Professor Dave Frame on climate policy

An interesting and sensible interview with Professor Dave Frame of Victoria University’s Climate Change Research Institute in the NZ Herald:

Q. On New Zealand’s new target of reducing its greenhouse gas emissions by 30 per cent from 2005 levels and 11 per cent from 1990 levels by 2030. Do you see this as a reasonable commitment?

You can see it as glass half full or glass half empty.

It’s true we could be doing more; but claims that we are radically behind Europe are a bit overblown – our 2005-2020 commitments have been roughly in line with what would have been expected of us if we had been a country within Europe, with the same per capita income we currently have.

I think that is pretty spot on. We certainly could do more but the claims we are radically out of step with other developed countries is not true. No matter what our policy is, some groups would claim it is disastrously low.

Q. Given criticism of the effectiveness of carbon trading markets, do you hold any concerns with countries relying on systems like the NZ Emissions Trading Scheme to meet their targets?

Trading is more economically efficient than other ways of limiting emissions, such as regulation or taxes.

The issues around our weak price have more to do with policy choices such as the two-for-one deal, our access to cheap hot air units and so on.

It’s not that the ETS itself is inefficient, it’s that some of the policy choices that surround it are enfeebling.

The ETS is a sensible market response to something that has a negative external cost. The two for one deal was needed in the early days to lessen the impact, but I think the time has come to phase it out.

The other weakness in the ETS is the lack of a binding post-Kyoto agreement means the market price for carbon “permits” has dropped dramatically. But post Paris one may see it go up significantly which will mean the emissions market will send stronger price signals.

Q. Are there any areas – such as policy for developing nations – where you see New Zealand making any meaningful difference at COP21?

We can have more influence with our ideas than we can through our emissions alone.

Fossil fuel subsidy reform is arguably our most valuable contribution to date – by getting countries to focus on eliminating bad policies we can leverage emissions reductions far in excess of anything we can do at home.

So far, we’ve been the country that has thought the most about agriculture and climate change, but the issues we have in the agricultural sector are mirrored in many developing countries.

If we can create policies that contribute usefully to international efforts, work for us, and are attractive for others to adopt, we can help shape the way climate policy develops.

This is important. One can also contribute significantly through thought and policy leadership, not just through what happens to your own emissions in a particular year.

Q. In terms of the big picture: who are the big players, why, and how much depends on them to come away with a robust agreement?

There is a scale parameter to climate policy – the smaller you are the less you capture the benefits of your mitigation.

So the big guys will lead and set the precedents whatever they do — either by creating a world where strong policy is the norm or one where weak policy is the norm.

What we can do is suggest ideas that other countries might find useful as they think about climate policy.

As I say get the Big 10 to agree, and everyone else will follow. But the minnows can’t dictate to the big emitters.

Q. Generally, what do you anticipate will be the biggest stumbling blocks at Paris to limiting temperature rise to 2C this century? From attending previous conferences, are you somewhat cynical about getting a good outcome?

Paris should be judged on its ability to get countries to participate in climate policy, subject to some meaningful but basically domestic compliance mechanisms.

It won’t limit warming to 2C, and it’s unrealistic to expect it to do so.

The three main things you need from an international climate agreement are participation, compliance and stringency.

Kyoto made a mistake by focusing on stringency for some before participation by all.

That’s the wrong approach in a problem like this.

Paris is a chance to start over, focusing on getting broad buy-in and potentially signalling some carrots and sticks around compliance.

On the whole, we should judge Paris on the basis of its ability to get everyone to offer something.

Paris is a very important building block and direction setter.

Q. Much has been made of what this conference means for the fate of the planet. Is this really our last chance to achieve a 2C limit before it’s too late?

We’ve been having these last chances for years.

There are several reasons that’s a bad way to view the negotiations: (1) negotiations alone can’t determine that outcome; (2) repeated threats regarding last chances have diminishing credibility; (3) the 2C target is an aspiration, not a physical threshold – there’s no evidence that the world is radically different at 2.1C than it is at 1.9C; (4) choices made today to limit emissions out to 2030 or 2040 cannot guarantee remaining under 2C, because the actions of future generations matter crucially, too.

What we can and should do, is be clear about how to give those future people the best possible shot at limiting warming.

And that means focusing on limiting cumulative emissions of carbon dioxide.

The “last chance” thing is neither compelling nor constructive, nor credible.

The media should take note of this. Every conference since 2001 has been billed the “last chance”. It is wrong, and counter-productive.