Water Journal : Water Journal September 2011
feature article water SEPTEMBER 2011 55 place for over 12 months now, and the recently released Report on the New Zealand Emissions Trading Scheme shows that 1340MW of new renewable generating capacity was consented in the past year, with no fossil-fuelled plants being consented. This is a five-fold increase in renewable consenting when compared with the past decade. NZ is also now on target to meet the Kyoto obligations, with net emissions down for the second consecutive year, the first time since 1990. Interestingly, the NZ carbon price is lower than that proposed in Australia. Potential Impact on the Water Industry Under the current global framework for climate change (the Kyoto Protocol) ratified in 2007, the Australian Government annually reports on greenhouse gas emissions from various sectors, including wastewater handling under the waste sector. The most recent report on Australia's emissions was compiled by the Department of Climate Change and Energy Efficiency (DCCEE) 2011, and outlined that the total emissions from wastewater handling was 3.0 Mt CO2 --e out of a national total of 364.5 Mt CO2 --e in 2009; this represents less than 1% of total emissions. Wastewater treatment emissions include fugitive emissions in the form of methane, carbon dioxide and nitrous oxide. The numbers imply that the direct fugitive emissions from wastewater treatment are minimal compared to the remaining sectors that are normally accounted for in national emission inventories. Table 1 demonstrates that the emissions that make up the wastewater handling component are mostly in the form of methane production, which typically occurs in anaerobic wastewater treatment processes. The true carbon emissions contribution of the water and wastewater industry as a whole is spread across a range of sectors, including industrial, electrical, waste and transport. The emissions from water and wastewater are, therefore, largely indirect and are difficult to group into a single set of emission data. Figures 2 and 3 present the emissions from various sectors, from the early '90s to present day and future projections. These emission projections are based on the currently instilled policies and measures in place to reduce climate change impacts, and do not include the effect on emissions likely to result from a price on carbon. It is likely that the carbon price will encourage emission reductions across the various sectors. Some sectors will be impacted more than others, depending on how ably they can respond and reduce emissions, find energy efficiencies to reduce exposure to increased energy costs, or receive compensation. To consider the emissions from the water and wastewater industry, it is important to take into account the treatment processes, asset management, the space and materials required, and customer demand and expectations around water and energy. For this reason, the increased costs that eventuate as a result of the carbon price will most likely present themselves in a number of ways to the water industry, mostly indirectly, and through a number of mediums. A significant likely impact on the water industry will be that of increasing power prices arising from the electricity sector's response to the carbon pricing scheme. This will be an indirect impact, and will drive more efficient treatment process operation in water and wastewater treatment and distribution, and the preference for low-energy consumption treatment alternatives. The main energy-intensive processes in the water and wastewater industry are aeration, desalination, sludge handling, and conveyance and distribution systems, and the carbon price impact will likely support the pursuit of improved and innovative solutions in these areas. On the other hand, some of the larger water businesses may be directly impacted and required to pay a price on their emissions based on whether or not the threshold for fugitive emissions is triggered. These thresholds are yet to be announced, and to add to this there is no direct and simple method for fugitive emissions accounting to assist in understanding cost implications. The larger water authorities in the main metropolitan regions of Australia may need to start planning for risk mitigation and adaptation around the additional costs associated with emissions, and consider including a less energy-intensive approach to future planning in urban environments. While there are a number of risks to businesses as a result of a price on carbon, opportunities exist also. Water corporations with land assets or land management roles can utilise the Commonwealth Government's proposed Carbon Farming Initiative (CFI). The Government introduced the CFI Bill in March 2011 and it was passed in parliament in early July 2011. Under the scheme, carbon credits may be traded on the international compliance and voluntary markets, as well as the domestic market, depending on the nature of the activity. Kyoto-compliant credits are likely to attract higher returns than non-Kyoto-compliant credits traded on voluntary markets. The CFI also presents an opportunity to major farmers and producers in that any available land could be utilised Table 1. Waste CO2-e emissions for 2009 adapted from NGGI Report, 2011. Greenhouse Gas Source and Sink Categories CO2 --e emissions (Mt) CO2 CH4 N2O Total Waste 0.03 13.3 0.4 14.1 Solids waste disposal on land NA 11.0 NA 11.0 Wastewater handling NA 2.6 0.4 3.0 Waste incineration 0.03 NA NE 0.03 Other waste NA NA NA NA Figure 3. Sectoral emissions growth, 2010 to 2020 (from DDCCE's Report, Australia's Emissions Projections 2010). Figure 2. Sectoral emissions growth, 1990 to Kyoto period 2008--12 (from DDCCE's Report, Australia's Emissions Projections 2010).
Water Journal November 2011
Water Journal August 2011