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Hit the lowest hanging fruit to cut carbon

Until now, emissions from cars and trucks have been the focus of little attention in the climate change debate, yet in a world of hard solutions, decarbonising road transport could be the easiest, writes Paul Winton of the 1.5 Project.  

The +1.5C climate target is getting a real head of steam now. It is central to the Zero Carbon Bill that recently began its journey through Parliament and features heavily in Auckland’s climate commitment in the C40 grouping of major cities worldwide. But what is it, can we achieve it, and how?

The short answer to whether the +1.5C target is achievable is that we’ll have to keep making the few reductions we are currently - and begin many more. And we’ll have to almost completely decarbonise road transport by 2030.

That’s because road transport is the lowest hanging fruit we have for reductions. It is the bit that has had the least focus, yet it is achievable.

To understand this focus one must look at the whole emissions landscape. The IPCC tells us: “In model pathways with no or limited overshoot of 1.5°C, global net anthropogenic CO2 emissions decline by about 45 percent from 2010 levels by 2030”.

The maths tells us we need to reduce net emissions from 57 million tonnes in 2017 to 26 mt (a 54 percent reduction) by 2030 to hit the IPCC +1.5C target. That’s a lot. Some analysis shows we can get there - but where will we need to focus to find 31 mt of net emissions reductions? Should we stop drinking milk? Or stop going to Fiji? Or work on the big factories with cartoonish clouds of smoke coming out the top?

 ... going vegan is a great idea but won’t move the dial much since some 85 per cent of our food is exported

Net emissions can be considered across six, somewhat simplified, areas: Agriculture, electricity, factories, waste, trees and road transport.

Agriculture accounts for 39 mt or half of all emissions. Firstly, going vegan is a great idea but won’t move the dial much since some 85 per cent of our food is exported. Secondly, biological techniques to reduce emissions per animal take a large investment to develop and long time to disseminate down to farm level. This makes it hard on a 2030 timeline, but holds much promise from 2030 to 2050. Lastly, reducing herd size is possible but economically challenging for farmers.

The Zero Carbon Bill is shooting for a 10 percent reduction in agriculture emissions, or 4 mt per annum, by 2030. Even that small amount is getting pushback from the agriculture sector and some political quarters. Don’t bank on more unless public sentiment and the politics change a lot.

Electricity accounts for some 5 mt through coal and gas. It has been announced that coal will be largely shut down in the next decade and gas peakers will be challenged by batteries and renewables. We’ll get around 3 mt of reductions here.

Factories account for 12 mt a year. If Fonterra and friends move away from coal for drying milk, and other process heat applications shift to electric we might reduce emissions by about 4 mt a year. This might be more but gas is so cheap and there are no incentives to change from gas heat to electric or clean heat. And for many businesses, like the Tiwai Point aluminium smelter, a different chemical process is needed. So you either shut them or leave them be. We might need to come back to shutting Tiwai Point and other big emitters but for now I’ll assume they stay.

Waste and leaky gas pipes give a further 4 mt of reductions as we move to better management of our landfills (4 mt of emissions), and plug the leaky gas fields (2 mt of emissions). And planes? Forget about any change of note out to 2030 as their emissions are small (2-3 mt of 81 mt) and fixing planes is really hard.

Trees are next in line, soaking up 24 mt every year. They are nature’s carbon sinks and hold a critical role. The Crown is working on the trees through their Billion Trees programme and forecasts we will get around 5 mt of the 31 mt reductions from the Billion Trees. There’s currently no appetite for more by 2030.

So 4 mt from agriculture, 3 mt from electricity, 4 mt from factories, 5 mt from trees and 4 mt from fixing waste and leaky gas fields. That adds up to 20 mt versus the 31 mt we need.

Replacing the fleet

That leaves road transportation. If its emissions were reduced by about 75 percent by 2030, equal to 14 mt of emissions, we would achieve 31 mt of emission reductions across the economy to meet our goal of a +1.5C world. And maybe in a world of hard solutions, road transport is the easiest one.

