The graphs presented on the other pages of this site are just the trends from individual countries' GHG inventories for the UNFCCC (United Nations Framework Convention on Climate Change). The focus of the inventories seems to be on quality and efficiency of collection to ensure data is accurate and complete. However they do not represent the countries' responsibilities for emissions because the inventories record emissions in the country where they were produced even though the reason they were produced may be because of demand for a product from another country. For some countries their inventory may generally match with the emissions they are responsible for, however this is not the case for New Zealand given the agricultural emissions are due to a large proportion of agricultural exports.
As I have been advocating for an 'including imports, excluding exports' approach to target setting and policies for emissions reductions, I figured I should have a go at working out what emissions New Zealand is actually responsible for. This is not a new idea as Mike Berners-Lee did the same thing for the UK in his 2010 book "How Bad Are Bananas? The Carbon Footprint of Everything", and it was also mentioned in a research paper I saw when gathering data for this project. The following graph shows the emissions NZ is actually responsible for; it should be looked at in conjunction with the notes that follow as what I have chosen to adjust for the imports/exports basis may be important. I feel that sometimes there can be too much focus on agricultural emissions, and perhaps this prevents New Zealanders from making significant reductions in areas where we have more responsibility.
I shaded out categories where emissions are methane (CH4) that likely came from plants that have taken carbon dioxide (CO2) out of the air in recent history. This is due to my understanding of global warming being that the more carbon in the atmosphere, the greater the greenhouse effect. Methane emissions from cows for example won't change the total carbon in the air, given that cows got the carbon from grass that sequestered carbon from the air in the first place. Stopping climate change is about keeping the total carbon content in the atmosphere below a level that would cause the greenhouse to get too hot (or the ocean too acidic). However, the distribution of atmospheric carbon among different types of gases does change the global warming effect. Permanently reducing methane's percentage of atmospheric carbon means that we can emit a higher total of carbon into the atmosphere. Likewise sequestering atmospheric carbon in permanent forests means we can emit more carbon from underground fossil fuels into the atmosphere. Temporarily reducing methane or planting crop forests can provide a brief cooling effect, but they are not substitutes for stopping the total atmospheric carbon getting above a bad level. Temporary reductions can buy time for other measures to create permanent reductions (such as technology advancements, or reducing population to decrease land required for food production).
The following categories were adjusted for an 'include imports, exclude exports' basis:
Industrial Processes: About 30-60% of iron/steel emissions were excluded. An emissions factor of 2.5 tonnes CO2 eq. per tonne of steel1 and the annual reports of NZ's only steel producer2 were used to estimate NZ's domestic steel emissions, which increased from 672 kt to 1171 kt over the five years to 2017. 90% of aluminium exports were excluded as this is the percentage Wikipedia said was exported in 20113.
Fuel - International aviation: Although IPCC guidelines say that this shouldn't be counted as part of a country's inventory, I think in NZ's case it probably does reflect international aviation emissions NZ is responsible for because NZ seems a bit out of the way to be a stopover country (I assume stopover flights are the reason the IPCC indicates not to count them as national emissions).
Imports - Cars & light duty trucks: The NZ Motor Vehicle Register was used as a source of data for new registrations. The average emissions to manufacture a vehicle was assumed to be 7.5 tonnes CO2 eq. (I don't know whether 7.5 tonnes is correct, but hopefully it is in the right ballpark). The 7.5 tonnes per vehicle was multiplied by the total new registrations of new passenger car/vans, motor caravans, and goods van/truck/utility with a gross vehicle mass less than 3900kg. The same was done for new registrations of used vehicles but they were also multiplied by 0.67 as well to assume that for used vehicle imports NZ gets about two thirds of the life of the vehicle. The emissions shown in the graph are the total from new registrations of new and used cars & light duty trucks.
Beef/Lamb: Exports were excluded by multiplying sheep and non-dairy cattle emissions in the inventory, by the percentage of sheep and beef exported each year estimated using the OECD-FAO Agricultural Outlook tables4.
