Thought Leader

New Zealand in Paris: A lack of integrity.

Looking toward Paris from the vantage point of New Zealand, one issue lingers: integrity. Will the Paris Agreement be translated into genuine action? Will the world walk the talk?

It counts for something that the international community has declared its intention to keep global warming “well below 2°C”. But there’s an old adage in management theory that a target is not strategy. If pledges aren’t matched with practicable, concrete plans, then the Paris Agreement isn’t worth the carbon it’s written on (and that isn’t much at today’s prices).

Integrity is sorely lacking in New Zealand’s involvement at COP21.

Exhibit A is our 2030 emissions target, our INDC in wonk-speak. This was carefully calibrated to give the appearance of taking responsibility while evading responsibility wherever it could. It doesn’t set a feasible pathway to our 2050 target. It doesn’t include emissions from land use and forestry. It lacks plans to tackle our rapidly growing transport and industrial emissions. And it’s founded on the expectation that we’ll buy our way out of future obligations, rather than take responsibility now by reducing emissions and creating carbon sinks like permanent forests.

Exhibit B is our role in the Friends of Fossil Fuel Subsidy Reform. Of course, the general principles behind the alliance are admirable. Consumption subsidies, estimated at US$548 billion in 2013, distort the status of fossil fuels in the market, protecting them from changing preferences and competition from energy alternatives. When John Key delivered the Communiqué in Paris, he said: “The time for action, global action, on fossil fuel subsidies is now.” What could go wrong?

New Zealand was promptly accused of hypocrisy, awarded a Fossil of the Day award on account of a 2013 WWF report that put New Zealand’s fossil fuels subsidies at NZ$80 million. The government countered by citing a 2015 APEC report on fossil fuels subsidies that appeared to clear New Zealand of fault. Why the conflicting views?

The devil is in the detail. The WWF report uses the World Trade Organization’s definition of subsidies. The APEC report, however, focuses on “inefficient subsidies that encourages wasteful consumption”. It’s this narrower subset of subsidies—not subsidies normally defined—that New Zealand is cleared of providing.

The FFFSR Communiqué uses the same qualified language, calling on countries to “eliminate inefficient fossil fuel subsidies”. But “inefficient” at what? It certainly makes no difference to our atmosphere whether subsidies are inefficient or efficient—either might result in fossil fuel being burnt. And perhaps it’s the efficient subsidies we should be most worried about, if “efficient” means that they’re successful in attracting further exploration.

It all points, again, to the problem of integrity. Our government has cultivated a strategy of calling apples oranges, which works remarkably well domestically. But in the international arena, populated by well-resourced NGOs and governments that genuinely want a low-emissions world, this fudging is bound to be exposed for what it is. As one local commentator says, our role in climate politics has slipped from “from leaders to dissemblers”.

New Zealand has become like the kid who skives off from team duties, always armed with an unimpeachable alibi. Whenever a weekend fundraiser is on, he’s conveniently out of town. Whenever the cones need picking up, he’s out of sight. He always gets what he wants, clever as he is, but he finds increasingly that he can’t get what he needs. No one passes him the ball. No pats on the back from Coach. No invites to the weekend social. Soon, he isn’t just relegated to the sidelines, he’s stuck in the stands, not because he can’t play, but because no one wants to play with him. He’s clever alright—but too clever by half.

This is the essence of New Zealand’s position on climate change: we cut corners, we mask liabilities, and we evade responsibility.

For those of us expecting to be living in New Zealand over the next few decades, we’re being set up for future embarrassment and future expenses due to missed opportunities and costly carbon offsets (more on that below).

It doesn’t need to be like this.

One strand of integrity in New Zealand’s response is its investment of NZ$20 million over four years in the Global Research Alliance on Agricultural Greenhouse Gases. Some will say the amount is paltry, but the principle is absolutely right: that we lead on issues that affect us most.

We shouldn’t be a “fast follower” on climate change. We should instead be a canny leader—that is, we should follow where we must, but lead wherever we can.

