Negotiators at the COP29 climate conference in Baku have struck a landmark agreement on rules governing the global trade of carbon credits, bringing to a close almost a decade of debate over the controversial scheme.
The deal paves the way for a system in which countries or companies buy credits for removing or reducing greenhouse gas emissions elsewhere in the world, then count the reductions as part of their own climate efforts.
Some have argued the agreement provides crucial certainty to countries and companies trying to reach net-zero through carbon trading, and will harness billions of dollars for environmental projects.
However, the rules contain several serious flaws that years of debate have failed to fix. It means the system may essentially give countries and companies permissions to keep polluting.
What is carbon offsetting?
Carbon trading is a system where countries, companies or other entities buy or sell “credits”, or permits, that allow the buyer to offset the greenhouse gas emissions they produce.
For example, an energy company in Australia that produces carbon emissions by burning coal may, in theory, offset their impact by buying credits from a company in Indonesia that removes carbon by planting trees.
Other carbon removal activities include renewable energy projects, and projects that retain vegetation rather than cutting it down.
The relevant part of the deal is known as “Article 6”. It sets the rules for a global carbon market, supervised by the United Nations, which would be open to companies as well as countries. Article 6 also includes trade of carbon credits directly between countries, which has begun operating even while rules were still being finalised.
Rules for carbon trading are notoriously complex and difficult to negotiate. But they are important to ensure a scheme reduces greenhouse gas emissions in reality, not just on paper.
A long history of debate
Over the past few years, annual COP meetings made some progress on advancing the carbon trading rules.
For example, COP26 in Glasgow, held in 2021, established an independent supervisory body. It was also tasked with other responsibilities such as recommending standards for carbon removal and methods to guide the issuing, reporting and monitoring of carbon credits.
But the recommendations were rejected at COP meetings in 2022 and 2023 because many countries viewed them as weak and lacking a scientific basis.
At a meeting in October this year, the supervisory body published its recommendations as “internal standards” and so bypassed the COP approval process.
At this year’s COP in Baku, the Azerbaijani hosts rushed through adoption of the standards on day one, prompting claims proper process had not been followed
For the remaining two weeks of the conference, negotiators worked to further develop the rules. A final decision was adopted over the weekend, but has attracted criticism.
For example, the Climate Land Ambition and Rights Alliance says the rules risk “double counting” – which means two carbon credits are issued for only one unit of emissions reduction. It also claims the rules fail to prevent harm to communities – which can occur when, say, Indigenous Peoples are prevented from accessing land where tree-planting or other carbon-storage projects are occurring.
Getting to grips with carbon removal
The new agreement, known formally as the Paris Agreement Trading Mechanism, is fraught with other problems. Most obvious is the detail around carbon removals.
Take, for example, the earlier scenario of a coal-burning company in Australia offsetting emissions by buying credits from a tree-planting company in Indonesia. For the climate to benefit, the carbon stored in the trees should remain there as long as the emissions produced from the company’s burning of coal remains in the atmosphere.
But, carbon storage in soils and forests is considered temporary. To be considered permanent, carbon must be stored geologically (injected into underground rock formations).
The final rules agreed to at Baku, however, fail to stipulate the time periods or minimum standards for “durable” carbon storage.
Temporary carbon removal into land and forests should not be used to offset fossil fuel emissions, which stay in the atmosphere for millennia. Yet governments are already over-relying on such methods to achieve their Paris commitments. The weak new rules only exacerbate this problem.
To make matters worse, in 2023, almost no carbon was absorbed by Earth’s forests or soils, because the warming climate increased the intensity of drought and wildfires.
This trend raises questions about schemes that depend on these natural systems to capture and store carbon.
Temporary carbon removal into land and forests should not be used to offset fossil fuel emissions.
What next?
Countries already can, and do, trade carbon credits under the Paris Agreement. Centralised trading will occur under the new scheme once the United Nations sets up a registry, expected next year.
Under the new scheme, Australia should rule out buying credits for land-based offsets (such as in forests and soil) to compensate for long-lasting emissions from the energy and industry sectors.
Australia should also revise its national carbon trading scheme along the same lines.
We could also set a precedent by establishing a framework that treats carbon removals as a complement — not a substitute — for emissions reduction.
Record breaking fossil fuel production, all time high greenhouse gas emissions and extreme temperatures. Like the proverbial frog in the heating pan of water, we refuse to respond to the climate and ecological crisis with any sense of urgency. Under such circumstances, claims from some that global warming can still be limited to no more than 1.5°C take on a surreal quality.
For example, at the start of 2023’s international climate negotiations in Dubai, conference president, Sultan Al Jaber, boldly stated that 1.5°C was his goal and that his presidency would be guided by a “deep sense of urgency” to limit global temperatures to 1.5°C. He made such lofty promises while planning a massive increase in oil and gas production as CEO of the Abu Dhabi National Oil Company.
We should not be surprised to see such behaviour from the head of a fossil fuel company. But Al Jaber is not an outlier. Scratch at the surface of almost any net zero pledge or policy that claims to be aligned with the 1.5°C goal of the landmark 2015 Paris agreement and you will reveal the same sort of reasoning: we can avoid dangerous climate change without actually doing what this demands – which is to rapidly reduce greenhouse gas emissions from industry, transport, energy (70% of total) and food systems (30% of total), while ramping up energy efficiency.
This is also not surprising given that net zero and even the Paris agreement have been built around the perceived need to keep burning fossil fuels, at least in the short term. Not do so would threaten economic growth, given that fossil fuels still supply over 80% of total global energy. The trillions of dollars of fossil fuel assets at risk with rapid decarbonisation have also served as powerful brakes on climate action.
