New Zealands Negotiating Position On Climate Change

Nations will only sign up to a legally binding reduction in greenhouse gas emissions, if a least cost solution can be found, said Hon Simon Upton today. The issue is so vast, and the proposed changes to all economies so far-reaching, that unless the costs of relying less heavily on fossil fuels can be made tolerable, there is a danger that a global sign-up will not get off the ground.

Under current commitments, developed countries are aiming to meet uniform national targets within their own borders irrespective of their different national circumstances. "Such an approach" according to Mr Upton, "is doomed to failure. Some countries face an easy adjustment path. Others face very costly changes. Ironically, some of the dirtiest, least efficient economies have the easiest job. Countries like New Zealand with heavy reliance on renewable energy sources (hydro and geothermal) have a more difficult task.

What we need is a flexible mechanism. International emissions trading would provide the flexibility for emission reductions to occur where and when it is most cost effective for it to occur. All countries would have an equal opportunity to find their way forward at lowest cost. We also advocate setting realistic targets and taking a long term view of the problem. It doesnt make a lot of sense to write off existing plant and equipment before the end of its economic life.

Stabilising the level of greenhouse gases in the atmosphere over the next century means tackling all greenhouse gases on a truly global basis. The trouble with significant unilateral action to reduce emissions, says Mr Upton, is that it could encourage some industries to relocate offshore with little benefit in terms of global emissions, but considerable cost to the country taking the action. The Berlin Mandate specifically excludes any new commitments for developing countries. New Zealand and other developed countries continue to stress that provision needs to be made to bring developing countries on board in the future. Sometime after 2020, the CO2 emissions of the developing world will overtake those of the developed world.

Currently, developed countries are negotiating commitments which have the potential to be legally binding for the period beyond 2000 under the Berlin Mandate process of the Framework Convention on Climate Change. The negotiations are scheduled to conclude in a protocol or other legal instrument at the Third Conference of the Parties to the Convention in Kyoto, Japan in December of this year.

New Zealand has been supported in its calls for flexibility and emissions trading by countries such as the United States and Canada.