climate change conference, the New Zealand climate ambassador Jo Tyndall was asked that specific question. Her answer was that New Zealand plans to meet its 2020 target through a combination of;

  1. domestic emissions reductions,
  2. removal of carbon dioxide by forests,
  3. participation in international carbon markets and,
  4. recognising surplus achieved during the first commitment period of the Kyoto Protocol.

Domestic emissions reductions are unlikely. In 2013, Tim Groser told the Herald that his "strong advice" from officials was that the 2020 target could be met without any changes to settings of the NZ emissions trading scheme (ETS). The relevant Cabinet Paper for the 2020 target also states that the 2020 target can be met without changing policies or ETS costs. In other words, the NZ ETS will remain in its current induced coma, and stay ineffective in reducing domestic emissions.

NZ can’t meet the target by buying carbon credits from international carbon markets as access was blocked at the Doha meeting because we didn’t sign up to a formal Kyoto Protocol second commitment period target.

That leaves two ways of meeting the 2020 target; removal of carbon dioxide by forests, and recognising surplus units from the first commitment period of the Kyoto Protocol. I will look at the removal of carbon dioxide by forests next.

Forest carbon and Kyoto gross-net carbon accounting

By saying “removal of carbon dioxide by forests”, politicians and officials actually mean that carbon credits will be accounted for using the Kyoto Protocol’s gross-net forest carbon accounting rule. This sounds innocuous, if a bit sleep-inducing. It is in fact a method of creative accounting that NZ has already relied on to meet the 2008-2012 Kyoto first commitment period target.

The 'baseline’, 1990 emissions, is “gross” - the sum of all emissions without subtracting any “credit” for carbon absorbed into sinks such as growing forests and land use changes. The target (2008 to 2012) emissions are “net", as credits for carbon absorbed in growing forests are recognised and are subtracted from the gross emissions. This is called gross-net accounting. This makes the comparison between baseline and target inconsistent - it is not an “apples with apples” comparison.

I have blogged on this before but Professor Martin Manning, an IPCC author and formerly of the Climate Change Research Institute at Victoria University of Wellington, explained it better in 2012.

..achieving the Kyoto Protocol target can be quite misleading because it compares net emissions over the first commitment period, 2008 – 2012, with the gross emissions in 1990. If one compares the net emissions in 2012 with those for 1990, then the increase in NZ has actually been more than 100%.

The National Government intends to repeat this gross net accounting for the 2013 to 2020 target. As long as forest growth exceeds deforestation, this will allow both net and gross emissions to increase up to the quantity of carbon absorbed in forests that was ignored in the 1990 baseline.

The Climate Action Tracker website thinks the credit for carbon absorbed in forests could be up to 25 million tonnes CO2e a year and the ‘recognition’ (under Kyoto rules) of all the units would allow NZ gross emissions to increase up to 35% above the 1990 baseline.

Surplus Kyoto units from first Commitment Period 2008 - 2012

Jo Tyndall’s final method of achieving the 2020 target is to recognise surplus units from the first commitment period of the Kyoto Protocol. According to the latest Ministry for the Environment’s net position statement for the Kyoto Protocol, New Zealand will finish the first commitment period (2008-2012) with a surplus of 123.7 million units.

Even though New Zealand has no formal 2013-2020 Kyoto ‘commitment’, the Government intends to ‘carry over’ millions of these surplus Kyoto units to the 2013-2020 period in accordance with the Kyoto Protocol rules.

The carry-over rules are of course complicated, but I calculate that NZ will be able to ‘carry over’ almost all of them - 86 million units of the various types of units (see final paragraph - Appendix ‘Carry-over’ of Kyoto first period units).

What’s wrong with having a surplus of units? An effective emissions trading scheme with a real cap would never have surplus units. Units would be scarce and realistically priced. A surplus of units is of itself evidence of a failed implementation of cap and trade frameworks such as Kyoto and the EU ETS.