Overshoot
The way to understand this doublethink: that we can avoid dangerous climate change while continuing to burn fossil fuels – is that it relies on the concept of overshoot. The promise is that we can overshoot past any amount of warming, with the deployment of planetary-scale carbon dioxide removal dragging temperatures back down by the end of the century.
This not only cripples any attempt to limit warming to 1.5°C, but risks catastrophic levels of climate change as it locks us in to energy and material-intensive solutions which for the most part exist only on paper.
To argue that we can safely overshoot 1.5°C, or any amount of warming, is saying the quiet bit out loud: we simply don’t care about the increasing amount of suffering and deaths that will be caused while the recovery is worked on.
This article is part of Conversation Insights. Our co-editors commission long-form journalism, working with academics from many different backgrounds who are engaged in projects aimed at tackling societal and scientific challenges.
A key element of overshoot is carbon dioxide removal. This is essentially a time machine – we are told we can turn back the clock of decades of delay by sucking carbon dioxide directly out of the atmosphere. We don’t need rapid decarbonisation now, because in the future we will be able to take back those carbon emissions. If or when that doesn’t work, we are led to believe that even more outlandish geoengineering approaches such as spraying sulphurous compounds into the high atmosphere in an attempt to block out sunlight – which amounts to planetary refrigeration – will save us.
The 2015 Paris agreement was an astonishing accomplishment. The establishment of 1.5°C as being the internationally agreed ceiling for warming was a success for those people and nations most exposed to climate change hazards. We know that every fraction of a degree matters. But at the time, believing warming could really be limited to well below 2°C required a leap of faith when it came to nations and companies putting their shoulder to the wheel of decarbonisation. What has happened instead is that the net zero approach of Paris is becoming detached from reality as it is increasingly relying on science fiction levels of speculative technology.
There is arguably an even bigger problem with the Paris agreement. By framing climate change in terms of temperature, it focuses on the symptoms, not the cause. 1.5°C or any amount of warming is the result of humans changing the energy balance of the climate by increasing the amount of carbon dioxide in the atmosphere. This traps more heat. Changes in the global average temperature is the established way of measuring this increase in heat, but no one experiences this average.
Climate change is dangerous because of weather that affects particular places at particular times. Simply put, this extra heat is making weather more unstable. Unfortunately, having temperature targets makes solar geoengineering seem like a sensible approach because it may lower temperatures. But it does this by not reducing, but increasing our interference in the climate system. Trying to block out the sun in response to increasing carbon emissions is like turning on the air conditioning in response to a house fire.
In 2021 we argued that net zero was a dangerous trap. Three years on and we can see the jaws of this trap beginning to close, with climate policy being increasingly framed in terms of overshoot. The resulting impacts on food and water security, poverty, human health, the destruction of biodiversity and ecosystems will produce intolerable suffering.
The situation demands honesty, and a change of course. If this does not materialise then things are likely to deteriorate, potentially rapidly and in ways that may be impossible to control.
Au revoir Paris
The time has come to accept that climate policy has failed, and that the 2015 landmark Paris agreement is dead. We let it die by pretending that we could both continue to burn fossil fuels and avoid dangerous climate change at the same time. Rather than demand the immediate phase out of fossil fuels, the Paris agreement proposed 22nd-century temperature targets which could be met by balancing the sources and sinks of carbon. Within that ambiguity net zero flourished. And yet apart from the COVID economic shock in 2020, emissions have increased every year since 2015, reaching an all time high in 2023.
Despite there being abundant evidence that climate action makes good economic sense (the cost of inaction vastly exceeds the cost of action), no country strengthened their pledges at the last three COPs (the annual UN international meetings) even though it was clear that the world was on course to sail past 2°C, let alone 1.5°C. The Paris agreement should be producing a 50% reduction in greenhouse gas emissions by 2030, but current policies mean that they are on track to be higher than they are today.
We do not deny that significant progress has been made with renewable technologies. Rates of deployment of wind and solar have increased each year for the past 22 years and carbon emissions are going down in some of the richest nations, including the UK and the US. But this is not happening fast enough. A central element of the Paris agreement is that richer nations need to lead decarbonisation efforts to give lower income nations more time to transition away from fossil fuels. Despite some claims to the contrary, the global energy transition is not in full swing. In fact, it hasn’t actually begun because the transition demands a reduction in fossil fuel use. Instead it continues to increase year-on-year.
And so policymakers are turning to overshoot in an attempt to claim that they have a plan to avoid dangerous climate change. A central plank of this approach is that the climate system in the future will continue to function as it does today. This is a reckless assumption.
2023’s warning signs
At the start of 2023, Berkeley Earth, NASA, the UK Met Office, and Carbon Briefpredicted that 2023 would be slightly warmer than the previous year but unlikely to set any records. Twelve months later and all four organisations concluded that 2023 was by some distance the warmest year ever recorded. In fact, between February 2023 and February 2024 the global average temperature warming exceeded the Paris target of 1.5°C.
Currently we cannot fully explain why global temperatures have been so high for the past 18 months. Changes in dust, soot and other aerosols are important, and there are natural processes such as El Niño that will be having an effect.
But it appears that there is still something missing in our current understanding of how the climate is responding to human impacts. This includes changes in the Earth’s vital natural carbon cycle.
Around half of all the carbon dioxide humans have put into the atmosphere over the whole of human history has gone into “carbon sinks” on land and the oceans. We get this carbon removal “for free”, and without it, warming would be much higher. Carbon dioxide from the air dissolves in the oceans (making them more acidic which threatens marine ecosystems). At the same time, increasing carbon dioxide promotes the growth of plants and trees which locks up carbon in their leaves, roots, trunks.