Dairy: 94% of emissions from dairy cattle were excluded because about 95% of Fonterra's NZ production is exported5 and from briefly looking at any information other milk processors provided about their exports as a percentage of production, it seemed like 94% was a close enough guess for the industry.
The following categories were not adjusted from what is reported in NZ's GHG inventory because they don't seem to be tied to exports or it would be hard to determine the exact level:
Fuel - Cars
Waste: Most of the emissions come from solid waste disposal sites. 'Methane is produced from anaerobic microbial decomposition of organic matter in solid waste disposal sites.'6
Fuel - Manufacturing excluding food processing: A lot of the emissions seem to come from manufacturing chemicals (maybe methanol).
Fuel - Public electricity
Fuel - Light duty trucks: 'Emissions from vehicles so designated in the vehicle registering country primarily for transportation of light-weight cargo or which are equipped with special features such as four-wheel drive for off-road operation. The gross vehicle weight normally ranges up to 3500-3900 kg or less.'6
Fuel - Other sectors: About half of this is from fuel for agriculture/forestry/fishing, and the other half is fuel for residential/commercial.
Fuel - Food processing: I had intended to exclude 90% of these emissions as they may be from drying milk to make milk powder for export, but I don't know enough about the emissions to exclude any of them.
Fugitive emissions from natural gas and geothermal
Fuel - Heavy duty trucks and buses
Liming & Urea application
Fuel - Domestic aviation
Fuel - International navigation: Same approach taken as for International Aviation.
Fuel - Petroleum refining
Fuel - Domestic navigation
The graph does not show fuel for railways or fuel for motorcycles because they were less than domestic navigation and there is little value in having too many categories on the graph.
Car & light duty truck imports were the only imports I could think of with a significant overseas footprint (though come to think of it, there's aeroplanes, heavy duty trucks, and tractors). I did look at computer imports because the complexity of microchips can be energy-intensive, but based on my rough, not well-researched estimates I figured it would be about the same as fuel for domestic navigation.
This section provides suggestions on ways to reduce emissions.
It is possible to offset emissions by growing forests, but I think it only counts if they are permanent forests and not if they are harvested at some point. Increasing the amount of wood stored in buildings may be a way to reduce carbon, but it eventually breaks down. Given that land is also required for food or energy production, growing more and more permanent forests does not seem to be a sustainable solution.
I found this article about research being undertaken to produce steel without using coal7.
Refrigeration and air conditioning contributed about 1400kt in 2017 because the HFC gases used have a strong greenhouse effect. Booths supermarket in the UK seems to be using CO2 as the gas for new refrigerators8, so maybe this is a way NZ could reduce emissions.
One of the best ways to reduce these emissions would be to not travel or send freight by plane. Boats are far more climate friendly than planes during operation (I have not looked to see what the embodied emissions are during production).
Fuel - Cars
There is currently little financial incentive for individuals to reduce emissions from driving; however, there is financial incentive to drive because the economy rewards productivity. If people were paid for the extra time it takes to cycle or take the bus rather than driving, then better environmental outcomes would be achieved. However it is hard to know when someone has cycled instead of driving, so it would be hard to pay them. A way around this would be to impose some form of tax on the fuel emissions, and redistribute the revenue back to everyone equally as a universal dividend. This would mean that people who drive less would be rewarded, and those who drive more would have a financial disincentive.
The following is an example of how much fuel would need to cost for a person to breakeven by cycling relative to driving.
These assumptions were made:
- Cycling or taking the bus takes twice as long as driving.
- Driving is done at an average speed of 50km per hour.
- The median worker earns $50,000 a year and works 2000 hours a year.
- Median fuel economy is 14km per litre.
- 2.32 kg CO2 eq. is emitted per litre of regular fuel9.
Let's say the median worker cycles to and from work, and over a couple of days this amounts to two hours of cycling.
If instead the worker spends an hour driving to and from work, and spends an extra hour working at $25/hr, then they will be $25 better off.
For cycling to breakeven with driving, that hour of driving would need to cost $25.
Driving for an hour at 50km/hr with a fuel economy of 14km/litre, would use 3.57 litres.
