Carbon Match Update

Wednesday 13 Jun 2018

NZUs Update - NZUs have been sold down to $20.65 over the last week, with buyers seemingly a little less eager and volumes emerging. Carbon Match seems to have had both reasonable support and reasonable supply at the $20.65 level over the last few days.

Last week brought the launch by Climate Change Minister James Shaw of consultation on the Zero Carbon Bill. The Bill is intended to create certainty, by setting a new long term target, by having carbon budgets as stepping stones towards the achievement of that long-term target and by the establishment of a politically independent Climate Change Committee.

As always the most interesting stuff lies in the small print - it hasn't yet been decided what exactly the "net zero" means. Minister Shaw has said he expects "feisty debate" to ensue on the matter, which has pretty big implications for whether or not New Zealand has seen peak cow.

The consultation document asks New Zealanders whether they think "net zero" should mean:

1) net-zero carbon dioxide only – and not other gases;

2) net-zero long-lived gases, like carbon dioxide, and stabilised short-lived gases, like methane; or

3) net-zero emissions of all greenhouse gases.

This is the billion dollar (per annum...roughly, and counting..) question and it hangs heavily, particularly over those in the land-based sectors.

The back story to this is that methane from livestock, is a flow, not a stock. As Vic University Professor Dave Frame explained on Radio NZ earlier today, it doesn't persist and accumulate in the atmosphere nearly the way CO2 does.

That's not to say that leaving (biological emissions from) farming out as per option 1 is a good idea - it's not says Frame, because if methane emissions rise overall that's bad for the climate and wouldn't be fair.

In collaborative research published by Frame, Adrian Macey and others in Nature earlier this week, the authors note that using conventional Global Warming Potentials (GWPs) to convert short-lived climate pollutants like methane to “CO2-equivalent” emissions misrepresents their impact on global temperature. The team of researchers propose an alternative approach.

Such an approach might underpin something like option 2 which could be consistent with a policy stabilising our short lived emissions from methane and eliminating our long-lived emissions. And a policy somewhere between 2 and 3 could also be created, whereby the carbon budget is shared and methane emissions are gently declined over time but CO2 and other long-lived emissions are reduced much faster. It's a cold wet weekend for many of us - have a listen.

Coming back to the Zero Carbon consultation, we have until 5pm July 19 to submit online in a survey format and the underlying discussion document is linked here.

Carbon Match - is open between 1pm-5pm.

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