All climate policies and scenarios assume that these natural carbon sinks will continue to remove tens of billions of tons of carbon from the atmosphere each year. There is evidence that land-based carbon sinks, such as forests, removed significantly less carbon in 2023. If natural sinks begin to fail – something they may well do in a warmer world – then the task of lowering global temperatures becomes even harder. The only credible way of limiting warming to any amount, is to stop putting greenhouse gasses into the atmosphere in the first place.
Science fiction solutions
It’s clear that the commitments countries have made to date as part of the Paris agreement will not keep humanity safe while carbon emissions and temperatures continue to break records. Indeed, proposing to spend trillions of dollars over this century to suck carbon dioxide out of the air, or the myriad other ways to hack the climate is an acknowledgement that the world’s largest polluters are not going to curb the burning of fossil fuels.
Over the following years we are going to see climate impacts increase. Lethal heatwaves are going to become more common. Storms and floods are going to become increasingly destructive. More people are going to be displaced from their homes. National and regional harvests will fail. Vast sums of money will need to be spent on efforts to adapt to climate change, and perhaps even more compensating those who are most affected. We are expected to believe that while all this and more unfolds, new technologies that will directly modify the Earth’s atmosphere and energy balance will be successfully deployed.
What’s more, some of these technologies may need to operate for three hundred years in order for the consequences of overshoot to be avoided. Rather than quickly slow down carbon polluting activities and increasing the chances that the Earth system will recover, we are instead going all in on net zero and overshoot in an increasingly desperate hope that untested science fiction solutions will save us from climate breakdown.
We can see the cliff edge rapidly approaching. Rather than slam on the brakes, some people are instead pushing their foot down harder on the accelerator. Their justification for this insanity is that we need to go faster in order to be able to make the jump and land safely on the other side.
We believe that many who advocate for carbon dioxide removal and geoengineering do so in good faith. But they include proposals to refreeze the Arctic by pumping up sea water onto ice sheets to form new layers of ice and snow. These are interesting ideas to research, but there is very little evidence this will have any effect on the Arctic let alone global climate. These are the sorts of knots that people tie themselves up in when they acknowledge the failure of climate policy, but refuse to challenge the fundamental forces behind such failure. They are unwittingly slowing down the only effective action of rapidly phasing out fossil fuels.
That’s because proposals to remove carbon dioxide from the air or geoengineer the climate promise a recovery from overshoot, a recovery that will be delivered by innovation, driven by growth. That this growth is powered by the same fossil fuels that are causing the problem in the first place doesn’t feature in their analysis.
The bottom line here is that the climate system is utterly indifferent to our pledges and promises. It doesn’t care about economic growth. And if we carry on burning fossil fuels then it will not stop changing until the energy balance is restored. By which time millions of people could be dead, with many more facing intolerable suffering.
Major climate tipping points
Even if we assume that carbon removal and even geoengineering technologies can be deployed in time, there is a very large problem with the plan to overshoot 1.5°C and then lower temperatures later: tipping points.
The science of tipping points is rapidly advancing. Late last year one of us (James Dyke) along with over 200 academics from around the world was involved in the production of the Global Tipping Points Report. This was a review of the latest science about where tipping points in the climate system may be, as well as exploring how social systems can undertake rapid change (in the direction that we want) thereby producing positive tipping points. Within the report’s 350 pages is abundant evidence that the overshoot approach is an extraordinarily dangerous gamble with the future of humanity. Some tipping points have the potential to cause global havoc.
The melt of permafrost could release billions of tons of greenhouse gasses into the atmosphere and supercharge human-caused climate change. Fortunately, this seems unlikely under the current warming. Unfortunately, the chance that ocean currents in the North Atlantic could collapse may be much higher than previously thought. If that were to materialise, weather systems across the world, but in particular in Europe and North America, would be thrown into chaos. Beyond 1.5°C, warm water coral reefs are heading towards annihilation. The latest science concludes that by 2°C global reefs would be reduced by 99%. The devastating bleaching event unfolding across the Great Barrier Reef follows multiple mass mortality events. To say we are witnessing one of the world’s greatest biological wonders die is insufficient. We are knowingly killing it.
We may have even already passed some major climate tipping points. The Earth has two great ice sheets, Antarctica, and Greenland. Both are disappearing as a consequence of climate change. Between 2016 and 2020, the Greenland ice sheet lost on average 372 billion tons of ice a year. The current best assessment of when a tipping point could be reached for the Greenland ice sheet is around 1.5°C.
This does not mean that the Greenland ice sheet will suddenly collapse if warming exceeds that level. There is so much ice (some 2,800 trillion tons) that it would take centuries for all of it to melt over which time sea levels would rise seven metres. If global temperatures could be brought back down after a tipping point, then maybe the ice sheet could be stabilised. We just cannot say with any certainty that such a recovery would be possible. While we struggle with the science, 30 million tons of ice is melting across Greenland every hour on average.
The take home message from research on these and other tipping points is that further warming accelerates us towards catastrophe. Important science, but is anyone listening?
It’s five minutes to midnight…again
We know we must urgently act on climate change because we are repeatedly told that time is running out. In 2015, Professor Jeffrey Sachs, the UN special adviser and director of The Earth Institute, declared:
The time has finally arrived – we’ve been talking about these six months for many years but we’re now here. This is certainly our generation’s best chance to get on track.
In 2019 (then) Prince Charles gave a speech in which he said: “I am firmly of the view that the next 18 months will decide our ability to keep climate change to survivable levels and to restore nature to the equilibrium we need for our survival.”
