Policy options to streamline the carbon market for agricultural nitrous oxide emissions

The majority of emissions of nitrous oxide – a potent greenhouse gas (GHG) – are from agricultural sources, particularly nitrogen fertilizer applications. A growing focus on these emission sources has led to the development in the United States of GHG offset protocols that could enable payment to farmers for reducing fertilizer use or implementing other nitrogen management strategies. Despite the development of several protocols, the current regional scope is narrow, adoption by farmers is low, and policy implementation of protocols has a significant time lag. Here we utilize existing research and policy structures to propose an ‘umbrella’ approach for nitrogen management GHG emissions protocols that has the potential to streamline the policy implementation and acceptance of such protocols. We suggest that the umbrella protocol could set forth standard definitions common across multiple protocol options, and then modules could be further developed as scientific evidence advances. Modules could be developed for specific crops, regions, and practices. We identify a policy process that could facilitate this development in concert with emerging scientific research and conclude by acknowledging potential benefits and limitations of the approach.

Key policy insights

• Agricultural greenhouse gas market options are growing, but are still underutilized

• Streamlining protocol development through an umbrella process could enable quicker development of protocols across new crops, regions, and practices

• Effective protocol development must not compromise best available science and should follow a rigorous pathway to ensure appropriate implementation

     

Perceived fairness and public acceptability of carbon pricing: a review of the literature

While carbon pricing is widely seen as a crucial element of climate policy and has been implemented in many countries, it also has met with strong resistance. We provide a comprehensive overview of public perceptions of the fairness of carbon pricing and how these affect policy acceptability. To this end, we review evidence from empirical studies on how individuals judge personal, distributional and procedural aspects of carbon taxes and cap-and-trade. In addition, we examine preferences for particular redistributive and other uses of revenues generated by carbon pricing and their role in instrument acceptability. Our results indicate a high concern over distributional effects, particularly in relation to policy impacts on poor people, in turn reducing policy acceptability. In addition, people show little trust in the capacities of governments to put the revenues of carbon pricing to good use. Somewhat surprisingly, most studies do not indicate clear public preferences for using revenues to ensure fairer policy outcomes, notably by reducing its regressive effects. Instead, many people prefer using revenues for ‘environmental projects’ of various kinds. We end by providing recommendations for improving public acceptability of carbon pricing. One suggestion to increase policy acceptability is combining the redistribution of revenue to vulnerable groups with the funding for environmental projects, such as on renewable energy.

Key policy insights

• If people perceive carbon pricing instruments as fair, this increases policy acceptability and support.

• People’s satisfaction with information provided by the government about the policy instrument increases acceptability.

• While people express high concern over uneven distribution of the policy burden, they often prefer using carbon pricing revenues for environmental projects instead of compensation for inequitable outcomes.

• Recent studies find that people’s preferences shift to using revenues for making policy fairer if they better understand the functioning of carbon pricing, notably that relatively high prices of CO₂-intensive goods and services reduce their consumption.

• Combining the redistribution of revenue to support both vulnerable groups and environmental projects, such as on renewable energy, seems to most increase policy acceptability.

     

Modelling complex systems of heterogeneous agents to better design sustainability transitions policy

This article proposes a fundamental methodological shift in the modelling of policy interventions for sustainability transitions in order to account for complexity (e.g. self-reinforcing mechanisms, such as technology lock-ins, arising from multi-agent interactions) and agent heterogeneity (e.g. differences in consumer and investment behaviour arising from income stratification). We first characterise the uncertainty faced by climate policy-makers and its implications for investment decision-makers. We then identify five shortcomings in the equilibrium and optimisation-based approaches most frequently used to inform sustainability policy: (i) their normative, optimisation-based nature, (ii) their unrealistic reliance on the full-rationality of agents, (iii) their inability to account for mutual influences among agents (multi-agent interactions) and capture related self-reinforcing (positive feedback) processes, (iv) their inability to represent multiple solutions and path-dependency, and (v) their inability to properly account for agent heterogeneity. The aim of this article is to introduce an alternative modelling approach based on complexity dynamics and agent heterogeneity, and explore its use in four key areas of sustainability policy, namely (1) technology adoption and diffusion, (2) macroeconomic impacts of low-carbon policies, (3) interactions between the socio-economic system and the natural environment, and (4) the anticipation of policy outcomes. The practical relevance of the proposed methodology is subsequently discussed by reference to four specific applications relating to each of the above areas: the diffusion of transport technology, the impact of low-carbon investment on income and employment, the management of cascading uncertainties, and the cross-sectoral impact of biofuels policies. In conclusion, the article calls for a fundamental methodological shift aligning the modelling of the socio-economic system with that of the climatic system, for a combined and realistic understanding of the impact of sustainability policies.     