And agriculture isn’t the only area we could lead on. What about forestry? The Ministry of Primary Industries already recognises 1.1 million hectares of erosion-prone marginal land that should be converted to forest. If we were to plant that in native bush tomorrow, we’d be sequestering an average of 9 million tonnes of CO2 annually up to 2050, as well as enjoying co-benefits like erosion prevention and improved water quality. Why not pin our ears back and go for it? If the money is lacking, the government could use its financial acumen to attract capital through the “green bonds” market, which this year saw over US$40 billion issued. Given that a renewed commitment to green bonds was given in Paris by global investors representing over US$1.2 trillion, why not chase these opportunities as aggressively as fossil fuel exploration was chased?

Despite the rhetoric otherwise, domestic solutions are plainly available. We’ll hear more about these in coming months during the Emissions Trading Scheme review, as non-government organisations—like Motu and the Royal Society of New Zealand—pick up the slack left by government.

The only obstacles are political. It’s a question of responsibility, leadership, and integrity.

***

Before negotiations began, I posted “Ten Things to Watch for at COP21”. Here’s how they panned out…

1: Will we get a collective long-term goal?

Against the odds, world leaders agreed to a collective goal: to hold “the increase of the global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.”

However, a feature of a well-crafted target is that it is timebound. On this, the Paris Agreement is conspicuously vague. Article 4 aspires “to reach global peaking of greenhouse gas emissions as soon as possible”. It later specifies that countries should “achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouses gases in the second half of this century.” So, the strongest commitment is net zero global emissions by 2050.

This is already far more demanding than New Zealand’s 2050 target, which is to reduce net emissions to 50% below 1990 levels by 2050. That’s around 33.4 million tonnes of CO2e annually. For the remaining 33.4 million tonnes, we’ll need to find a country that has more carbon sinks than emissions to provide us with offsets. Fingers crossed!

Article 6 of the Paris Agreement does allow for “the use of internationally transferred migration outcomes”—so carbon offsetting is at least permissible. But it is likely to be costly. If we follow Synapse Energy Economics’ prediction of a carbon price of between US$45–120 in 2050, this translates to between NZ$2.2 and NZ$6 billion annually for carbon offsets. Of course, there are all sorts of uncertainties in play—on carbon price, on exchange rates, on whether we can even achieve this humble 2050 target. But whatever way you look at it, this is a major financial risk to impose willingly upon your grandchildren.

2: Will national targets establish themselves as the new lever for international action?

The sum of the world’s national pledges, or INDCs, is not as demanding as the collective long-term goals in the Paris Agreement. Even if countries fulfil their 2030 targets, it’s been estimated that this will take us to 2.7°C above pre-industrial levels by the end of the century. If everyone “fast-followed” New Zealand, we’d end up around 3–4°C.

Accordingly, the Paris Agreement declares that, in 2018, there will a “facilitative dialogue… to take stock of the collective efforts of Parties” and “to provide a special report… on the impact of warming of 1.5°C.” These meetings will occur every five years. The Agreement also “requests” that countries “communicate or update” their pledges: the hint of a ratcheting mechanism. In the context of the collective goal, this will serve as an opportunity to shame and bully free-riders. Such manoeuvering is to be expected, because it isn’t in the interests of committed governments to carry the can for noncommittal governments.

3: What will the process of review be for INDCs?

Article 13 fleshes out the review process, admittedly only vaguely. The text is at pains to recognise the limited capacity for developing countries and small island states to measure and report on their emissions—a major technical undertaking. Nevertheless, the Agreement calls for a “transparency framework” that functions in “a facilitative, non-intrusive, non-punitive manner, respectful of national sovereignty”. All in all, it conjures up an analogy with UN weapons inspectors—with all the obvious pros (i.e. neutrality, respectability) and cons (i.e. toothlessness, ignorability).

4: How binding will the agreement be?

As I wrote last fortnight, international agreements are multi-faceted beasts with varying degrees of bindingness. You have to ask what bit is binding, and how binding it is.