A surplus of units is one consequence of emissions trading with no cap, unlimited access to international carbon markets and over-allocation of units to industry and a rock-bottom unit price. Which is exactly what we have had with the NZ ETS.

We need to remind ourselves why NZ has a surplus of units for the Kyoto Protocol first period. Although net and gross emissions increased, NZ gained surplus units by using the gross-net forest carbon accounting rule and allowing the nearly unlimited import of low-priced international units with dubious integrity which were surrendered by ETS participants to match their emissions.

According to Climate Analytics, internationally, the Kyoto first commitment period ended with 14 billion surplus units; enough to allow all the signatory countries to “comply” with their 2020 targets without restricting business as usual emissions growth.

And this is exactly what the Government intends to do.

Each Kyoto unit carried forward will be counted towards NZ’s 2020 target and will allow an additional tonne of domestic GHG emissions above the 1990 baseline.

Similarly, each carbon credit recognised for carbon absorbed in forests between 2013 and 20120 will be counted towards NZ’s 2020 target and will allow an additional tonne of domestic GHG emissions above the 1990 baseline.

Conclusion

Our politicians and bureaucrats could have focused on policies to reduce domestic emissions to meet the 2020 target. Achieving the 2020 target won’t be an outcome of policies to reduce emissions. Like fixing the emissions trading system. It will be an outcome of the accounting rules chosen for the carbon credits the Government can hold. That’s called creative accounting.

Appendix “Carry-over” of Kyoto first period units

The Kyoto Protocol has “carry-over” rules for unused units at the end of the 2008 - 2012 first commitment period. Some surplus units may be 'carried over’ to the second commitment period and then be used to comply with a country’s official commitment. Although NZ has not taken up a Kyoto second period commitment, NZ none the less intends to mimic the application of Kyoto rules designed to carry over surplus units from CP1 to CP2.

NZ will have a surplus of 91million units after transferring 378 million units to a cancellation account for the 378 million tonnes of emissions between 2008 and 2012.

There are limits on which and how many units can be “carried over”. All assigned amount units (AAUs) can be carried over; forest removal units (RMUs) cannot be carried over, carry-over of Certified Emission Reduction units (CERS) and Emission Reduction Units (ERUs) are limited to 2.5% of New Zealand’s initial assigned amount or 7.7 million each. See the UNFCCC Reference Manual

The Government will probably prefer to retire units that cannot be carried over in order to maximise the number it may carry forward.

On that basis, all 72 million RMUs will be cancelled, 37.3 million CERs and 37.3 million ERUs will be cancelled, leaving 7.7 million each of CERs and ERUs carried forward. Then only 231.4 million AAUs need to be cancelled to make up to 378 million units.

The total carried over will be 86 million units composed of 7.7 million CERs, 7.7 million ERUs and 70.6 million AAUs.

16 March 2015

Does the NZ Emissions Trading Scheme affect retail petrol prices?

Of course, my title asks the wrong question. The more policy relevant question is "How much does the NZ Emissions Trading Scheme affect retail petrol prices?

The Ministry of Business Innovation & Employment has a page on weekly oil price monitoring and some week by week data on petrol prices. I made a R chart from that data.
Click on the image for a decent sized graphic.

The NZETS component of the NZ retail price of petrol pretty much just hugs the zero point on the vertical axis.

A note lower down the web page states "The costs associated with the ETS are provided by Hale & Twomey based on the prevailing carbon price from the New Zealand Carbon Market". So we need to note that this data is an estimate.

Over the four and a half years of the NZETS, the estimated NZETS component has ranged from a maximum of 2.4 cents per litre from late 2010 to June 2011 to a minimum of half a cent from July 2013 to December 2014.

As far back as 2007, the Labour Government predicted that petrol prices may rise up to 4 cents a litre possibly based on carbon price of $25 per tonne. From memory, the early 2011 price for a NZ unit was about $21 a tonne.

Wikimedia Commons has the R script I wrote for the chart (except it's a .svg file, not a .png).