The impact of the unilateral EU commitment on the stability of international climate agreements

The negotiation strategy of the European Union was analysed with respect to the formation of an international climate agreement for the post-2012 era. Game theory was employed to explore the incentives for key players in the climate policy arena to join future climate agreements. A ?20% unilateral commitment strategy by the EU was compared with a multilateral ?30% emission reduction strategy for all Annex-B countries. Using a numerical integrated assessment climate—economy simulation model, we found that leakage, in the sense of strategic policy reactions on emissions, was negligible. The EU strategy to reduce emissions by 30% (compared with 1990 levels) by 2020, if other Annex-B countries follow suit, does not induce the participation of the USA with a comparable reduction commitment. However, we argue that the original EU proposal can be reshaped so as to stabilize a larger and more ambitious climate coalition than the Kyoto Protocol in its first commitment period.     

Co-productive governance: A relational framework for adaptive governance

Adaptive governance focuses our attention on the relationships between science and management, whereby the so-called ‘gaps’ between these groups are seen to hinder effective adaptive responses to biophysical change. Yet the relationships between science and governance, knowledge and action, remain under theorized in discussions of adaptive governance, which largely focuses on abstract design principles or preferred institutional arrangements. In contrast, the metaphor of co-production highlights the social and political processes through which science, policy, and practice co-evolve. Co-production is invoked as a normative goal (Mitchell et al., 2004) and analytical lens (Jasanoff, 2004a, Jasanoff, 2004b), both of which provide useful insight into the processes underpinning adaptive governance. This paper builds on and integrates these disparate views to reconceptualize adaptive governance as a process of co-production. I outline an alternative conceptual framing, ‘co-productive governance’, that articulates the context, knowledge, process, and vision of governance. I explore these ideas through two cases of connectivity conservation, which draws on conservation science to promote collaborative cross-scale governance. This analysis highlights the ways in which the different contexts of these cases produced very different framings and responses to the same propositions of science and governance. Drawing on theoretical and empirical material, co-productive governance moves beyond long standing debates that institutions can be rationally crafted or must emerge from context resituate adaptive governance in a more critical and contextualized space. This reframing focuses on the process of governance through an explicit consideration of how normative considerations shape the interactions between knowledge and power, science and governance.     

Comparative assessment of Japan's long-term carbon budget under different effort-sharing principles

This article assesses Japan's carbon budgets up to 2100 in the global efforts to achieve the 2?°C target under different effort-sharing approaches based on long-term GHG mitigation scenarios published in 13 studies. The article also presents exemplary emission trajectories for Japan to stay within the calculated budget.

The literature data allow for an in-depth analysis of four effort-sharing categories. For a 450?ppm CO₂e stabilization level, the remaining carbon budgets for 2014–2100 were negative for the effort-sharing category that emphasizes historical responsibility and capability. For the other three, including the reference ‘Cost-effectiveness’ category, which showed the highest budget range among all categories, the calculated remaining budgets (20th and 80th percentile ranges) would run out in 21–29 years if the current emission levels were to continue. A 550?ppm CO₂e stabilization level increases the budgets by 6–17 years-equivalent of the current emissions, depending on the effort-sharing category. Exemplary emissions trajectories staying within the calculated budgets were also analysed for ‘Equality’, ‘Staged’ and ‘Cost-effectiveness’ categories. For a 450?ppm CO₂e stabilization level, Japan's GHG emissions would need to phase out sometime between 2045 and 2080, and the emission reductions in 2030 would be at least 16–29% below 1990 levels even for the most lenient ‘Cost-effectiveness’ category, and 29–36% for the ‘Equality’ category. The start year for accelerated emissions reductions and the emissions convergence level in the long term have major impact on the emissions reduction rates that need to be achieved, particularly in the case of smaller budgets.

