Brian Fallow: Glimmers of hope on climate

NZ shouldn't rely too much on forestry to meet emissions targets, Simon Upton has warned. Photo / File

COMMENT:

Two grounds for tentative optimism about progress on climate change emerged this week.

One is today's agreement between the Government and an umbrella group of farmer organisations to work on how to transition to some form and degree of emissions pricing for the sector responsible for nearly half the country's greenhouse gas emissions.

The other is the National Party's moderate response — as expressed in its minority report — to the Climate Change Response (Zero Carbon) Amendment Bill as reported back by the environment select committee.

Today's announcements about a process for arriving at farm-level accountability for emissions and sinks include, by way of a backstop/threat, provision for the inclusion of farms as points of obligation in the emissions trading scheme in 2025, if agreement on an effective alternative pricing mechanism cannot be reached.

It is a strong incentive, as that would be a nightmare given that the ETS market is designed for a small number of large enterprises, not thousands of small ones.

In addition, the ETS is to be refurbished with a new provision for auctioning of units, a mechanism for managing upside price risk to replace the current $25 price ceiling, and enabling a price floor, to manage the downside risk for foresters.

Meanwhile, the zero carbon bill would enshrine in law a national target of net zero emissions by 2050 for the long-lived greenhouse gases, especially carbon dioxide and nitrous oxide, set up a process for arriving at five-yearly intermediate carbon budgets as stepping stones towards that goal, and establish an independent and expert Climate Change Commission to advise on how to get there and monitor progress.

All that — the essential stuff — seems to be common ground across Parliament.

The main bone of contention relates to the bill's mandating a target for reducing emissions of methane — a potent but short-lived greenhouse gas, largely belched by ruminant livestock — by 10 per cent by 2030 and between 24 and 47 per cent by 2050.

Parliamentary Commissioner for the Environment, Simon Upton. Photo / Supplied

Top of National's list of seven objections to the bill as reported back is that it wants the target for biological methane reduction to be recommended by the Climate Change Commission. It sees that as preferable to having a wide — and at the high end, scary — range carved into black-letter law at the outset of a regime whose entire point is to depoliticise climate policy as far as possible.

This is an eminently reasonable view. Unlike the long-lived gases which accumulate in the atmosphere, emissions of which have to go to zero, the extent and pace of reducing methane emissions is not something about which it is appropriate to be dogmatic at this point.

The provenance of the 24-47 per cent range is a report by the Intergovernmental Panel on Climate Change last year, on what it would take globally to limit warming to 1.5C above pre-industrial levels.

For agricultural methane emissions (which includes emissions from paddy rice cultivation) the "interquartile range" (or middle half of an even wider range of outcomes) from "illustrative model pathways" or scenarios which ensure we don't overshoot 1.5C, is a reduction of 11-30 per cent by 2030 and 24-47 per cent by 2050.

As an indication of how sweeping these estimates are, the same IPCC report also reckons that the area of land devoted to bio-energy crops world-wide by 2050 would have to be equivalent to between half and all of the land area of India (3.2 million square kilometres).

By contrast, a report commissioned by the Parliamentary Commissioner for the Environment, Simon Upton, from climate scientist Andy Reisinger, concluded that the reduction in New Zealand's methane emissions needed to secure no additional warming above 2016 levels would be between 10 and 22 per cent, with most of the reduction having to take place within the first few years if any short-term overshoot were to be avoided.

It would seem, then, that none of these numbers should be regarded as Holy Writ.
It might be wise to take a leaf from the book of the Reserve Bank Act. Parliament decided 30 years ago that New Zealand was to be become and remain a low-inflation economy.

The statutory objective was, and remains, "stability in the general level of prices."

Quantifying what price stability means is not in the legislation, however. It is delegated to a secondary instrument — previously the policy targets agreement between Finance Minister and governor and now the remit of the monetary policy committee.

The methane produced by livestock is a potent but short-lived greenhouse gas. Photo / File

The target has been revised from time to time, from an initial 0-2 per cent annual increase in the CPI to 1-3 per cent now with a focus on the mid-point. The changes have not been frequent or radical but they do respond to experience and changing economic circumstances and they do not require legislative amendments.

A similar balance between stability and flexibility would be helpful for the methane target.

Other changes sought by National are about strengthening what is already in the bill, like ensuring the commission takes account of economic impacts when providing its advice on targets and emissions reduction, and being mindful of the level of action being taken by other countries (given the free rider problems that bedevil the geopolitics of climate change).

The bill as reported back would tighten the ability to use international carbon credits in meeting targets.

But unfortunately, the select committee has not been swayed by Upton's warning about the risks of over-reliance on forestry offsets. Relying on expanding the area devoted to what is essentially an industrial crop, intended for harvest within 25 to 30 years, merely kicks the can down the road.

"The sheer availability of land for forest sinks, and relatively low costs of establishing them, could see forest planting become the default solution for a very long time. This would be at the cost of gross emission reductions," Upton said.

An even greater risk at this point is political: that both sides of Parliament retreat into partisan, tribal base-pandering at the expense of a durable architecture for dealing with climate change.

The United States and Australia both provide gruesome evidence of how hard it can be to escape from that trap.