Table A4.1: Schedule of possible environmental effects identified in relation to greenhouse gas emissions

Electricity supply

Increased share of renewable energy sources in electricity generation capacity

Decreased pressure (CO₂)

Immediate–medium term

Ongoing, effect increasing with emissions price. Initial effects relate to use of existing generation. The impact on new investment is modest initially (renewables prominent in base case as well), increasing relative to base case over the study period. Relative size of absolute emission reduction effect declines as renewables start to dominate system and less thermal is displaced.

High
Positive

Electricity demand

Increased demand for electricity due to fuel switching

Increased pressure (CO₂)

Immediate–early

Transitional effect only due to increased operation of carbon-intensive thermal generation at peaks in early years of ETS-plus

Moderate–high
Negative

Electricity demand

Reduced household, farm and small business use of electricity

Decreased pressure (CO₂)

Immediate

Ongoing and increasing over time with emissions price, rate of change heavily affected by non-price measures as well.

Moderate–high
Positive

Transport, agriculture and service industries

Reduced demand for liquid fuels

Decreased pressure (CO₂)

Early–medium

Ongoing while fossil fuels dominate transport fuels. Initial impacts will come from measures such as fuel efficiency and driver education; emission price effects will only become apparent over other price effects as emission price rises.

High
Positive

Transport, agriculture

Fuel switching to biofuels

Uncertain (CO₂)

Early–medium

Small effect initially, rising with increased use of biofuels. Any use of biofuels will reduce recorded domestic emissions relative to base case but global emission reduction depends on fuel source.

Moderate
Positive

Agriculture

Reduced conversion from forest to dairy

Decreased pressure (CO₂, methane, nitrous oxide)

Immediate–early

Ongoing effect, becoming more significant as emission costs rise. The reduction in land clearance is noted under avoided deforestation. The additional effect noted here is lower methane and nitrous oxide from dairying emissions relative to the base case.

Moderate
Positive

Agriculture

Changes in the scale and nature of dairying

Decreased pressure (methane, nitrous oxide)

Early–medium

Ongoing effect, increasing as emission costs rise. The initial effect is likely to be modest until points of obligation are established and emissions measurement takes place. The effect will be pronounced from 2013, with actual rates of change dependent on a range of factors including technology, its uptake and world prices.

Moderate
Positive

Agriculture

Reduced extensive pastoral farming

Uncertain (methane)

Early–medium

This change is likely to be most extensive post 2013, and as a range of alternative land uses including dairying, forestry and biofuel crops are possible. The overall effect on GHGs of these changes is uncertain.

Moderate
Uncertain

Agriculture

Reduced extent of arable farming

Uncertain (nitrous oxide)

Early–medium

This change is likely to be most extensive post 2013, and as a range of alternative land uses including dairying, forestry and biofuel crops are possible, the overall effect on GHGs of these changes are uncertain.

Moderate
Uncertain

Forestry

Avoided deforestation, relative to base case

Decreased pressure (CO₂)

Immediate

Ongoing, and likely to increase as emission price increases.

High
Positive

Forestry

New afforestation, relative to base case

Decreased pressure (CO₂)

Immediate–early

Ongoing and likely to increase as emission price rises.

High
Positive

Forestry

Increased management of forests for carbon storage, relative to base case

Decreased pressure (CO₂)

Early–medium

Small effect initially, potentially significant for pre-1990 forests, and regenerating indigenous vegetation depending on post-2012 outcomes.

Moderate–High
Positive

Manufacturing

Reduced use of fossil energy and fossil feedstock

Decreased pressure (CO₂)

Early–medium

Ongoing and likely to increase as emission price rises. Small effect initially. Potential for significant step changes in domestic emissions but also potential for emissions leakage. Overall rate of change depends on technology as well as emissions price.

Low–moderate
Positive

Mining

Reduced fugitive emissions and emissions from energy use

Uncertain – decrease (CO₂, methane)

Immediate–early

Ongoing and likely to increase as emission price rises. Any fall in output will reduce domestic GHG emissions but there is likely to be some emissions leakage to overseas mining operations.

Low
Uncertain

Fishing

Reduced fuel use relative to base case

Decreased pressure (CO₂)

Immediate–early

Ongoing and likely to increase as emission price rises.

Low
Positive

Waste

Reduced fugitive emissions from landfills

Decreased pressure (methane)

Early–medium

Ongoing, and likely to increase as emission price rises. Overall effect of ETS-plus is likely to be small before waste enters scheme in 2013. Reduced pressure due to both diversion of organic waste and increased incineration; the latter does of course lead to CO₂ emissions but the net effect is to reduce emissions pressure.

Low
Positive