leading partners in science interactions of metrics and alternative policy settings at a country...

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Interactions of metrics and alternative policy settings at a country level:a case study from New Zealand

Andy Reisinger1 Adolf Stroombergen2

K. Riahi2 O. van Vliet2

P. Havlik2,3 M. Obersteiner2 M. Herrero3

1 New Zealand Agricultural Greenhouse Gas Research Centre2 Infometrics Consulting3 International Institute for Applied Systems Analysis (IIASA)

Published in Proceedings of the Tyndall Conference 2011 (McGovern and Bates, editors)

Copyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre April 18, 2023 | 1


In a nutshell

Globally, different metrics have only a minor impact on

mitigation costs IF the world follows a cost-minimising emissions pathway to limit long-term radiative forcing

What are regional implications of alternative metrics for agricultural production and non-CO2 emissions?

New Zealand is the developed country with the largest fraction of agricultural GHG emissions (almost 50%)

How would the cost of meeting economy-wide emissions targets change for New Zealand under different metrics?



energy - transportenergy - stationaryindustryagriculture

waste


New Zealand’s emissions profileunder 20-, 100- and 500-year GWPs

Limited abatement potential for pastorallivestock production (>95% of ag emissions)

Is a lower CH4 weight better for New Zealand?


Complex, nested problem

Metrics affect mitigation costs for an individual country in multiple, interconnected ways:

•Balance and quantity of CO2 and non-CO2 emissions, and targets and assigned amount units (under Kyoto-type regime)

•Global CO2-eq prices for the world as a whole to meet an agreed long-term goal

•Agricultural production costs, competitiveness, and international agricultural commodity prices

In this study, we assume that the world will adjust GHG prices/mitigation efforts to meet agreed long-term goals



MESSAGECalculates cost-effective multi-gas emissions pathways and mitigation costs over the 21st century to meet a pre-determined stabilisation target in the year 2100.

MESSAGECalculates cost-effective multi-gas emissions pathways and mitigation costs over the 21st century to meet a pre-determined stabilisation target in the year 2100.

MAGICC version 6Calculates exchange rates between CO2 and non-

CO2 gases, for alternative bio-physical metrics and

policy choices for treatment of agriculture.

Calibrated to complex coupled climate models

MAGICC version 6Calculates exchange rates between CO2 and non-

CO2 gases, for alternative bio-physical metrics and

policy choices for treatment of agriculture.

Calibrated to complex coupled climate models

non-CO2

metrics

GLOBIOMCalculates changes in agricultural production and commodity price indices up to 2050, based on detailed spatially explicit modelling of agricultural products and trade.

GLOBIOMCalculates changes in agricultural production and commodity price indices up to 2050, based on detailed spatially explicit modelling of agricultural products and trade.

ESSAMCalculates changes in economic activity in New Zealand in 2020 and 2050, relative to ‘no climate policy’, for prescribed economy-wide emissions targets expressed in percentage relative to 1990.

ESSAMCalculates changes in economic activity in New Zealand in 2020 and 2050, relative to ‘no climate policy’, for prescribed economy-wide emissions targets expressed in percentage relative to 1990.

GHG prices and bioenergy demands

Commodity price index

global CO2 prices

used in emissions trading

metricsto account for non-CO2 gases

in emissions targets

Model Linkages



Use GLOBIOM to model agricultural production to 2050

• Spatially explicit partial equilibrium model for agriculture and forestry, including trade (Havlik et al. 2010)

• Impose prices for CO2, CH4 and N2O and biofuel demands from global MESSAGE runs for 450ppm target:

100-year GWPs (default)Fixed 100-year GTPsagricultural non-CO2 emissions excluded

• Explore regional agricultural production and GHG emissions under additional GHG costs in all regions, and effects on supply / commodity prices of livestock products

Regional implications for livestock production


Global agricultural CH4 emission pathwaysCopyright © 2010 New Zealand Agricultural Greenhouse Gas Research Centre April 18, 2023 | 7

Regional changes in cattle milk productionin 2030, relative to no-mitigation

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Metrics have different effects regionally.

In most regions, the decision to impose a cost at all has a bigger effect

than the choice of metric.

Metrics have different effects regionally.

In most regions, the decision to impose a cost at all has a bigger effect

than the choice of metric.



Changes in product supply prices

0.0

Where future production increasesrequire land-use change, CO2 pricesdominate the response.

Otherwise, non-CO2 prices aremore important.



Changes in livestock commodity price index



Competing effect of metrics. Fixed 100-year GTPs would:

•Reduce burden of hard-to-mitigate non-CO2 gases•Raise global carbon prices and bioenergy demand•Result in lower increase in livestock commodity price index

Assume emissions targets -15% by 2020 and -50% by 2050

Scenarios evaluated: GWPs or fixed 100-year GTPs

•Policy choices:– Full global participation in mitigation of agricultural emissions

– Sensitivity tests:

» NZ only country to apply price on its agricultural emissions

» Agricultural non-CO2 emissions excluded from all obligations

• Technology: 50% reduction technology in enteric fermentation

National-level implications of metrics for NZ



National-level implications for New Zealand• metrics for emissions targets• carbon prices• commodity price index• policy assumptions



Net effect of metrics on NZ depends on policy setting

•NZ gains from full global participation in agricultural mitigation due to increasing livestock commodity price index

•NZ is better off if everybody mitigates agricultural emission than if nobody does, despite having large fractional ag emissions itself and assuming no mitigation opportunities for agriculture within NZ

•NZ loses if it is the only country to fully price agricultural emissions

•GTPs mute economic effects of mitigation on New ZealandIf NZ benefits, it would benefit more under GWPs than GTPsIf NZ incurs costs, costs would be greater under GWPs than GTPs

•Benefits from any additional enteric CH4 abatement technologies

would be greater under GWPs than under (fixed 100-year) GTPs

National-level implications of metrics for NZ



Alternative metrics affect different regions differently depending on the GHG efficiency of production and relative roles of CO2 and non-CO2 prices on production/expansion within a global trade system

In most regions, the decision to fully expose agriculture to the cost of its emissions is more important than the metric

Metrics matter for New Zealand net mitigation costs, but alternative policy scenarios matter much more (including determining whether NZ receives net benefits or costs from mitigation and its global implementation).

GTPs would mute both positive and negative effects on NZ

Caveat: weak link between models, and idealised scenarios

Conclusions



Questions to the policy community What regional dimensions of metrics are most important? Cost?

Market access? Local food production? Most vulnerable sectors (measured how)?

How can they be expressed so that they become tractable for further scientific / economic analysis? What assumptions are relevant for sensitivity tests?

Given the intricate links between metrics and other policy choices, does it make sense to evaluate the economic effects of metrics in isolation? What real-world assumptions would be most useful and relevant to study?

What work would be useful regarding the political economy and social dimensions of metrics?

leading partners in science interactions of metrics and alternative policy settings at a country...

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