“We have six months to save the planet,” exhorted International Energy Agency head Fatih Birol – one year later in 2020. In April 2024, Simon Stiell, executive secretary of the United Nations Framework Convention on Climate Change said the next two years are “essential in saving our planet”.
Either the climate crisis has a very fortunate feature that allows the countdown to catastrophe to be continually reset, or we are deluding ourselves with endless declarations that time has not quite run out. If you can repeatedly hit snooze on your alarm clock and roll over back to sleep, then your alarm clock is not working.
Or there is another possibility. Stressing that we have very little time to act is intended to focus attention on climate negotiations. It’s part of a wider attempt to not just wake people up to the impending crisis, but generate effective action. This is sometimes used to explain how the 1.5°C threshold of warming came to be agreed. Rather than a specific target, it should be understood as a stretch goal. We may very well fail, but in reaching for it we move much faster than we would have done with a higher target, such as 2°C. For example, consider this statement made in 2018:
Stretching the goal to 1.5 degrees celsius isn’t simply about speeding up. Rather, something else must happen and society needs to find another lever to pull on a global scale.
What could this lever be? New thinking about economics that goes beyond GDP? Serious consideration of how rich industrialised nations could financially and materially help poorer nations to leapfrog fossil fuel infrastructure? Participatory democracy approaches that could help birth the radical new politics needed for the restructuring of our fossil fuel powered societies? None of these.
The lever in question is Carbon Capture and Storage (CCS) because the above quote comes from an article written by Shell in 2018. In this advertorial Shell argues that we will need fossil fuels for many decades to come. CCS allows the promise that we can continue to burn fossil fuels and avoid carbon dioxide pollution by trapping the gas before it leaves the chimney. Back in 2018, Shell was promoting its carbon removal and offsets heavy Sky Scenario, an approach described as “a dangerous fantasy” by leading climate change academics as it assumed massive carbon emissions could be offset by tree planting.
Shell is far from alone in waving carbon capture magic wands. Exxon is making great claims for CCS as a way to produce net zero hydrogen from fossil gas – claims that have been subject to pointed criticism from academics with recent reporting exposing industry wide greenwashing around CCS.
But the rot goes much deeper. All climate policy scenarios that propose to limit warming to near 1.5°C rely on the largely unproven technologies of CCS and BECCS. BECCS sounds like a good idea in theory. Rather than burn coal in a power station, burn biomass such as wood chips. This would initially be a carbon neutral way of generating electricity if you grew as many trees as you cut down and burnt. If you then add scrubbers to the power station chimneys to capture the carbon dioxide, and then bury that carbon deep underground, then you would be able to generate power at the same time as reducing concentrations of carbon dioxide in the atmosphere.
Unfortunately, there is now clear evidence that in practice, large-scale BECCS would have very adverse effects on biodiversity, and food and water security given the large amounts of land that would be given over to fast growing monoculture tree plantations. The burning of biomass may even be increasing carbon dioxide emissions. Drax, the UK’s largest biomass power station now produces four times as much carbon dioxide as the UK’s largest coal-fired power station.
Five minutes to midnight messages may be motivated to try to galvanise action, to stress the urgency of the situation and that we still (just) have time. But time for what? Climate policy only ever offers gradual change, certainly nothing that would threaten economic growth, or the redistribution of wealth and resources.
Despite the mounting evidence that globalised, industrialised capitalism is propelling humanity towards disaster, five minutes to midnight does not allow time and space to seriously consider alternatives. Instead, the solutions on offer are techno fixes that prop up the status quo and insists that fossil fuel companies such as Shell must be part of the solution.
That is not to say there are no good faith arguments for 1.5°C. But being well motivated does not alter reality. And the reality is that warming will soon pass 1.5°C, and that the Paris agreement has failed. In the light of that, repeatedly asking people to not give up hope, that we can avoid a now unavoidable outcome risks becoming counterproductive. Because if you insist on the impossible (burning fossil fuels and avoiding dangerous climate change), then you must invoke miracles. And there is an entire fossil fuel industry quite desperate to sell such miracles in the form of CCS.
Four suggestions
Humanity has enough problems right now, what we need are solutions. This is the response we sometimes get when we argue that there are fundamental problems with the net zero concept and the Paris agreement. It can be summed up with the simple question: so what’s your suggestion? Below we offer four.
1. Leave fossil fuels in the ground
The unavoidable reality is that we need to rapidly stop burning fossil fuels. The only way we can be sure of that is by leaving them in the ground. We have to stop exploring for new fossil fuel reserves and the exploitation of existing ones. That could be done by stopping fossil fuel financing.
At the same time we must transform the food system, especially the livestock sector, given that it is responsible for nearly two thirds of agricultural emissions. Start there and then work out how best the goods and services of economies can be distributed. Let’s have arguments about that based on reality not wishful thinking.
2. Ditch net zero crystal ball gazing targets
The entire framing of mid and end-century net zero targets should be binned. We are already in the danger zone. The situation demands immediate action, not promises of balancing carbon budgets decades into the future. The SBTi should focus on near-term emissions reductions. By 2030, global emissions need to be half of what they are today for any chance of limiting warming to no more than 2°C.
It is the responsibility of those who hold most power – politicians and business leaders – to act now. To that end we must demand twin targets – all net zero plans should include a separate target for actual reductions in greenhouse gas emissions. We must stop hiding inaction behind promises of future removals. It’s our children and future generations that will need to pay back the overshoot debt.
3. Base policy on credible science and engineering
All climate policies must be based on what can be done in the real world now, or in the very near future. If it is established that a credible amount of carbon can be removed by a proposed approach – which includes capture and its safe permanent storage – then and only then can this be included in net zero plans. The same applies to solar geoengineering.