Therefore 3.57 litres of fuel would need to cost $25, or $7/litre.
The current price is $2.14/litre, so the emissions tax would add $4.86/litre.
One tonne of CO2 eq. is emitted for every 431 litres of fuel, so the price of carbon would be $2095 per tonne.
A new car at 7.5 tonnes CO2 eq. emitted during production would cost $15,712 more than it does currently.
Of course the assumptions could be altered to get a different cost per litre (and cost per tonne), e.g. if cycling only takes a quarter more time than driving then the cost per litre would be less, or if the median wage is higher, then the cost per litre would need to be higher.
$7 per litre seems steep, but people would be receiving money from the Government via the universal dividend to help offset the cost. If people are worried about the diminishing returns from a universal dividend as people use less fuel, then the Government could fix the payment amount for five years by using the National Land Transport Fund to cover the shortfall. The National Land Transport Fund seems appropriate because the tax and dividend would be a measure to reduce road demand, and if it doesn't work the Government will get their money back via the tax.
It might also help if the Government kept housing affordable because otherwise people would live in more affordable housing further away from their job and drive, rather than living closer and not driving. In which case, I wonder whether it would be better if the Government just paid them to stay home until they could be located closer to a job or practical public transport for a job.
Ideal Climate Tax Policy (added on 20/11/2020)
Following on from the previous discussion, the ideal climate tax policy would be to have both a Carbon Tax and an Emissions Trading Scheme. There are three actions that can be taken regarding emissions:
Using a Carbon Tax and Refund Scheme, set at the cost of cycling discussed above, addresses the first action because it makes the costs of climate pollution explicit. A cost is being added to the emissions that is equivalent to the cost required to not emit that amount in the first place.
An ETS adds to the first action but primarily addresses the second action. A government can budget for how many emissions they will accept, and how many they will offset by planting trees. This is the supply of ETS units. The market demand then determines the price of the limited supply.
Finally, some countries make an effort, and some countries do not. The added carbon price could cause the cost of goods produced by countries making an effort to be higher than those not making an effort. This perversely encourages countries to do nothing. To prevent this, the carbon prices should only apply to the country's domestic market, with anything leaving being exempt and anything coming in being charged.Recession
A large part of economic growth has been built on the productivity from fossil fuels, so spending more time travelling, due to not driving, may result in a "recession".
If economic output took the reduced future productivity due to climate disruptions into account then perhaps we would have been in a depression for years. On the other hand, there may be increased work from having to adapt to rising sea levels and extreme weather, and thus the popular view of the more we work, the happier we are, would suggest that our future standard of living will be exceptional.
Probably the only possible bad things about recessions are higher unemployment and reduced tax revenue for the Government. As long as the Government looks after redundant workers then a recession is not necessarily bad, and it may provide an opportunity for employed people to share their work around so they have more spare time (and so won't be as bothered about increased transit times from not driving). The reduced Government tax revenue is a separate issue, and if it is a problem for the Government's finances, it may be caused among other things by a lack of a wealth tax, estate tax or not having high enough progressive income tax.
1. Joel MacManus and Anuja Nadkarni (26 July 2019), NZ's biggest greenhouse gas emitters and their struggle to pollute less, stuff.co.nz
2. BlueScope Annual Reports, bluescope.com
3. Tiwai Point Aluminium Smelter, Wikipedia
4. OECD-FAO Agricultural Outlook 2019-2028, Data extracted on 08 Sep 2019 00:13 UTC (GMT) from OECD.Stat
5. Fonterra's Markets, fonterra.com
6. 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Volume 1, Chapter 8
7. David L. Chandler (8 May 2013), One order of steel; hold the greenhouse gases, MIT News Office
8. Mike Berners-Lee and Claire Hoolohan of Small World Consulting (26 September 2012), The greenhouse gas footprint of Booths (pg. 21), booths.co.uk
9. Guidance for voluntary, corporate greenhouse gas reporting: Data and methods for the 2007 calendar year, 3.1.2, mfe.govt.nz