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 Centre
2 Infometrics Consulting
3 International Institute for Applied Systems Analysis (IIASA)
Published in Proceedings of the Tyndall Conference 2011 (McGovern and Bates, editors)
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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?
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New Zealand’s emissions profile
under 20-, 100- and 500-year GWPs
energy - transport
energy - stationary
industry
agriculture
waste
Limited abatement potential for pastoral
livestock production (>95% of ag emissions)
Is a lower CH4 weight better for New Zealand?
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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
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Model
MAGICC version 6
Calculates exchange rates between CO2 and nonCO2 gases, for alternative bio-physical metrics and
policy choices for treatment of agriculture.
Linkages
Calibrated to complex coupled climate models
non-CO2
metrics
MESSAGE
Calculates cost-effective multi-gas emissions
pathways and mitigation costs over the 21st century
to meet a pre-determined stabilisation target in the
year 2100.
GHG
prices and
bioenergy
demands
GLOBIOM
Calculates changes in agricultural production and
commodity price indices up to 2050, based on
detailed spatially explicit modelling of agricultural
products and trade.
Commodity
price index
metrics
to account for
non-CO2 gases
in emissions
targets
ESSAM
Calculates changes in economic activity in New
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Zealand
in 2020 and 2050, relative to ‘no climate
policy’, for prescribed economy-wide emissions
targets expressed in percentage relative to 1990.
global CO2 prices
used in emissions
trading
Regional implications for livestock production
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 GTPs
 agricultural 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
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Regional changes in cattle milk production
in 2030, relative to no-mitigation
GWPs
GTPs
agriculture excluded
20,000
Eastern Europe
Former Soviet Union
North America
Pacific OECD
South Asia
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Pacific Asia
In most regions, the decision to
impose a cost at all has a bigger effect
than the choice of metric.
Africa
-60,000
Metrics have different effects
regionally.
Western Europe
-40,000
Centrally planned Asia
-20,000
Middle East and Northern Africa
0
Latin America
regional changes in milk production
(1000 tonnes per annum)
40,000
Global agricultural CH4 emission pathways
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Changes in product supply prices
Where future production increases
require land-use change, CO2 prices
dominate the response.
Otherwise, non-CO2 prices are
more important.
0.0
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Changes in livestock commodity price index
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National-level implications of metrics for NZ
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
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National-level implications for New Zealand
•
•
•
•
metrics for emissions targets
carbon prices
commodity price index
policy assumptions
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National-level implications of metrics for NZ
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 Zealand
 If NZ benefits, it would benefit more under GWPs than GTPs
 If 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
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Conclusions
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
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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?
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