Insights

Race to carbon-neutral – spotlight on New Zealand and South Africa’s gas emissions

Agriculture is the largest single source of greenhouse emissions in New Zealand and, while it is one of the countries working towards being carbon neutral by 2050, according to some sources it is taking advantage of a methane gas loophole in its net zero legislation to placate big dairy rather than doing what’s necessary to avert the climate crisis.

The term ‘net zero’ is increasingly used to describe a broader commitment to decarbonisation and climate action as opposed to relying solely on offsetting. It embraces moving beyond simple carbon neutrality to include more activities under the scope of indirect emissions and includes a target on emissions reduction.

In 2017, Sweden became the first nation to enshrine a mid-century net zero target (2045) in law. The UK, in 2019, was the first G7 economy to legislate for net zero by 2050 and China, the world’s largest greenhouse gas emitter, committed to carbon neutrality before 2060 at the 75th UN General Assembly held in 2020.

In March this year, the Energy & Climate Intelligence Unit in collaboration with Oxford Net Zero published what is believed to be the first global assessment of net zero targets. Their report highlighted that already 61% of countries, 9% of states and regions in the largest emitting countries and 13% of cities over 500k in population have now committed to net zero.

It also showed, however, that net zero commitments vary hugely in their quality. One of the latest countries to have fingers pointed at its net zero legislation in this respect is New Zealand, which late last year approved a bill committing the country to be carbon neutral by the year 2050.

New Zealand has a head start over many other countries when it comes to carbon emissions because it already generates 80% of its electricity from renewable energy resources and has plans to increase that substantially when offshore oil and gas facilities are phased out. The target date for that occurrence is 2035.

But the bill signed in 2020 includes a loophole to protect its industries responsible for a large portion of foreign income – the methane gas loophole.

When it comes to emissions of biogenic methane, New Zealand isn’t aiming for net zero. Instead, its goal is to reduce emissions by 10% below 2017 levels by 2030 and then by 24%-47% by 2050.

According to the NPR news network, agriculture is the largest single source of greenhouse emissions in New Zealand, accounting for 48% of the country’s total in 2017. Methane emissions from ruminant animals made up 34% of its total emissions.

“By putting those emissions in a separate bucket, New Zealand has made hitting its carbon goals a lot easier,” the network wrote while Greenpeace New Zealand argued that there was a ‘cow-shaped hole’ in the plan.

“The Climate Change Commission’s final plan seems more anxious about placating big dairy than doing what is scientifically necessary to avert the climate crisis,” said Greenpeace campaigner Amanda Larsson in a statement and Cindy Baxter, from Climate Action Network Aotearoa, told Climate Home News she was “concerned” about offsets. “This should not be what net zero looks like,” she said.

More recently, independent advisors said New Zealand should cut emissions “much more than 35%” from 2005 levels by 2030 to align ambition with a 1.5C global warming limit.

According to Climate Action Tracker, New Zealand should reduce emissions by at least 44% between 2005 and 2030 to do its fair share to keep the world within 1.5C of warming. To be considered a “role model”, it should aim for at least 70% of emissions cuts. These figures do not include land use, change and forestry.

A recent Oxfam report said that, to do its fair share, New Zealand should reduce emissions between 67% and 102% by 2030 – depending on the methodology used. Technological solutions such as selective breeding and the use of chemical compounds in feed to inhibit cattle’s methane production could help make “significant contributions to global emissions reductions,” the report said.

Regardless of what you think of New Zealand’s loophole, South Africa can’t point fingers. It is the 14th largest contributor to global greenhouse gas emissions, largely because it relies on the coal value chain, which accounts for 60% of the country’s greenhouse gas emissions (including Eskom’s 45% of emissions).

On September 28th, the country’s Cabinet ministers met climate envoys from the EU, US, UK, France and Germany to discuss financing options and other support to enable South Africa to go green and reduce its dependence on coal. The visit by the climate envoys comes ahead of the UN Climate Change Conference — COP26 — which takes place in Glasgow on 31 October.

While nothing is formal yet, Eskom is looking for about R180-billion concessional finance — loans offered at softer than usual terms — to help it send several of its coal-fired power plants into early retirement and boost the share of green energy on its carbon-heavy grid. And South Africa is proposing a Just Transition Financing Facility to make green energy financing more affordable.

Meridian Economics, an energy and infrastructure economics advisory firm based in Cape Town, unveiled JTT (or Just Transition Transaction) just a few days ahead of the envoy’s visit. At its most basic, the JTT is a proposed mechanism through which nearly half of the emissions of South Africa can rapidly be reduced and eventually ended.

A system-level intervention plan, it lays out how South Africa — specifically Eskom — can be incentivised to accelerate decarbonising electricity generation to fall in line with the goal of keeping global heating to below 1.5°C — the tipping point at which humanity can begin to expect seeing the worst and irreversible impacts of “dangerous climate change”.

Given that, in the Paris Agreement of 2015, the country pledged to peak its emissions by 2025 and allow them to plateau for a decade, it’s time for such a system to be seriously considered. And, as Daily Maverick so succinctly put it: “The stakes are high. Embracing green energy in a big way is seen not just as an environmental imperative, but will also pay huge economic dividends. Companies that do not have decarbonised production profiles in future will find it increasingly difficult to access markets and finance.”

Resources:

https://eciu.net/analysis/reports/2021/taking-stock-assessment-net-zero-targets

www.climatechangenews.com

https://climateactiontracker.org/countries/new-zealand/

https://www.oxfam.org.nz/wp-content/uploads/2020/09/Oxfam-NZ-Briefing-A-Fair-2030-Target-for-Aotearoa.pdf

https://www.dailymaverick.co.za/article/2021-09-29-how-south-africa-can-power-ahead-with-green-energy-ambitions-through-r750bn-financing-plan/?utm_medium=email&utm_campaign=First%20Thing%2029%20September%202021&utm_content=First%20Thing%2029%20September%202021+CID_de2b5f573bfb2cb7cca1f08283b0b100&utm_source=TouchBasePro&utm_term=How%20South%20Africa%20can%20power%20ahead%20with%20green%20energy%20ambitions%20through%20R750bn%20financing%20plan

https://www.dailymaverick.co.za/article/2021-09-29-south-african-delegation-meets-climate-envoys-proposes-just-transition-financing-facility/?utm_medium=email&utm_campaign=Business%20Maverick%20Thursday%2030%20September%20APS&utm_content=Business%20Maverick%20Thursday%2030%20September%20APS+CID_3803fd13b832bcdf9fd5ca8fb3f00d02&utm_source=TouchBasePro&utm_term=South%20African%20delegation%20meets%20climate%20envoys%20proposes%20Just%20Transition%20Financing%20Facility

Posted by The Know - Pam Golding Properties