Speculative technologies must be removed from all policies, pledges and scenarios until we are sure of how they will work, how they will be monitored, reported and validated, and what they will do to not just the climate but the Earth system as a whole. This would probably require a very large increase in research. As academics we like doing research. But academics need to be wary that concluding “needs more research” is not interpreted as “with a bit more funding this could work”.
4. Get real
Finally, around the world there are thousands of groups, projects, initiatives, and collectives that are working towards climate justice. But while there is a Climate Majority Project, and a Climate Reality Project, there is no Climate Honesty Project (although People Get Real does come close). In 2018 Extinction Rebellion was formed and demanded that governments tell the truth about the climate crisis and act accordingly. We can now see that when politicians were making their net zero promises they were also crossing their fingers behind their backs.
We need to acknowledge that net zero and now overshoot are becoming used to argue that nothing fundamental needs to change in our energy intensive societies. We must be honest about our current situation, and where we are heading. Difficult truths need to be told. This includes highlighting the vast inequalities of wealth, carbon emissions, and vulnerability to climate change.
The time for action is now
We rightly blame politicians for failing to act. But in some respects we get the politicians we deserve. Most people, even those that care about climate change, continue to demand cheap energy and food, and a constant supply of consumer products. Reducing demand by just making things more expensive risks plunging people into food and energy poverty and so policies to reduce emissions from consumption need to go beyond market-based approaches. The cost of living crisis is not separate from the climate and ecological crisis. They demand that we radically rethink how our economies and societies function, and whose interests they serve.
To return to the boiling frog predicament at the start, it’s high time for us to jump out of the pot. You have to wonder why we did not start decades ago. It’s here that the analogy offers valuable insights into net zero and the Paris agreement. Because the boiling frog story as typically told misses out a crucial fact. Regular frogs are not stupid. While they will happily sit in slowly warming water, they will attempt to escape once it becomes uncomfortable. The parable as told today is based on experiments at the end of the 19th century that involved frogs that had been “pithed” – a metal rod had been inserted into their skulls that destroyed their higher brain functioning. These radically lobotomised frogs would indeed float inert in water that was cooking them alive.
Promises of net zero and recovery from overshoot are keeping us from struggling to safety. They assure us nothing too drastic needs to happen just yet. Be patient, relax. Meanwhile the planet burns and we see any sort of sustainable future go up in smoke.
Owning up to the failures of climate change policy doesn’t mean giving up. It means accepting the consequences of getting things wrong, and not making the same mistakes. We must plan routes to safe and just futures from where we are, rather where we would wish to be. The time has come to leap.
This 05 August webinar shares information about the Climate Change Commission’s first annual emissions reduction monitoring report, released in July 2024. The report provides an evidence-based, impartial view of whether the country is on course to reach its goals of reducing and removing greenhouse gas emissions. It provides insight into the progress made, challenges experienced, and opportunities and risks that need to be considered.
The following quote from Dr Rod Carr towards the end of the webinar, paints a realistic picture of what Aotearoa can expect in term of the economic our global standing and the risks. (Pages on this website explain Nationally Determined Contributions, the Paris Accord, and the Emissions Trading Scheme.)
Webinar question: What would happen if New Zealand wasn’t able or didn’t comply with our Nationally Determined Contributions (NDCs)? What are the implications for us?
Answers:
As time it goes on, meeting our NDCs is getting increasingly more difficult and expensive because of delay.
Not meeting the NDCs: we would certainly expect to see greater scrutiny of our actions from our trading partners particularly where we have free trade agreements (FTAs) and particularly with those strong climate elements within them like the EU FTA.
Not meeting them is also likely to come with a loss of influence and on the global scale in relation to climate change, which may mean we are in worse position to advocate for a response that takes into account our national circumstances.
The final thing is that global consumers and customers are increasingly scrutinising their supply chains and looking for products that are reducing emissions, and so we do increase risks around loss of the global markets.
– Jo Hendy CE: Video, The Climate Change Commission 2024 emissions reduction monitoring report, August 2024
When the rest of the world looks at New Zealand, if we haven’t
met our national determine contributions—we won’t know on the 31st of
December 2030 as it takes a couple of years for inventories and count
up— but when the partners that we care about look at our behaviour and
go, ‘Did you do all that you said you would? Did you do all that you
said you would? And did you do all the things you could have done?’
That’s going to inform whether it’s ‘that you tried hard but missed’ or
‘you didn’t try’.
So foreign countries who are in incurring very real economic
costs to reduce their emissions today— and that includes the Europeans,
the Brits, and the Americans (there’s half a trillion U.S. dollars of
taxpayers money being made available to reduce their emissions so the
idea they’re not doing anything; that’s just wrong)—so when those
countries look at NZ in the early 2030s and they look back to 2020, they
go, ‘Well you could have made a better effort to, for example,
decarbonized ground transport there were known technologies that were
available, but you just chose to buy cheap high polluting cars. You
could have chosen to stop burning as much coal and fossil gas to make
electricity by investing more sooner in renewables, but you chose not
to.’ I think that’s going to influence what the world thinks about New
Zealand ‘s behaviour more than whether we did or did hit the exact
number of tonnes for this decade.
And the rest of the world looks at New Zealand and says,
‘You didn’t try. You didn’t take up the known technologies. You are
short sighted, selfish, and reckless in your use of the climate for
profit.’ I think their attitudes to us will be very different than if we
had tried hard and done all we could but things didn’t turn out well.