Policy relevance

In previous climate mitigation target formulation processes for 2020 and 2030 in Japan, neither equity principles nor long-term management of cumulative GHG emissions was at the centre of discussion. This article quantitatively assesses how much more GHGs Japan can emit by 2100 to achieve the 2?°C target in light of different effort-sharing approaches, and how Japan's GHG emissions can be managed up to 2100. The long-term implications of recent energy policy developments following the Fukushima nuclear disaster for the calculated carbon budgets are also discussed.     

Innovation for sustainable energy from a pro-poor perspective

The development and transfer of clean energy technologies to achieve universal energy access is challenging due to the inherent complexities of the energy sector, and the energy governance and financial systems in developing economies. Innovation is an essential part of successfully addressing these difficulties. Duplicating the energy infrastructure models of developed countries will not be sufficient to meet the needs of poor consumers. To the extent that innovation can accelerate energy access, it is important to understand the specific types of innovations that are necessary and how they might be facilitated. The general features of existing international clean energy innovation systems, which are predominantly driven by the markets and emissions reduction mechanisms of developed and rapidly growing emerging economies, are reviewed and the alignment of these systems to the innovation processes required to extend energy access globally is evaluated. Drawing on the innovation policy literature, the attributes of effective international and domestic energy innovation systems that are pro-poor and the associated policy approaches are identified.     

The impact of shale gas on the costs of climate policy

The use of shale gas is commonly considered as a low-cost option for meeting ambitious climate policy targets. This article explores global and country-specific effects of increasing global shale gas exploitation on the energy markets, on greenhouse gas emissions, and on mitigation costs. The global techno-economic partial equilibrium model POLES (Prospective Outlook on Long-term Energy Systems) is employed to compare policies which limit global warming to 2°C and baseline scenarios when the availability of shale gas is either high or low. According to the simulation results, a high availability of shale gas has rather small effects on the costs of meeting climate targets in the medium and long term. In the long term, a higher availability of shale gas increases baseline emissions of greenhouse gases for most countries and for the world, and leads to higher compliance costs for most, but not all, countries. Allowing for global trading of emission certificates does not alter these general results. In sum, these findings cast doubt on shale gas’s potential as a low-cost option for meeting ambitious global climate targets.

POLICY RELEVANCE

Many countries with a large shale gas resource base consider the expansion of local shale gas extraction as an option to reduce their GHG emissions. The findings in this article imply that a higher availability of shale gas in these countries might actually increase emissions and mitigation costs for these countries and also for the world. An increase in shale gas extraction may spur a switch from coal to gas electricity generation, thus lowering emissions. At the global level and for many countries, though, this effect is more than offset by a crowding out of renewable and nuclear energy carriers, and by lower energy prices, leading to higher emissions and higher mitigation costs in turn. These findings would warrant a re-evaluation of the climate strategy in most countries relying on the exploitation of shale gas to meet their climate targets.     

Electricity generation and cooling water use: UK pathways to 2050

Thermoelectric generation contributes to 80% of global electricity production. Cooling of thermoelectric plants is often achieved by water abstractions from the natural environment. In England and Wales, the electricity sector is responsible for approximately half of all water abstractions and 40% of non-tidal surface water abstractions. We present a model that quantifies current water use of the UK electricity sector and use it to test six decarbonisation pathways to 2050. The pathways consist of a variety of generation technologies, with associated cooling methods, water use factors and cooling water sources. We find that up to 2030, water use across the six pathways is fairly consistent and all achieve significant reductions in both carbon and water intensity, based upon a transition to closed loop and hybrid cooling systems. From 2030 to 2050 our results diverge. Pathways with high levels of carbon capture and storage result in freshwater consumption that exceeds current levels (37–107%), and a consumptive intensity that is 30–69% higher. Risks to the aquatic environment will be intensified if generation with carbon capture and storage is clustered. Pathways of high nuclear capacity result in tidal and coastal abstraction that exceed current levels by 148–399%. Whilst reducing freshwater abstractions, the marine environment will be impacted if a shortage of coastal sites leads to clustering of nuclear reactors and concentration of heated water discharges. The pathway with the highest level of renewables has both lowest abstraction and consumption of water. Freshwater consumption can also be minimised through use of hybrid cooling, which despite marginally higher costs and emissions, would reduce dependence on scarce water resources thus increase security of supply.