Significant ongoing removals will also be needed to draw down atmospheric CO2, even after gross long-lived gas emissions are net-zero, with a plausible need for removals on the scale of 10-20Mt per year out to 2100.

The government is reviewing the NZ ETS to “prioritise gross reductions, while maintaining support for removals.”

As background to this consultation, I think it is useful to ask what level of gross long-lived gas reductions AND what level of removals might be consistent with global 1.5C scenarios, and what that could mean for New Zealand and the NZ ETS.

1. Gross emissions reductions in global scenarios

IPCC sixth assessment report

In the IPCC Sixth Assessment Working Group III report, a set of “illustrative mitigation pathways” show a range of possibilities for how temperature targets can be achieved. The figure below shows current emissions as well as modelled emissions and removals when net-zero CO2 is reached in pathways that hold temperature rise below 2 degrees.

An extract from Figure SPM.5 of the IPCCC Sixth Assessment Report Working Group III Summary for Policymakers. IMP-GS is a <2C scenario with 67% probability; IMP-Neg is <1.5C 50% probability with high temperature overshoot, and IMP-LD, IMP-SP and IMP-Ren are <1.5C with 50% probability with no or limited temperature overshoot.

It is immediately obvious that gross CO2 emissions are massively reduced in all these scenarios: by over 80% in the <2C and <1.5C high-overshoot scenarios, and by over 90% in 1.5C scenarios with no or limited overshoot. In these pathways non-CO2 emissions like methane are also deeply reduced (grey bars), but are not net-zero: for example the reduction for agricultural methane from the IPCC Special Report on 1.5C of Warming is 24-47% globally in 2050.

Most of the removals occur within the energy sector (labelled ‘Energy Supply (neg)’, orange bars), such as from bioenergy carbon capture and storage (BECCS) or from direct air capture (DAC), technologies which store CO2 permanently underground. There is very little offsetting with removals from land-use, land-use change, and forestry (labelled ‘LULUCF’, green bars). Only 4% of the initial CO2 emissions are balanced by land sector removals at net-zero in these scenarios.

So while CO2 overall is “net zero” around 2050 in the low and limited overshoot scenarios, this is actually made up of over 95% reductions within emitting sectors (including geological removals), and only a very small fraction of residual emissions are balanced by land sector removals.

IEA net-zero energy scenario

Similarly, the International Energy Agency’s net-zero energy (NZE) scenario is a <1.5C scenario with low/limited overshoot, and assumes no offsetting with land sector removals. As in the IPCC pathways, gross emissions are cut by well over 90%, with the remainder balanced by removals within the sector (BECCS and DAC).  

The NZE has per-capita emissions convergence between developed and developing countries at around 1 tonne per capita in 2040, and net-zero globally in 2050. However it is worth noting that developed countries’ responsibility is not only for their own emissions reductions: developing countries’ ability develop and provide universal energy access, while holding emissions to 3t/cap and below, is only possible with climate finance and carbon market funding.

New Zealand's energy and industrial emissions were around 7 tonnes per capita in 2021, broadly similar to the advanced economy average (7.9t in 2020), although the IEA numbers also include international aviation and shipping. If New Zealand aspires only to remain average for an advanced economy, that would mean dropping per-capita CO2 to 3.8t in 2030 and 0.8t in 2040.

Gross and net CO2 emissions, and per capita CO2 emissions in the International Energy Agency Net-Zero Energy Scenario.

Science-based Targets Initiative

The Science-Based Targets Initiative (SBTi) aims to provide 1.5C benchmarks for corporate target setting. Consistent with the IPCC pathways and IEA NZE, the SBTi cross-sector pathway reduces gross emissions by at least 42% by 2030 and 90% by 2050 levels before considering the effect of CO2 removals.

Implications for New Zealand

New Zealand’s Climate Change Response Act sets a net-zero target in 2050 for long-lived gases, but allows this net target to be met by any combination of gross emissions reductions and CO2 removals from the land sector. This is entirely inconsistent with the global-scale pathways consistent with 1.5C, which have deep reductions in gross emissions and only a small quantity of residual emissions offset.

As a historical note, it was not originally the intention to allow New Zealand’s high forestry potential to delay domestic emissions reductions. At the time of the Kyoto Protocol negotiations (when the “net” target formulation was first developed), the New Zealand government Q&A said the following:

4.Will the inclusion of sinks mean that New Zealand has to do nothing about emissions?

No. Including sinks in the manner proposed by New Zealand would not protect emitters from facing up to the costs of adjusting to lower levels of emissions. New Zealand has pledged that it will place any 'credits' from forest sinks onto the world market meaning that New Zealand sink credits will be available to all developed country emitters. On the other hand, New Zealand emitters would have access to the least costly abatement opportunities wherever they occur within developed countries. Trading effectively creates a 'world price' for emissions that all players would have to face.

