Vivid pointers for a brighter future

Any pathway to reducing the country’s domestic emissions will involve substantial change to patterns of energy supply and use, according to a recent authoritative report by Vivid Economics

Moving towards a 100 per cent renewables grid and substantial electrification of the passenger vehicle fleet and low-grade heat is a major measure outlined in the Net Zero in New Zealand: Scenarios to achieve domestics emissions neutrality in the second half of the century survey commissioned by Globe (Global Legislators of a Balanced Environment) NZ – a cross-party group of 35 members of Parliament.

The study had three objectives:

• to build a shared understanding of the available data and evidence on abatement, costs and co-benefits associated with reducing emissions in New Zealand, as well as the priorities for new research
• to construct an indicative understanding of alternative 2050 scenarios for New Zealand’s transformation towards a low-emission economy
• to identify strategic implications, key decisions and challenges faced by New Zealand, including barriers to the attainment of abatement in each sector of the New Zealand economy (recognising that much more detailed policy elaboration will be required in future).

The study’s defined scope was informed by the Paris Agreement goals to hold the increase in global average temperature to well below 2°C and to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century.

The report focused on domestic opportunities, ignoring New Zealand’s global responsibilities, didn’t assess any evidence other than that publicly available and didn’t include international aviation and shipping.

Authors John Ward and Alex Kazaglis posited three scenarios that varied by the adoption of low-emissions technologies and patterns of land use:

• Off Track New Zealand – the country largely focuses on exploiting these low-cost emission-reduction opportunities, but does not significantly alter its land-use patterns
• Innovative New Zealand – emissions are further reduced through technological advances such as cost reductions in electric vehicles for freight; electric heating technologies for high temperature applications; and a vaccine to reduce methane emissions from pastoral agriculture accompanied by a structural shift away from pastoral agriculture to a diverse range of land uses including horticulture and crops, alongside extensive afforestation
• Resourceful New Zealand – decarbonisation of the energy sector beyond that in Off Track is not pursued because global technological development does not progress rapidly meaning significant afforestation is required to offset residual emissions, and plantation forests expand by 1.6 million hectares by 2050.

The scenario analysis provides five important insights:

1. All pathways include a move towards a 100 per cent renewables grid and substantial electrification of the passenger vehicle fleet and low-grade heat.
2. It is possible for New Zealand to move onto a pathway consistent with domestic net zero emissions in the second half of the century, but only if it alters its land-use patterns.
3. There is a choice between the extent to which it is able to make use of new technologies and the extent to which it needs to embark upon substantial afforestation. With some constraints, there will be an opportunity to flexibly adjust the rate of afforestation as the pace of new technological development and deployment becomes clearer.
4. If it chooses to substantially afforest and it is fortunate enough to benefit from the extensive availability of new technologies, it could be possible for the country to achieve domestic net zero emissions by 2050.
5. Although afforestation will likely be an important element of any strategy to move to a net zero emissions trajectory in the period to 2050, in the second half of the century alternative strategies will be needed.

From which the authors derive nine policy recommendations:

1. The New Zealand government should develop a trajectory for emissions price policy values consistent with the objectives of the Paris Agreement.

2. A robust, predictable emissions price is vital in encouraging the private sector to make investments consistent with a low-emissions future. In scenarios that envisage substantial land-use change, the extension of the emission price to biological emissions can facilitate land use decisions that take account of the emission implications of that use.

3. The emissions price needs to be accompanied by changed market and regulatory arrangements, infrastructure deployment mechanisms, and specific support to address a range of additional barriers and market failures.

4. New Zealand might contribute further to global low emission R&D efforts , particularly in areas where it offers comparatively strong expertise, advantages and needs. Options for collaborative research and experimentation across government, business and research institutions should be explored.

5. Political parties should actively seek to identify and articulate areas of common agreement on climate policy in order to enhance policy coherence and predictability, while allowing room for an informed debate and party difference over policy design.

6. Independent institutions, backed by statute, can help assist both the Parliament and government in developing coherent national climate policy, and enhance informed citizen engagement.

7. Policy-making should adopt a holistic approach, including both economic and cultural interests. All stakeholder groups should be taken account of in policy design, including a process of meaningful consultation with iwi and hapū, as per the Treaty of Waitangi’s principle of partnership, to acknowledge their interests and aspirations.
8. There is a need to upgrade the evidence base to support New Zealand’s low emissions pathway planning. The most acute need is for one or a series of energy- and land-system modelling tool(s) that generate bottom-up estimates of abatement opportunities and costs, and that take account of the interactions between sectors.
9. A particularly important area for further research and policy development is understanding and addressing the distributional implications of differing low-emissions scenarios, and the policy responses that might help alleviate any concerns.