– Dr Rod Carr, Video, The Climate Change Commission 2024 emissions reduction monitoring report, August 2024
New Zealand is one of the worst countries in the world in terms of meeting its commitments to keep temperatures under 1.5C. (Image: Climate Action Tracker)
New Zealand is also subsidising high greenhouse gas emissions industries by giving the agricultural sector a 100% discount (Image: Nature journal)
The Intergovernmental Panel on Climate Change’s (IPCC) synthesis report recently landed with an authoritative thump, giving voice to hundreds of scientists endeavouring to understand the unfolding calamity of global heating. What’s changed since the last one in 2014? Well, we’ve dumped an additional third of a trillion tonnes of CO₂ into the atmosphere, primarily from burning fossil fuels. While world leaders promised to cut global emissions, they have presided over a 5% rise.
The new report evokes a mild sense of urgency, calling on governments to mobilise finance to accelerate the uptake of green technology. But its conclusions are far removed from a direct interpretation of the IPCC’s own carbon budgets (the total amount of CO₂ scientists estimate can be put into the atmosphere for a given temperature rise).
The report claims that, to maintain a 50:50 chance of warming not exceeding 1.5°C above pre-industrial levels, CO₂ emissions must be cut to “net-zero” by the “early 2050s”. Yet, updating the IPCC’s estimate of the 1.5°C carbon budget, from 2020 to 2023, and then drawing a straight line down from today’s total emissions to the point where all carbon emissions must cease, and without exceeding this budget, gives a zero CO₂ date of 2040.
A full description of the above chart is available here.
If emissions stay at their current levels, we will exhaust the 50% chance of 1.5°C in 9 years. If we begin to immediately cut emissions following the blue line, then to stay within the carbon budget for 50:50 chance of not exceeding 1.5°C we need zero global emissions by 2040. The vertical axis represents how much carbon is emitted each year – note the pandemic-related blip in 2020.
Given it will take a few years to organise the necessary political structures and technical deployment, the date for eliminating all CO₂ emissions to remain within 1.5°C of warming comes closer still, to around the mid-2030s. This is a strikingly different level of urgency to that evoked by the IPCC’s “early 2050s”. Similar smoke and mirrors lie behind the “early 2070s” timeline the IPCC conjures for limiting global heating to 2°C.
IPCC science embeds colonial attitudes
For over two decades, the IPCC’s work on cutting emissions (what experts call “mitigation”) has been dominated by a particular group of modellers who use huge computer models to simulate what may happen to emissions under different assumptions, primarily related to price and technology. I’ve raised concerns before about how this select cadre, almost entirely based in wealthy, high-emitting nations, has undermined the necessary scale of emission reductions.
In 2023, I can no longer tiptoe around the sensibilities of those overseeing this bias. In my view, they have been as damaging to the agenda of cutting emissions as Exxon was in misleading the public about climate science. The IPCC’s mitigation report in 2022 did include a chapter on “demand, services and social aspects” as a repository for alternative voices, but these were reduced to an inaudible whisper in the latest report’s influential summary for policymakers.
The specialist modelling groups (referred to as Integrated Assessment Modelling, or IAMs) have successfully crowded out competing voices, reducing the task of mitigation to price-induced shifts in technology – some of the most important of which, like so-called “negative emissions technologies”, are barely out of the laboratory.
The IPCC offers many “scenarios” of future low-carbon energy systems and how we might get there from here. But as the work of academic Tejal Kanitkar and others has made clear, not only do these scenarios prefer speculative technology tomorrow over deeply challenging policies today (effectively a greenwashed business-as-usual), they also systematically embed colonial attitudes towards “developing nations”.
With few if any exceptions, they maintain current levels of inequality between developed and developing nations, with several scenarios actually increasing the levels of inequality. Granted, many IAM modellers strive to work objectively, but they do so within deeply subjective boundaries established and preserved by those leading such groups.
If we step outside the rarefied realm of IAM scenarios that leading climate scientist Johan Rockström describes as “academic gymnastics that have nothing to do with reality”, it’s clear that not exceeding 1.5°C or 2°C will require fundamental changes to most facets of modern life.
Starting now, to not exceed 1.5°C of warming requires 11% year-on-year cuts in emissions, falling to nearer 5% for 2°C. However, these global average rates ignore the core concept of equity, central to all UN climate negotiations, which gives “developing country parties” a little longer to decarbonise.
Include equity and most “developed” nations need to reach zero CO₂ emissions between 2030 and 2035, with developing nations following suit up to a decade later. Any delay will shrink these timelines still further.
Most IAM models ignore and often even exacerbate the obscene inequality in energy use and emissions, both within nations and between individuals. As the International Energy Agency recently reported, the top 10% of emitters accounted for nearly half of global CO₂ emissions from energy use in 2021, compared with 0.2% for the bottom 10%. More disturbingly, the greenhouse gas emissions of the top 1% are 1.5 times those of the bottom half of the world’s population.
So where does this leave us? In wealthier nations, any hope of arresting global heating at 1.5 or 2°C demands a technical revolution on the scale of the post-war Marshall Plan. Rather than relying on technologies such as direct air capture of CO₂ to mature in the near future, countries like the UK must rapidly deploy tried-and-tested technologies.
Retrofit housing stock, shift from mass ownership of combustion-engine cars to expanded zero-carbon public transport, electrify industries, build new homes to Passivhaus standard, roll-out a zero-carbon energy supply and, crucially, phase out fossil fuel production.
Three decades of complacency has meant technology on its own cannot now cut emissions fast enough. A second, accompanying phase, must be the rapid reduction of energy and material consumption.
Given deep inequalities, this, and deploying zero-carbon infrastructure, is only possible by re-allocating society’s productive capacity away from enabling the private luxury of a few and austerity for everyone else, and towards wider public prosperity and private sufficiency.