The crucial word “shall” is missing from the collective goal. Instead, Article 2 “aims to strengthen the global response”, which suggests a collective resolve rather than a collective duty. This was possibly necessary to avoid running the Republican-dominated gauntlet of the US Senate. Similarly, the setting of emissions targets for individual countries are not binding either. Other elements—transparency and reporting requirements, climate finance, mitigation—are binding.

To be enforced, however, the Paris Agreement must first be ratified by at least 55 countries representing at least 55 per cent of global greenhouse gas emissions. Until then, the Agreement’s power is that the writing’s on the wall.    

5: What are we going to call this thing?

The text calls itself “the Paris Agreement”. Presumably, that label will stick.

6: How much integrity do targets have?

The Paris Agreement “invites” and “requests” countries to formulate long-term transition plans to low-emission economies. Meanwhile, Article 4(2) says: “Parties shall pursue domestic mitigation measures with the aim of achieving the objectives of such contributions.” This is stronger than expected—the “shall” establishes its bindingness—but it’s hard to predict how much legal work this could do. Consider how cleverly the New Zealand government dresses up business-as-usual in the frills of ambition. A case in point is its management of the Emissions Trading Scheme. It would be very difficult to establish that the ETS’s failure to create a carbon price was foreseeable, not only the consequence of unexpected or extrinsic influences.

7: Will the Green Climate Fund be made more binding?

No—the $100 billion annual fund for mitigation and implementation is mentioned only in terms of intention, to be established as a floor for a more ambitious funding target in 2025. It’s likely that, in the course of negotiation, ambitions were loosened on finance to tighten commitments to the collective long-term goal.

However, there is a more general but binding obligation on developed countries to provide “financial resources” for “mitigation and adaptation”. This is legally binding for developed countries, and encouraged on a voluntary basis for others. New Zealand’s pledge to provide up to $200 million over the next four years, mostly to Pacific nations, is in line with this demand.

8: Will land use, land use change, and forestry (LULUCF) get a mention?

No—there’s no explicit mention of LULUCF. However, its role is implicit in Article 4’s aim “to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases”. Forestry will be the primary carbon sink in the short-term, because, as a recent University of Oxford report puts it, trees are not only a kind of negative emissions technology (NET), they are also a “no regrets” NET, a carbon sink that is less risky and less costly than geoengineering. But the Paris Agreement, by mentioning only “removals by sinks”, also keeps the door open to other NETs, including carbon-capture-and-storage.

9: Will the Paris text incorporate distinctions among greenhouse gases?

No—there is no differentiation of methane vis-à-vis other greenhouse gases. This means that agricultural methane (48% of New Zealand’s greenhouse gas emissions) will continue to count against us at the international level, even though it still doesn’t count in our Emissions Trading Scheme, our principal policy response to climate change.

However, a relevant addition to the Paris Agreement is its recognition of “the fundamental priority of safeguarding food security”. It is stated elsewhere that adaptation, resilience, and “low greenhouse gas emissions development” should be implemented “in a manner that does not threaten food production”.

As the UN’s Food and Agriculture Organization has noted, this is a first. It signals that regulators shouldn’t compromise food security when lowering emissions—an important moral stance in an age of global poverty. Given how vague these directives are, though, it cannot yet be said if they will create loopholes for agricultural emissions. It also isn’t obvious whether any such qualifications should apply to export markets like New Zealand’s, rather than subsistence economies with genuine food scarcity.

10: Will there be substantial efforts to prepare for climate-change induced migration?

After slipping in and out of draft texts, the so-called “climate change displacement coordination facility” didn’t make it into the final agreement. There is, however, a section on Loss and Damages that calls for the creation of a task force “to develop recommendations for integrated approaches to avert, minimize and address displacement related to the adverse impacts of climate change”. That’s a step forward in recognition of the issue—but amounts to little more than a research exercise.

About the author

Dr David Hall

Dr David Hall

David Hall is Senior Researcher at The Policy Observatory at AUT. He has a D.Phil in Politics from the University of Oxford and has written for the New Zealand Listener, The Journal for Urgent Writing, and the BWB Text series (forthcoming).

8 Comments

  • Kia ora, Great article.

