Showing posts with label Climate Change Commission. Show all posts
Showing posts with label Climate Change Commission. Show all posts

06 June 2023

The unbearable annual updates to the NZ ETS auction volume limits and price control settings for units 2023

The Ministry for the Environment is running a consultation on the utterly incomprehensible Annual updates to the NZ ETS limits and price control settings for units 2023.

There is a very dense 56 page consultation paper Ministry for the Environment. 2023. Annual updates to New Zealand Emissions Trading Scheme limits and price control settings for units 2023: Consultation document. Wellington: Ministry for the Environment..

This is based on another annual round of dense advice over 64 pages from the Climate Change Commission Advice on NZ ETS unit limits and price control settings for 2024-2028

I wrote a submission today. Due to the density of the reports, and the way Ministry for the Environment framed the 24 compulsory questions, it was really hard. Submissions close on 16 June 2023.

I can however try to summarise it in three charts.

The Climate Change Commission wants the Government to reduce the number of emission units it auctions from 2026 to 2028.

The Climate Change Commission wants the Government to increase the minimum price for emission units in the auctions from 2026 to 2028.

The Climate Change Commission wants the Government to increase the cost containment reserve 'maximum price' for emission units in the auctions from 2026 to 2028.

I am guessing that a Chris Hipkins led Labour Government is probably going to try to ignore the Commission's recomendations.

Russell McVeagh have the best short summary of the issues: Climate Change Commission urges Government to reduce ETS unit supply and raise trigger prices.

09 May 2022

Aotearoa sets course to net-zero with first three emissions budgets which are simply underwhelming

James Shaw announced today announced today the five-year emissions budgets for 2022 to 2035 in a media statement Aotearoa sets course to net-zero with first three emissions budgets.

The emissions budgets are;

  • 2022–2025: 290 million tonnes
  • 2026–2030: 305 million tonnes
  • 2031–2035: 240 million tonnes

So I put the emissions budgets and their annual equivalents on a graph along with the latest actual gross and net emissions from the Greenhouse Gas Inventory from 1990 up to 2020.

Did you notice in his statement James Shaw only uses the word 'emissions'? He does not specify if he means gross emissions or net emissions.

Under the Climate Change Response Act the emissions budgets are expressly defined as net emissions. However, there is a conflicting section in the Act stating that the Climate Change Commission may advise the Government on "the rules that will apply to measure progress towards meeting emissions budgets" This was one of the issues the Lawyers For Climate Change Action raised in their recent judicial review of the Commissions advice.

If we take the 2022 to 2025 budget of 290 million tonnes of net emissions and divide by four year we get 72 million tonnes for budget 2025. Comparing the 72 million tonnes of net emissions with 2020's 55.5 million tonnes that is a whopping great increase on 2020 net emissions of 16.5 million tonnes or thirty percent!

If we take the 2031 to 2035 budget of 240 million tonnes of net emissions and divide by five we get 48 million tonnes for 2035. Comparing the 48 million tonnes of net emissions with 1990's 44 million tonnes, that is still an increase on 1990 net emissions of nine percent!

So the three emissions budgets don't even represent reductions in emissions against any historic actual emissions baseline. I find the ambition of these five year budgets utterly underwhelming

10 February 2021

Summary of the Climate Change Commission's emissions budgets and policy '2021 Draft Advice for Consultation'

He Pou a Rangi/Climate Change Commission's report 2021 Draft Advice in graphics.

I mentioned the He Pou a Rangi/Climate Change Commission's report 2021 Draft Advice for Consultation" published on 31 January 2021 to my millenial colleague.

She asked if it has infographics?

Yes it does and hopefully they can help assist in providing a summary without anyone having to read either the 188 pages of the advice document or the hundreds of pages of the supporting evidence chapters.

First thing, let's get the citation right. "2021 Draft Advice for Consultation", He Pou a Rangi/Climate Change Commission, 31 January 2021.

It is a draft for public consultation until 14 March 2021. The report recommends three 5-year greenhouse gas emissions budgets to 2035 (and relevant policy) to the Government. To be finalised after submissions by 31 May 2021. The Government has to respond to it by 31 December 2021. So it will take all year.

The report adopts the Zero Carbon Act's approach of having a separate target for biogenic methane. Which is basically all of New Zealand's emissions from pastoral agriculture.

For the 'long-lived' gases (excluding methane from agriculture and waste), they recommend three 5-year emissions budgets out to 2035 and lots of policies to achieve them. The budgets mean a 26% decline in gross gases (excluding methane) and a decline of 36% in net gases (excluding methane) by 2035 from 2018. The ten percent difference being offset by exotic forestry carbon sequestration.

For 'short-lived' gases (agricultural methane plus waste methane), they recommend three separate 5-year emissions budgets to 2035. These represent less ambitious reductions in emissions - minus 16% to 2035 from the 2018 baseline

The summary 5-year budgets are to put Aotearoa on a path to 'net zero carbon' emissions by 2050. Absolute carbon emissions in 2050 will be millions of tonnes but they will be 'offset' to 'net zero' by forests storing carbon. There will be another round of three 5-year budgets for 2035 to 2050 to sort out the exact trajectory.

The forecast emissions pathways show a major decrease in transport emissions, modest decreases in agriculture and industry emissions, and major increases in carbon stored in forests.

The Commission have two emissions 'scenarios' to 2050; optimistic 'tailwind' and pessimistic 'headwind'. Both lead to net zero carbon by 2050.

For electricity generation, coal and oil have to be gone by 2030, gas is to be minimised, and wind generation increased a lot.

For food processing energy, coal is gone by 2035, diesel is squeezed, gas is halved and electricity and biomass generation are increased a lot.

For the dairy sector, methane emissions decrease marginally, milk fat production is stable, stock numbers drop very slightly through efficiency gains for each unit of dry feed. But - the Commission doesn't seem to know if dairying should be in the emissions trading scheme. Their recommendation to the Government is "Review regulatory regimes". This is very vague. A kick-for-touch response.

The whole point of having the Commission as an independent Crown agency is that it can make "free and frank" recommendations about applying politically sensitive policies such as carbon pricing to politically sensitive sectors such as the dairy industry. I find this quite disappointing.

For sheep and beef, methane decreases, meat production increases slightly, stock numbers drop through efficiency gains. But, again, the Commission doesn't seem to know if sheep and beef should be in the emissions trading scheme. They say "Review regulatory regimes". This is again a bit disappointing and a vague kick-for-touch.

Finally, James Shaw had asked the Commission how should Aotearoa's 2030 emission reduction target under the Paris Agreement work?

It's 30% below 2005 levels by 2030. The Commission says the target could be more stringent than the 5-year emissions budgets because credible international carbon credits could be imported. 'Credible' credits, they have to say that to distinguish them from the fake and fraudulent Russian and Ukrainian credits imported from 2013 as noted by the Morgan Foundation.

At the moment, there is no operative international carbon market. It also seems unlikely to happen under the Paris Agreement. The 'net zero by 2050' target incentivises countries to hold on to domestic carbon removals for offsetting their most emission intensive sectors. Any international sales (such as to Aotearoa) would only happen once domestic demand is met. A reliable credible supply of credits seems either unlikely to eventuate or alternatively be extremely expensive.