For most people, tackling climate change will bring multiple benefits, from affordable housing to secure employment. But for those few of us who have disproportionately benefited from the status quo, it means a profound reduction in how much energy we use and stuff we accumulate.
The question now is, will we high-consuming few make (voluntarily or by force) the fundamental changes needed for decarbonisation in a timely and organised manner? Or will we fight to maintain our privileges and let the rapidly changing climate do it, chaotically and brutally, for us?
“Our wise and noble leaders have just concluded the 27th annual global climate conference known as COP27. They all seem jolly pleased with what they’d all decided to achieve including really very sincere commitment to work super-duper hard to put in place policy that would definitely address the idea of thinking about doing things that might contribute towards the possibility of reducing greenhouse gas emissions with the aim of maybe limiting global temperatures to only 1.5 degrees Celsius above preindustrial levels. Then there were the 636 lobbyists—I mean delegates at COP27—representing the fossil fuel industry who reassured us all that increasing oil and gas exploration was actually an extremely important part of the transition toward achieving the 1.5 degrees Celsius target.”
This is a submission on behalf of the Environmental Defence Society (EDS) on the Government’s Discussion Document Te Tātai utu o nā tukunga: Pricing Agricultural Emissions.
The submission responds to the schedule of questions included in the discussion document, reproduced in full with permission from Gary Taylor Chief Executive, Environmental Defence Society:
Question 1:Do you think modifications are required to the proposed farm-level levy system to ensure it delivers sufficient reductions in gross emissions from the agriculture sector? Please explain.
If farmers are to balk at the proposal as indicated by recent statements from Federated Farmers and others, and widespread non-compliance follows, then implementing a processor-level system would be a practical way forward. It is alarming how some farmers are signalling an unwillingness to comply with the rule of law. The farm-level option (which has benefits in sending price signals to individual famers) may therefore not be workable at least in the short term. Processors could develop their own incentive arrangements for their suppliers and some have experience in doing that already.
Question 2:Are tradeable methane quotas an option the Government should consider further in the future? Why?
There may be benefit in seeing the levy system as a transition to a cap and trade system. This means the levy system should be designed so that such a transition could occur. The cap should be set (and reviewed from time to time) by the Climate Change Commission (Commission) at the level that achieves the reduction targets. If Ministers were to make the decisions, then there should be transparent criteria in place, and they should be advised on the appropriate level by the Commission.
Question 3: Which option do you prefer for pricing agricultural emissions by 2025 and why?
A farm-level levy system, with fertiliser in the New Zealand Emissions Trading Scheme (ETS), would give individual farmers incentives to reduce emissions and reward those doing so. However, that may be an impractical option given that some farmers seem determined to not cooperate with any system. For that reason, we favour a pragmatic approach where pricing is set at the processor level, which would help avoid non-compliance. Processors could then develop incentives that would apply to their supplier cohort. There are also questions around whether a farm-level system could be developed in time.
Prices should be set either directly by the Commission, or if by Ministers, on the advice of the Commission and subject to transparent criteria.
Fertiliser should come under the ETS which would mean all fertiliser users are captured and the price signal applies across the sector.
Question 4:Do you support the proposed approach for reporting of emissions? Why, and what improvements should be considered?
Broadly yes but further work is needed to simplify the reporting system and ensure the obligations are proportional to the need.
Question 5:Do you support the proposed approach to setting levy prices? Why, and what improvements should be considered?
Price setting cannot be the responsibility of the sector itself. It must be independent and linked to the methane reductions required. As mentioned above, EDS favours this responsibility resting with the independent Commission (analogous to the Reserve Bank on interest rates). But if set by Ministers, then there should be clear decision-making criteria, and they should receive advice from the Commission. Further, the proposed ETS discount rates for long-lived gases are too generous given the persistent delays in bringing the sector into a pricing mechanism.
Question 6:Do you support the proposed approach to revenue recycling? Why, and what improvements should be considered?
Recycling revenue into finding new abatement approaches makes sense in theory, but the problem is that over $100m of public money has gone down that route since the early 2000s, with very little to show for it. If revenue is to go into research it needs to be to entities that offer prospect of deployment of real technologies into the field. Research criteria therefore need to focus on deployment.
The answer to emissions mitigation is to reduce land use intensity. Some compensation for that might also be needed given the farming sector has simply been following the economic signals to date. There is virtue in the model of low-impact pastoral farming with indigenous forestry, and recycling could support that kind of transition.
The big gap in the policy settings, at present, is the lack of strong and effective incentives for indigenous afforestation. Revenue recycling should be used to create such incentives, given the longer term sequestration and biodiversity benefits that would follow.
Further consideration should be given to whether revenue from the levy should also be used to support farmers needing assistance with adaptation crises on the farm (such as droughts and floods).
Question 7:Do you support the proposed approach for incentive payments to encourage additional emissions reductions? Why, and what improvements should be considered?
The price signals should be robust enough to incentivise the emission reductions required. Otherwise the sector is getting disproportional assistance / subsidies from the Government over other sectors.
Question 8:Do you support the proposed approach for recognising carbon sequestration from riparian plantings and management of indigenous vegetation, both in the short and long term? Why, and what improvements should be considered?
Two approaches are required here.
The first is to create a biodiversity incentive payment to support native forest and related plantings or regeneration. The proposed interim approach will achieve that, in part, but biodiversity enhancements need to be considered in the broader context and be designed to encourage and support native forest restoration at landscape scale.
The second is to ban permanent exotic carbon forests in the ETS.
