New Zealand made an unconditional commitment to decrease emissions by 5% relative to 1990 emission levels by 2020. This announcement was made under the Convention and New Zealand has not put forward a QELRO under the Kyoto Protocol. With current policies and measures implemented, this target will not be achieved. Current trends project an increase in emissions above 1990 levels of about 27-30% by 2020, remaining far above its target.
In August 2013, New Zealand announced an unconditional target of 5% below 1990 levels by 2020. This is complementing the conditional pledge of reducing emissions by 10 to 20% below 1990 levels by 2020, which was made under the Copenhagen Accord and which depends on a set of conditions, including a global temperature pathway of 2°C, that developed countries make comparable efforts and that developing countries take actions based on capabilities, effective LULUCF rules, and access to international carbon markets (Government of New Zealand, 2013).
New Zealand's Kyoto Protocol target for the first commitment period is a return to 1990 base year emissions (QELRO of 100%). Given large expected LULUCF credits of 16.5 MtCO2e, the effective emissions resulting from this target are higher than 1990 emissions level.
New Zealand did not present a quantified economy-wide emission reduction commitment in the amended Annex B to the Kyoto Protocol for the period 2013-2020, but it remains a Party to the Kyoto Protocol. It has stated that it plans to apply accounting rules governing the second commitment period and has expressed its 5% reduction target as being equivalent to a QELRO of 96.8, which means average yearly emissions during the period 2013-2020 are proposed to be 96.8% of 1990 levels (Government of New Zealand, 2013).
New Zealand supports proposals to remove emissions from natural disturbances and to count removals from harvested wood products, which has not been accounted for here. This could lead to higher credits (or lower debits). For 2050, the proposed target is a 50% reduction relative to 1990 emissions.
With current policies total national emissions (excl. LULUCF) are projected to rise to 76-79 MtCO2e by 2020 and 76-80 MtCO2e by 2030. This represents an increase in emissions from 1990 of 27-30% in 2020 and 27-34% in 2030. If expected emissions from the forestry sector are taken into account, total national emissions will increase by another 1.3 MtCO2e by 2020. Net removals from forestry are expected to become a source in 2020 as relatively large areas of production forests planted in the 1990s are harvested.
According to new projections included in the Annual Report of the Ministry of Environment from October 2013, total emissions including forestry could even be significantly higher. However, these projections are not yet reviewed and data is not sufficiently detailed to allow for an individual assessment of emissions excluding LULUCF and emissions from LULUCF activities. We have therefore not used this in our current analysis.
New Zealand’s main instrument to reduce greenhouse gas emissions is an Emissions Trading Scheme (Ministry for the Environment, 2009; Government of New Zealand, 2011b), see Table 21. The ETS entered into force in 2008 and operates differently to, for example, the European ETS. The system does not have a cap, and therefore does not regulate total emissions within a period.
Forestry was the first sector to enter the scheme (in 2008), followed by liquid fossil fuels, stationary energy and industrial processes in 2010, and waste and synthetic greenhouse gas sectors in 2013. The agriculture sector, responsible for around 50% of New Zealand’s emissions, was due to enter the scheme in 2015, but at the moment this timeline is uncertain.
The Government issues a certain number of New Zealand Units (NZU) for free for industries exposed to international trade, fisheries and forestry. It is also possible for participants to acquire Kyoto Protocol emission units from abroad. For actors overshooting the issued permits there is a fixed price of $NZ25/tCO2e.
During a transition phase that is not fixed in length the system obliges all emitters except from the forestry sector to surrender one emission unit for every two tonnes of emissions produced.
An expert review report has questioned New Zealand’s use of policy instruments to achieve its mitigation targets (UNFCCC, 2011). Despite considerable potential in several sectors, the review found that there is a lack of instruments to exploit it. The New Zealand Government has chosen the ETS as the main climate policy instrument, arguing that it ensures that reductions are cost-effective. The National Communication estimates a reduction of 12 MtCO2e by 2020, but refrains from providing detailed information about where and how these reductions will take place. The expert review team expressed “great concern” about whether New Zealand will be able to meet its targets by 2020 without a broader policy portfolio.
The Sustainability Council of New Zealand also comes to this conclusion that effects of existing policies are overrated, especially with respect to expected emissions reductions from coal fired power plants and from forestry. They come to the conclusion that 88% of the expected savings of 12 MtCO2e are highly uncertain (Sustainability Council of New Zealand, 2011).
The numbers used to calculate the current-policy-based trends are taken from the currently available policy scenario from the Ministry of the Environment. It has to be noted, however, that these projections could overestimate the mitigation effect of current policies.
A challenge for New Zealand on its way to meet the reduction targets is the growth in GDP, up 67% from 1990 to 2008. During this period there has been an increase of emissions in the energy sector by 46.8%, mainly due to transport growth and fossil fuel electricity generation (UNFCCC, 2011).
Targets for 2020 were calculated from the most recent national inventory submissions (CRF, 2013).
We calculated New Zealand's LULUCF accounting quantities in 2020 for afforestation, reforestation and deforestation using the current Kyoto rules and for forest management using a net-net approach with a projected reference level for 2013-2020. New Zealand has included a level of natural disturbance in their reference level.
The current trend projections are based on growth rates from New Zealand’s Fifth National Communication (Ministry for the Environment, 2009) which were also presented in the Emissions Trading Scheme Review 2011 (Emissions Trading Scheme Review Panel, 2011) applied to the latest GHG inventory data (CRF, 2013).
CRF (2013). UNFCCC AWG-KP Submissions 2013. Common Reporting Format.
Grosser, T (2013) New Zealand commits to 2020 climate change target, Media Release
Government of New Zealand (2013). Submission to the UNFCCC on Quantified Economy-wide emission targets for 2020
Government of New Zealand (2011b). NZ ETS Review.
Government of New Zealand (2010). New Zealand's pledge to the Copenhagen Accord Compiled in: Compilation of economy-wide emission reduction targets to be implemented by Parties included in Annex I to the Convention, UNFCCC (2011).
Ministry for the Environment (2011). Doing New Zealand’s Fair Share. Emissions Trading Scheme Review 2011: Final Report. Wellington: Ministry for the Environment.
Ministry for the Environment (2009). New Zealand’s Fifth National Communication under the United Nations Framework Convention on Climate Change, Wellington: Ministry for the Environment.
Smith, Nick; Groser,Tim (2009). 2020 target balances economy & environment, Press Release 10 August 2009
Sustainability Council of New Zealand (2011). NZ’s Climate Response Officially Inadequate. UNFCCC (2011) Report of the In-depth Review of the Fifth National Communication of New Zealand, FCCC/IDR.5/NZL, February 2011