2. CO2 removals in global scenarios

In IPCC scenarios consistent with keeping temperature to <1.5C, the world exceeds the carbon budget consistent with 1.5C, and needs to compensate by permanently removing a substantial quantity of CO2 from the atmosphere with technological and nature-based solutions.

This requires net-negative CO2 emissions globally in the second half of this century. The figure below shows that if there is a delay in gross emissions reductions (the grey vs blue scenarios) then emissions need to be even more negative after 2050 to compensate.

In IPCC 1.5C scenarios, global CO2 emissions are net-negative in the second half of this century to draw down overshoot of the emissions budget for 1.5C (Figure SPM.3A of IPCC Special Report on Warming of 1.5C).

The IPCC Sixth Assessment Report Working Group III Summary for Policymakers (Table SPM.2) quantifies the necessary level of net-negative CO2 emissions between the time of net-zero and 2100. This is around 220Gt cumulatively to 2100 in 1.5C scenarios where global emissions fall extremely rapidly starting immediately, and 360Gt in scenarios where there is a larger overshoot, which seems inevitable at this point. Note that the total quantity of removals will be even larger than this, because there are still some residual gross emissions to offset.

Implications for New Zealand

New Zealand has been part of exceeding the global carbon budget. Ministry for the Environment calculations put our historical share of net CO2 at 2.6 times the global per-capita average.  A significant part of New Zealand’s contribution to warming since 1850 is a result of deforestation, which makes a higher contribution to current warming than fossil fuels emitted so far (and current warming from agricultural gases is higher than each of these).  

Along with other developed countries and large emitters, New Zealand will need to play a part in drawing down CO2 from the atmosphere. A 2.6 times per-capita share of 360Gt could be well over 500Mt of net-negative emissions cumulatively by 2100. However our fair share would not just be to correct our per-capita contribution, but would also take into account our capacity as a rich country, and our ability to act (as a country with deforested land able to be restored and geology suitable for CO2 storage). As such, New Zealand could be responsible for removing on the order of 10-20Mt per year on an ongoing basis out to 2100 and beyond.

The total level of removals needed will also depend on the speed of gross emissions reductions, as residual gross long-lived gas emissions will also need to be offset. This is sketched below: a rapid drop in gross emissions (orange line) reduces the need for removals to achieve the net-zero domestic target path (light green area), but a large quantity of removals (dark green area) is still required in either case as New Zealand’s share of drawing down the global overshoot in historical emissions. The total level of removals (light + dark green) is higher if gross emissions fall slowly.

For New Zealand, removals will be needed both to offset residual gross long-lived gas emissions (to meet and then maintain net-zero emissions) and also as New Zealand’s share of drawing global emissions in excess of the 1.5C carbon budget.

Removals will be needed to offset residual ETS sector emissions to meet and maintain the net-zero target, but also: 

• to offset nitrous oxide emissions, which are also part of the net-zero target
• to offset emissions from international aviation and shipping when these are brought into the net-zero target
• to reduce or avoid the need for international cooperation in meeting future Paris Agreement NDCs
• for voluntary offsetting, including the Carbon Neutral Government Programme, and
• to allow for agricultural methane emissions to be offset if customers demand this (which appears to be increasingly the case). The Parliamentary Commissioner for the Environment calculated using a GWP* metric that fully compensating the warming impact of all New Zealand’s remaining agricultural methane emissions (after a 24-47% gross reduction) would require several million hectares of additional forestry.
• International demand for cooperation in CO2 drawdown from countries that do not have land suitable to reforest or suitable geology for permanent storage.

Together, these suggest that there is very low risk there not being sufficient demand for 10-20Mt of removals per annum on an ongoing basis.

3.    The high-level conclusion?

• Gross reductions in long-lived gases should be prioritised, at a significantly faster rate that the Climate Change Commission’s Demonstration Path. A 1.5C consistent target would be around a 90% reduction in gross emissions in 2050, and this would have New Zealand tracking average per-capita emissions for advanced economies in the IEA net-zero energy scenario.

• Demand for removals will not be limited to offsetting residual ETS emissions. Significant removals will be needed to drawn down atmospheric CO2 even after gross long-lived gas emissions are net-zero. There is plausibly the need for ongoing removals of the scale of 10-20Mt per annum out to 2100.

If the government wants 1.5C consistency, it therefore needs to adjust the policy framework to both drive deep reductions of gross long-lived gas emissions and provide stable support for appropriate quantities and types of removals.

Chistina Hood is an internationaly recognised policy expert in climate change energy, and carbon pricing at Compass Climate, Aotearoa.