The first approach can help support related government policies such as the National Policy Statement for Indigenous Biodiversity. The second would prevent widespread monocultures with their attendant adverse landscape impacts and fire and disease risks.
Question 9:Do you support the introduction of an interim processor-level levy in 2025 if the farm-level system is not ready? If not, what alternative would you propose to ensure agricultural emissions pricing starts in 2025?
Yes. In fact we think that should be the way forward in any event.
Question 10:Do you think the proposed system for pricing agricultural emissions is equitable, both within the agriculture sector, and across other sectors, and across New Zealand generally? Why and what changes to the system would be required to make it equitable?
It is time that the sector played its part in mitigating the impacts of climate change. It has got away with too much, for too long, and continuing taxpayer subsidy and support and the proposed incremental nature of the pricing obligations continue that approach. It is inequitable for the primary sector to be relying on others which are paying their way through the ETS.
With respect to Māori landowners, there may be a case for some interim support given they appear to be disproportionately impacted by the proposal. The best way to do that is to create a special category in the ETS for native forest regeneration and establishment that gives a long-term revenue stream as good as or better than permanent exotic carbon forests.
Question 11:In principle, do you think the agricultural sector should pay for any shortfall in its emissions reductions? If so, do you think using levy revenue would be an appropriate mechanism for this?
Yes and that calculation should be made by the Commission.
Question 12:What impacts or implications do you foresee as a result of each of the Government’s proposals in the short and long term?
Unless the Government’s proposals are enacted, we see widespread planting of permanent exotic carbon forests and rural non-compliance with the law. There will be some emission reductions, but the sector will continue to hold out on meeting its fair share, as it has since 2002. The climate will continue to warm with consequent droughts, floods and sea-level rise and farmers will continue to hold out their hands for Government support when impacted.
Question 13:What steps should the Crown be taking to protect relevant iwi and Māori interests, in line with Te Tiriti o Waitangi? How should the Crown support Māori land owners, farmers and growers in a pricing system?
By changing the pricing incentives to favour permanent native forests over permanent exotic ones. Māori landowners have indicated a preference for natives but the pricing incentives are going the wrong way.
Question 14:Do you support the proposed approach for verification, compliance and enforcement? Why, and what improvements should be considered?
Yes.
Question 15:Do you have any other priority issues that you would like to share on the Government’s proposals for addressing agricultural emissions?
The glaring gap is the absence of the right pricing incentives to encourage native forest restoration that would lead to a virtuous mixed land use in which native forests offset some on-farm emissions over time.
Since COP26, the ‘Don’t-Look-Up’ mentality, or perhaps the ‘war-in-Ukraine’ and ‘post-Covid-economy’ have become diversionary topics. The latest UN GAP Report begins with a clear admission, and an admonition. Nations have shaved just 1% off their projected greenhouse gas emissions for 2030, at a time when reductions need to be 45% to have even a chance to keep temperatures under 1.5C. In short, there is no credible no credible pathway in which global temperatures under that 2.8C, and “...uncertainties in the climate system mean that warming of up to 4C cannot be fully ruled out.”
If you’re not up to reading the full report, Carbon Brief has an in depth analysis. While the report also offers solutions, the window is closing on fingernails barely clinging to the sill.
Look up.
Please.
“Every year, the negative impacts of climate change become more intense. Every year, they bring more misery and pain to hundreds of millions of people across the globe. Every year, they become more a problem of the here and now, as well as a warning of tougher consequences to come. We are in a climate emergency.
“And still, as UNEP’s Emissions Gap Report 2022 shows, nations procrastinate. Since COP26 in Glasgow in 2021, new and updated nationally determined contributions (NDCs) have barely impacted the temperatures we can expect to see at the end of this century.
“This year’s report tells us that unconditional NDCs point to a 2.6°C increase in temperatures by 2100, far beyond the goals of the Paris Agreement. Existing policies point to a 2.8°C increase, highlighting a gap between national commitments and the efforts to enact those commitments. In the best- case scenario, full implementation of conditional NDCs, plus additional net zero commitments, point to a 1.8°C rise. However, this scenario is currently not credible.
“To get on track to limiting global warming to 1.5°C, we would need to cut 45 per cent off current greenhouse gas emissions by 2030. For 2°C, we would need to cut 30 per cent. A stepwise approach is no longer an option. We need system-wide transformation. This report tells us how to go about such a transformation. It looks in-depth at the changes needed in electricity supply, industry, transport, buildings and food systems. It looks at how to reform financial systems so that these urgent transformations can be adequately financed.
“Is it a tall order to transform our systems in just eight years? Yes. Can we reduce greenhouse gas emissions by so much in that timeframe? Perhaps not. But we must try. Every fraction of a degree matters: to vulnerable communities, to species and ecosystems, and to every one of us. Most importantly, we will still be setting up a carbon-neutral future: one that will allow us to bring down temperature overshoots and deliver other benefits, like clean air.
“The world is facing other crises. We must deal with them. But let us remember that they also offer opportunities to reform our global economy. We have missed the opportunity to invest in a low-carbon recovery from the COVID-19 pandemic. Now, we are in danger of missing the opportunity to boost clean and efficient energy as a response to the energy crisis. Instead of missing such opportunities, we must capitalize on them with confidence.
“I urge every nation and every community to pore over the solutions offered in this report, build them into their NDCs and implement them. I urge everyone in the private sector to start reworking their practices. I urge every investor to put their capital towards a net-zero world. The transformation begins now. ”
This is fast emerging as a critical issue for billions of people. As part of its week-long series on the topic, Carbon Brief hosted a free webinar (video below) on whether it is likely to be the defining issue at the next round of UN climate talks, COP27.
