Latest Kyoto projections predict NZ surplus

  • Nick Smith
Climate Change Issues

Climate Change Minister Nick Smith today released New Zealand's latest net position report under the Kyoto Protocol which projects greenhouse gas emissions and removals through to 2012.

"The projected position has improved slightly from a surplus of 9.6 million tonnes to 11.4 million tonnes, or at today's carbon price of NZ$20.29, an improved surplus from $194 million to $231 million," Dr Smith said.

"The small improvement in New Zealand's projected surplus over the past year is due to lower agricultural emissions from the ongoing impacts of drought in some regions. There have also been updated figures on forest removals due to improved information from the Land Use and Carbon Accounting System (LUCAS).

"I am still quite cautious of these estimates as they are based on projections of future emissions. The actual position will not be known until after the first commitment period ends in 2012.

"These projections include the estimated effects of the modified emissions trading scheme. New Zealand would face a deficit of 22 million tonnes or $446 million without the ETS.

"New Zealand's Kyoto commitment is to stabilise net emissions between 2008 and 2012 at 1990 levels. The only reason New Zealand is in surplus is because the growth of post-1989 forests is more than offsetting the 23% increase in gross emissions.

"It is important to recognise that although New Zealand's net position is a surplus, this is not the Government's position. Post-1989 foresters are eligible to claim credits for their trees and, as a consequence, the Government will face a substantial deficit. The impacts of these latest projections on the Government's deficit will be assessed as part of the 2010 Budget."

The Net Position Report is available from the Ministry for the Environment at http://www.mfe.govt.nz/issues/climate/greenhouse-gas-emissions/net-position/index.html.

Dr Smith also welcomed the release yesterday of the National Greenhouse Gas Inventory, the official account of New Zealand's emissions up to 2008.

The Greenhouse Gas Inventory is available at http://www.mfe.govt.nz/publications/climate/greenhouse-gas-inventory-2010/index.html.

BACKGROUND

The 2010 net position shows that New Zealand's Financial Position on the Kyoto Protocol has moved from a projected asset of NZ $215 million in May 2009 to being a projected asset of NZ$231million. The net position (in Kyoto of units) has gone up slightly (from 9.6 million units, to 11.4 million units), while the price of carbon has gone down slightly (from NZ$22.36 /tonne in May 2009, to NZ$20.29 /tonne in March 2010).

The net position uses the best available information at the time of projection. The figures are produced by the Ministry for Agriculture and Forestry, the Ministry of Economic Development and the Ministry for the Environment. The Ministry for the Environment compiles the report across government.

The exact net position will not be known until 2015 after New Zealand's national greenhouse gas inventory covering the first commitment period has been internationally reviewed and the review report accepted by the Enforcement Branch of the Compliance Committee of the Kyoto Protocol.

New Zealand's net position under the Kyoto Protocol is published on the Ministry for the Environment's website at http://www.mfe.govt.nz/issues/climate/greenhouse-gas-emissions/net-position/index.html.

 

It is an overview of emission projections across all industry sectors. Specific emissions data for each sector is reported and published by each responsible agency. The net position page provides links to these more detailed reports. Detailed questions on each sector should be answered by the agency responsible for that sector:

  • Energy and industry emissions are available from the Ministry for Economic Development.
  • Emissions from Agriculture and removals from Forestry are reported on by the Ministry of Agriculture and Forestry.
  • Information on waste emissions is available from the Ministry for the Environment.
Detailed changes since 2009
  • 1. The net position is projected to be a surplus of 11.4 million units during the first commitment period of the Kyoto Protocol (2008-2012). This compares with a projected surplus reported in April 2009 of 9.6 million units.
  • 2. Figure 1 (attached) shows where the changes in the net position have occurred since April 2009. Table 1 (attached) shows how the net position is calculated and reconciles the 2010 estimate with the 2009 estimate.
  • 3. Total energy and industrial emissions projections for 2008-2012 have remained largely unchanged, only decreasing by 0.8 million tonnes (0.4 per cent) from the 2009 projection.
  • 4. Agricultural emissions for 2008-2012 have decreased from the 2009 projection by 6.4 million tonnes (3.5 per cent). This is because recovery from a nationwide drought has been slower than originally expected, and some regions experienced further drought.
  • 5. Net removals from forestry are projected to be 5.1 million tonnes lower than projected in 2009. The two key reasons for this change are:
  • a. New information based on LUCAS mapping indicates there is less area of post-1989 forest than previously estimated, with an estimated decrease in removals of 3.2 million tonnes.
  • b. Deforestation emissions are projected to be 1.9 million tonnes higher than projected in the 2009 net position estimate. This is due largely to new information on the area of natural forest deforestation that has been included in these projections for the first time this year.
  • 6. Projected emissions from the waste sector for 2008-2012 have remained largely unchanged from the 2009 projection (fallen 0.1 million tonnes or 1.4 percent). Population projections are the main variable in projecting waste emissions.
  • 7. As at 7 April 2010, 2.1 million Assigned Amount Units have been transferred to private accounts, reducing New Zealand's assigned amount to 307.4 million units. This includes 1 million units awarded under the projects to reduce emissions programme.
  • 8. The projected quantity of Kyoto Protocol emissions units awarded under the projects to reduce emissions programme has been reduced from 6.8 to 6.1 million tonnes because there have been some delays in completing some of the projects. 1 million units have already been given out under the projects to reduce emissions programme and 5.1 million units are projected to be awarded in the future.

The net position is a projected estimate and will remain uncertain until New Zealand's national greenhouse gas inventory covering the first commitment period has been internationally reviewed, final emissions unit purchases and sales are completed and the review report is accepted by the Enforcement Branch of the Compliance Committee of the Kyoto Protocol. 

The internationally agreed timelines for these processes means that New Zealand will submit its annual inventory for the 2008 calendar year in 2010.  As inventory data is submitted for the first commitment period during 2010-2014, uncertainty in the net position will reduce as actual estimated emissions data replaces projected estimates of emissions.  New Zealand's Kyoto Protocol compliance over the first commitment period will not be finalised until 2015.