It is often, wrongly, assumed that decarbonising transport requires replacement of the whole fleet with expensive electric.

But, some people argue, we’ll have to replace the whole fleet and that’s not possible! And electric cars are expensive! And I want my ute!

Let’s look at how this might play out with the passenger fleet as an example. Similar arguments can be made for the heavy fleet.

It is often, wrongly, assumed that decarbonising transport requires replacement of the whole fleet with expensive electric. But we don’t need to do that to strip most of the emissions out of transport.

The simple summary is that if we do three things -- increase car occupancy, decrease emissions in line with other countries and increase electric vehicle adoption in line with Norway by 2025 -- we can reduce passenger emissions by about 65-75 percent by 2030. If we do similarly for the heavy fleet, albeit with different focus, this gets us the 10-11 mt reductions we need.

Firstly, we have to focus on getting car occupancies up from 1.5 to 2 by 2030 and therefore cars and emissions down. This would take 20 percent of the cars off the road and 20 percent of the emissions with it. And this has already been done around the world using things like T2/3 lanes, low emissions zones, ride sharing models and importantly mode shifts like moving lone travellers to buses, trains, bikes and scooters. The missing piece here is some focus from councils including making it a measured performance indicator.

... the EVs are coming. Like you wouldn’t believe.

Secondly, we need to get the emissions per internal combustion engine (ICE) vehicle down by at least one third by 2030. New Zealand emits about 180 grams per km of light vehicle travel and has one of the loosest emissions regimes in the OECD. As a comparison, the 2020 European new car standards allow for 95 grams per km. By 2014 the average emissions of new light vehicles manufactured and registered in Japan met the target of 105 grams CO2/km. Reducing fleet emissions from 180 to 120 grams by 2030 doesn’t seem that tough, aligns well with our second hand fleet coming from Japan and is helped by The Ministry of Transport’s Clean Car Standard proposals published earlier this week. So a further one third reduction here.

Lastly, we need more electric cars (EVs) and specifically we need to reach an EV adoption rate like Norway has today by 2025. This gives us a further 20 percent reduction. For many, our exposure to EVs is the funny looking Nissan Leaf, often old and tired with less range than you’d like. But the EVs are coming. Like you wouldn’t believe.

In May leading analyst Bloomberg New Energy Finance confessed they’d got it wrong again. In 2017 they’d forecast sticker price parity of EV with ICE by 2026. Then in 2018 they forecast 2024. Then in May this year they said actually it’s more like 2022. And maybe earlier. So by 2022, or maybe earlier, buying a new EV will be the same as an ICE. Only the running costs of the EV will be 30 percent of the cost of running an ICE. Why would you buy a new petrol or diesel car?

And the vehicle supply is coming too. Almost all car companies have radically revisited their electrification plans in the last year. Ford has announced 16 new models by 2025, GM has 20 new models by 2023, Mercedes 10 by 2022, Audi will release 20 electric models by 2025 and the list goes on and on.

Somewhere in 2022-2025 there will be dozens of EVs available in any category one should want, from light passenger to heavy long range SUV. And all for less than the cost of an ICE. Given that most new cars are bought by businesses like those in the Climate Leaders Coalition who want to show green credentials, new ICE sales will be in the minority. And second hand EVs will increasingly flow into New Zealand supported by the proposed Clean Car Standard from the Ministry of Transport.

This story necessarily makes some assumptions about the future. But they’re not so bold as to be crazy and show that if as a nation we just focus on a few things within transport, we’ll be well on our way to a much lower carbon New Zealand.

Paul Winton is an investment consultant. Over the past nine months he has been identifying ways New Zealand can deliver on its climate change obligations, and recently launched “The 1.5 Project” .

Look out on Sunday for Rod Oram’s column digging into the details of the Clean Car Standard and the Clean Car Discount policies.

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