    The other way of looking at the subsidies is that the PM was calling for getting rid of consumer fossil fuel subsidies instead of addressing producer subsidies but according to MBIE NZ has only 1 consumer subsidy and that is the rebate to farmers and vessels on fuel costs (which it is argued is made because neither use roads – http://www.mbie.govt.nz/info-services/sectors-industries/energy/international-relationships/pdf-document-library/peer-review-fossil-fuel-subsidy-reforms-nz.pdf). The rebate is 3 – 4% of the 1.5bn excise charged so about $50M/annum. The consumer subsidies though significant worldwide are mainly made to poor people – winter fuel payments and subsidies to cooking fuel for example – and they pale into insignificance when compared with producer side subsidies. Consumer subsidies are probably about 6% of the total. I did a bit of a background on this here in case that is useful. http://www.publicgood.org.nz/2015/12/15/having-fun-with-consumer-subsidisation-of-fossil-fuels/

  • Congrats and thank you for your wise writing. The cynical play by the Key government to avoid real climate action is a disgrace and betrayal of responsible government , however you have not mentioned the worst gaming orchestrated by Keys Hovernment, namely the transformation of NZ,s fledgling ETS into a money laundering pollution pays scheme , a rort whereby bogus ERUs from Russia and Ukraine were allowed to flood the market, And were used by NZ emitters to meet their surrender obligations at about 20 cents a unit, allowing them to pocket the equivalent number of NZUs , resulting in the current surplus of c. 140 million NZUs , which will be used to keep prices down to meaningless levels, so all in all NZ has cheated the environment, a pretend action, and profoundly dishonest.

    Just one correction, your indigenous forest sequrestion rates for the 1.1 M ha of erosion prone land are 2x higher than what they wld in reality be. Much as we love our natives, there is serious sequrestion work to be done. The reality is natives are very expensive to establish and grow very slowly. The sequestration cost per tonne of carbon for natives is typically > $100/tonne.

    • Hi Mark, thanks for your comments (and sorry for the slow response!) In regards to your first point, there’s unfortunately always a balance to be struck between brevity and a full description of this enormously complicated policy instrument.

      As for the second point, it’d be good to talk further about sequestration rates. I used the ETS look-up tables supplied by Ministry for Primary Industries, so if they’re that far off, that’s interesting in itself. Otherwise, the official look-up tables say that over 35 years (from 2015 to 2050), the sequestration rate is 286.5 tonnes of carbon dioxide per hectare. At 1.1 million hectares, that’s 315.15 million tonnes of carbon dioxide, which, divided by 35 years, makes for an average annual rate of 9 million tonnes. It’s all very hypothetical, back-of-the-napkin stuff, of course (not least the impossible feat of planting 1.1 million hectares “tomorrow”!) but I would’ve expected that estimate to be sound enough for argument’s sake.

  • A cracking piece David. I couldn’t agree with you more and for the life of me I cannot work out why. To whose advantage is this position being supported and even if the normal villains are identified there is just no way that their meagre advantage will be of sufficient value to make up for the value destroyed and loss of reputation our nation will suffer from being such creepy wimps. Our transition to a true low carbon economy is one of the easiest pathways of any developed country. It’s a natural advantage that we seem politically determined to ignore. Appalling leadership, total lack of vision and so contrary to the prevailing zeitgeist. We could have lead the way here – now we will be relegated, in fact probably already have been relegated to the ranks of the dullards, the luddites and the uninspired. Those old and grey-before-their-time white men of government may be clever enough to con the insipid, disinterested domestic electorate but they are being laughed at internationally. Embarrassing and a(nother) wasted opportunity.

  • Excellent article. We need more of these articles in the NZ media–revealing the apples-to-oranges inconsistencies of the current government rhetoric–so that people are on the lookout for these sneaky strategies.

  • The change should be from the bottom as well as from the top, when consumers comprehend the impact of and reduce or cease consumption of polluting products for the sake of both ethics and environment. If they don’t and just put their feet up expecting everything to take care of itself and leave it to the government, then they will have just endure whatever is to follow, according to the “we’ll worry about it when it happens” mentality.

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