TL;DR: A massive gap is opening up between the Climate Commission’s advice and the new Government’s actions on reducing emissions. Two large swathes of recommendations appear to gone unheard in the first months of decisions by the National-ACT-NZ First Government on (not) reducing emissions from transport.
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Two huge tracts of climate advice falling on deaf ears
The Climate Commission’s advice to the government on paths to achieving the country’s second Emissions Reduction Budget was released earlier this month and runs to 337 pages across 16 chapters, offering a plethora of policy levers to incentivise change, lower barriers and support investment in infrastructure.
But a massive gap has opened between the current Government’s position and the Commission’s advice. The new Government’s position is that carbon pricing, the removal of red tape on renewable energy, and expanded use of gas as a transition fuel can achieve the bulk of targeted emissions reductions.
It’s a common set of stories told to prolong the status quo for the benefit of the few, and at the cost of the many. A renewable energy transition has significant geo-political implications for the distribution of power and wealth, as AUT’s David Hall provides an excellent summary of here).
We witnessed a pushback at COP28 against industrial level gaslighting from vested interests, some 2700 of whom were apparently represented at COP28, in addition to the usual state-level fossil fuel interests.
Here are the four main stories used to misinform the public by obscuring or negating the most effective evidence on the paths needed to achieve emissions reduction targets:
natural gas is a beneficial bridging fuel that can assist countries to reduce emissions while ensuring energy security;
carbon capture and storage (CCS) or carbon capture and utilisation (CCU) can support the continued use of fossil fuels while reducing emissions and enabling a fair transition;
carbon pricing is a broadly sufficient policy tool for achieving net-zero emissions by 2050 in Aotearoa New Zealand; and
the removal of red tape will double renewable energy provision by 2050 in Aotearoa New Zealand.
The natural bridge narrative
According to a 2022 paper in the journal Nature:
“(Natural gas) is a fossil fuel with a significantly underestimated climate impact that hinders decarbonisation through carbon lock-in and stranded assets.”
While recommending efforts to reduce methane leaks across the entire fossil gas supply chain, the paper recommends changing the ‘bridge’ narrative to something that sets unambiguous decarbonisation criteria.
As reported by the Guardian, a group of countries including Australia, the US, UK and Japan demanded stronger language in the conference’s text document, saying that they would not be co-signatories to “death certificates” for small island states. They were speaking on behalf of the umbrella group of countries.
Several members of the umbrella group including the US, UK, Australia and New Zealand, intend to expand their own production of fossil gas in future decades, employing the ‘bridge’ narrative as justification. New Zealand’s Climate Change Minister Simon Watts has described fossil gas as a transition fuel.
The carbon capture and storage narrative
Decades of research into carbon capture and storage have shown the process to be more expensive and less efficient than hoped. As a result, the International Energy Agency (IEA) has used less of it in successive net-zero emissions (NZE) scenarios. Their 2023 NZE scenario uses 38% less CCS than their 2021 version, as explained in this Climate Analytics report.
“recent analysis has shown that a high-CCS pathway will be substantially more expensive, by about US $1 trillion more per year up to 2050 compared to a sustainable low-CCS pathway”
The IEA’s NZE scenario requires a steep and rapid downscaling of fossil fuel use, with a limited, although still heroic, use of CCS according to Ketan Joshi on LinkedIn:
Extensive use of CCS is both more expensive and less efficient than reducing fossil fuel use, but the technology is being heavily pushed by industry interests. Corporate dominance of CCS advocacy was revealed by this InfluenceMap analysis which identifies the degree to which it is out of alignment with IPCC advice. A similar effort is going into promoting extensive use of green hydrogen, but that is a story for another time.
The carbon price is sufficient narrative
The new National-led government has proposed that emissions pricing will fill the gaps created by cancelling the Government Investment in Decarbonising Industry (GIDI) fund and various other industry and transport policies. As covered by Eloise Gibson at RNZ, the Climate Change Commission’s advice to government makes it clear that the government does not have sufficient policies to cut greenhouse gas emissions and that pricing under the Emissions Trading Scheme (ETS) will not make up the difference.
The commission has long argued that while emissions pricing is necessary, it is not sufficient, with the ETS requiring a raft of complementary policies and tools to assist in meeting targets. The reasons were well explained in this article by David Hall in The Conversation back in 2021.
It is also the evidence-based position taken by Working Group III in the IPCC’s 2022 Mitigation report, which stated that while carbon pricing instruments have incentivised low-cost emissions reductions, they have been less effective at promoting the higher-cost measures that are necessary to achieve further reductions.
The notion that carbon pricing is a sufficient policy approach rests on an ideological position based on economic modelling that oversimplifies the real world and has long since been superseded by evidence from real-world experience.
Removing red tape narrative
The current government’s call to double renewable energy supply by 2050 is fully supported by the Climate Change Commission’s report. The decision to ditch the target of 100% renewable energy by 2030 is also broadly supported by industry leaders (see this KPMG report). However, while there is plenty of support to reduce barriers to consenting wind and solar farms, it is by no means considered a sufficient approach to achieve the stated objective.
More significant unaddressed barriers to market growth exist, including regulatory uncertainty and market failures that are related to the current market structure (MBIE has also reported on these issues). As Eloise Gibson reports for RNZ this week,
“Commission chairperson Rod Carr says the government has choices about how to meet the budget, but it needs to make the maths add up.
One of the main pieces will be electrification, he says. Carr says the government's commitment to electrifying transport and industry is real and important "but needs to go beyond fast charging for electric vehicles", given New Zealand needs to add the equivalent of two large wind farms a year. He says private investment won't flow into certain areas without regulatory certainty, for example on offshore wind turbines.”
Narratives that deliberately obscure the best paths to net-zero carbon emissions are a perpetual bug in climate policy discussions. Institutions like the IPCC and Aotearoa’s own Climate Change Commission have been established with the express purpose of providing the evidence basis for sound policy making. Unfortunately, their advice is not always aligned with the interests of the powerful, who fashion narratives to sway public discourse in their own favour.
The problem with credits
One good thing that emerged from COP28 was the failure to finalise negotiations for Article 6, once again. I thought this was near to being a done deal, but I’m happy to be wrong. There would have been substantial pressure on ‘holdout’ countries to cave in to a deal that opened the floodgates on carbon offset trading at COP28. This would have risked harm to many communities in developing countries, particularly indigenous communities, who are frequent targets of land grabs and whose livelihoods are often eroded as a result.
A failure to finalise the deal indicates that some countries are continuing to hold out for an arrangement with higher integrity, as discussed in this article by Carbon Market Watch.
This is potentially bad news for government finances back here in Aotearoa New Zealand, given that we are currently facing rising external obligations under the Paris Agreement as a result of insufficient domestic emissions reductions.
Bi-lateral arrangements under article 6.2 can still proceed, although there is a lack of transparency around proceedings, with countries forced to anticipate rules that might emerge from future negotiations. In addition, questions are already being raised about the true additionality of credits traded under the first of these arrangements between Switzerland and Thailand.
A yawning gap opens up between climate advice and Government action