Climate target crucial decision for NZ

A 15 per cent target would be the equivalent of eliminating within 10 years all emissions from transport and electricity generation. Photo / Martin Sykes

Over the next few days the Government will make one of the biggest calls of its term in office, announcing a greenhouse gas emissions target for 2020.

It has to have a target to take to Copenhagen in December when the world gathers to negotiate a new climate treaty to follow the Kyoto Protocol.

The sort of number the Government has been directing our attention towards, in a non-committal way, is a 15 per cent cut from 1990 levels. That would also be 15 per cent below the current commitment under the Kyoto Protocol.

But as New Zealand's gross emissions are 24 per cent above 1990 levels, such a target would be a cut of nearly a third from where we are now.

It would be the equivalent of eliminating, within 10 years, all emissions from transport and electricity generation, and then some. Transport accounts for 20 per cent of national emissions, the electricity sector 9 per cent.

Alternatively it would be equivalent to reducing by two-thirds emissions from pastoral farming. Agricultural emissions in the form of methane and nitrous oxide from the bodily functions of cattle and sheep are 48 per cent of the national total.

"The nightmare for the Government is that even what looks like a very modest target is incredibly challenging, because we are starting 24 per cent behind the eight ball," says Climate Change Minister Nick Smith.

At the Bali climate change conference in late 2007 developed countries agreed to the notion of "comparability of effort" but there is no agreement about how to define that.

Nor will there be in Copenhagen, says Trade and Climate Change Negotiations Minister Tim Groser, but he expects "some sense of what is reasonable" to emerge from the hurly-burly of the negotiations.

The case New Zealand will be making for a target at the lenient end of the range for developed countries goes like this: While our emissions have grown comparatively rapidly since 1990 that is partly because the population has too. In that respect we are more like Australia and the United States than Europe or Japan.

Per capita emissions are also near the high end of the international range. But that reflects the fact that nearly half of them come from farming and most of the food New Zealand produces is exported.

On a trade-adjusted basis, where you deduct the emissions embedded in exports and add back imported emissions, they are more respectable.

Then there is the ability to pay. New Zealand sits in the bottom third of the OECD in terms of per capita gross domestic product, somewhere between Spain and Greece and well below the income levels of the Americans, northern Europeans or Japanese.

Finally there is the comparative cost of reducing emissions. Here opinions vary widely, especially on how much, or how little, the methane and nitrous oxide emissions arising from the bodily functions of livestock can be reduced and what it might cost.

If the Government has a cost analysis for agriculture, plotting how much emissions could be reduced at progressively higher costs, it has resolutely refused to make it available.

What is not in dispute is that the global research effort devoted to the issue is tiny compared with that devoted to developing low-carbon technologies for propelling vehicles or generating electricity and so far no one is claiming to have found a silver bullet.

Nor is there any dispute that it is harder to reduce emissions from








electricity generation in a country where only a third of it is generated from fossil fuel power stations to start with, and most of that is from highly efficient, gas combined cycle plants.

The response these "give us a break" arguments are liable to encounter is that New Zealand got a comparatively soft target at Kyoto 12 years ago - only Australia's was weaker - and has done very little since then to reduce the growth in emissions.

There are three ways New Zealand can meet its target: physically reducing emissions within the country, expanding the forest area or buying carbon credits on the international market - which represent emissions reductions which have occurred somewhere else in the world.

All three methods cost money. How much is educated guesswork: all the economic modelling tells us is that the more ambitious the target and the higher the international carbon price, the greater the cost will be.

We are still expected, on current projections, to meet our Kyoto target, which is 100 per cent of 1990 levels on average between 2008 and 2012.

But only because of the offsetting impact of carbon taken out of the atmosphere by "Kyoto forests", those planted since 1990 on land not already forested.

Satellite and aerial mapping has confirmed an increase of 566,000ha in the area of plantation forest, which the Government expects will just about cover the increase in gross emissions over the same period.

But most of those trees were already in the ground when the Kyoto Protocol was negotiated in 1997.

Net afforestation has collapsed since then, and the trees planted in the 1990s will be ready for harvest in the 2020s, turning the forestry sector from a net sink for carbon into a net source.

Unless, that is, the rules for counting forest emissions are changed. At the moment the carbon sequestered in trees is deemed to be all released to the atmosphere when the tree is felled, which is nonsense if it is used for building timber.

New Zealand is seeking a number of changes to the rules relating to LULUCF (land use, land use change and forestry). Groser said that within the range of environmentally credible or defensible rules the difference between the best and worst case outcomes on the rules from a New Zealand perspective could swing the country's emissions by as much as 70 per cent. The rules will not be finally decided at Copenhagen.

"That's a major complicating factor for us," Groser said.

Smith said it was probable the Government would announce a target range, with conditionality both around what other developed and major developing countries committed to and around the LULUCF rules.

"In the international forums what you are doing and your credibility are as important as your target," he said.

New Zealand negotiators' position at Copenhagen would be substantially strengthened if policy on the emissions trading scheme, which is on the statute books but in the throes of being amended, was settled.

Smith is having talks with Labour over a politically durable ETS regime.

The Government is also highlighting New Zealand's leading role in international research into mitigating agricultural emissions.

"It is inevitable that agriculture is going to be part of domestic policy under the ETS," Smith said.

The chief executive of the Business Council for Sustainable Development, Peter Neilson, said agriculture was not included in the European ETS.

"But they have an agreement among the EU member states that sectors outside the ETS will have to cut their collective emissions by 10 per cent.

"If agriculture doesn't, other sectors will have to cut by more than 10 per cent."

And while the cap and trade legislation recently passed by the US House of Representatives does not include agriculture within its cap, it does allow farmers to earn credits for emission reductions, effectively putting a carbon price into US agriculture, he said.

That legislation envisages a cut of 17 per cent in US emissions from 2005 levels, which would bring them back to around 1990 levels, en route to a target reduction of 80 per cent in the middle of the century.

The European Union has adopted an average unconditional target of 20 per cent below 1990 by 2020, or 30 per cent if the level of ambition from the rest of the world is high enough.

Japan has announced a 2020 target of 15 per cent below 2005 levels, equivalent to 8 per cent below 1990, but the main opposition party has called for a cut of 25 per cent below 1990 levels.

An election is expected this month.

The Australian Government has a three-tier target: 4 per cent unilaterally, 14 per cent conditional on efforts by the major economies and 24 per cent conditional on an adequate global agreement.

Labour's climate change spokesman Charles Chauvel says it is better to be bold than timid.

"We will be a target-taker, let's face it, when we get to the negotiations. The benefit about being bold in setting a target now is that it will obviously be provisional given that we are going into negotiations and we will effectively be given a target by bigger players.

"We might as well show we are doing this in good faith," he said. "If we are going to have a serious target for 2050 we can't keep loading this problem on to succeeding generations. We are going to have to bite the bullet."