New Zealand has an unconditional commitment to decrease emissions by 5% below 1990 levels by 2020 under the Convention. New Zealand is a Party to the Kyoto Protocol, but did not sign up for the second commitment period 2013–2020 and has also not put forward a QELRO for that period. It has however stated that it intends to apply Kyoto accounting rules to the second commitment period, which could weaken their target by 40%. This target is therefore rated Inadequate. With current policies and measures implemented, New Zealand will not achieve this target. Instead, the current policy projections show an increase in emissions above 1990 levels of around 32% by 2020.
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 land-use, land-use change and forestry (LULUCF) credits of 16.5 MtCO2e, the effective emissions resulting from this target are higher than the 1990 emissions level.
While New Zealand remains a Party to the Kyoto Protocol, it announced in 2012 that it would not participate in the second commitment period. As a result, it has not presented a legally-binding QELRO1 in the amended Annex B to the Kyoto Protocol for the period 2013–2020. Instead, it has announced an unconditional target of 5% below 1990 levels by 2020 under the Convention.
New Zealand has expressed its 5% reduction target as being equivalent to a QELRO1 of 96.8%, which means average yearly emissions during the period 2013–2020 are proposed to be a reduction of 3.2% of 1990 levels (Government of New Zealand, 2013). Although New Zealand has not signed up for the second commitment period, it has stated that it plans to apply Kyoto Protocol accounting rules governing the second commitment period (e.g. LULUCF accounting provisions provide credits or debits, which are added to, or subtracted from, the allowed Annex A emissions during the commitment period). The CAT estimates that LULUCF credits for the second commitment period could be on average up to 25 MtCO2e a year, according to different projections (see assumptions). This means that New Zealand’s 5% reduction target could be weakened by 40%; in other words, the country would be able to increase its emissions to up to 35% above 1990 levels by 2020 (instead of reducing them by 5%), if it uses all LULUCF credits.
The 5% target complements New Zealand’s conditional pledge of reducing emissions by 10–20% 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). For 2050, New Zealand’s proposed target is a 50% reduction relative to 1990 emissions.
New Zealand supports proposals to remove emissions from natural disturbances and to count removals from harvested wood products, which have not been accounted for here. This could lead to higher credits (or lower debits).
We rate New Zealand’s pledge for 2020 “Inadequate”. The 5% target would be rated “Medium” if no LULUCF credits were used (dashed dot in the figure). However, given that the country will apply Kyoto accounting rules to the second commitment period, their actual emissions allowances (black dot on the figure) fall within the “Inadequate” category. This means the emission level resulting from the pledge exceeds the emission level for New Zealand in all effort-sharing proposals evaluated by the CAT. For New Zealand, proposals based on capability lead to higher emissions allowances whereas approaches that focus on equal cumulative/equal per capita emission would require more stringent reductions.
With current policies, total national emissions (excl. LULUCF) are projected to rise to 80 MtCO2e by 2020 and 86 MtCO2e by 2030. This represents an increase in emissions from 1990 of 36% in 2020 and 42% in 2030. Net removals from forestry are expected to become a source around 2025, as relatively large areas of production forests planted in the 1990s are harvested. Those levels of emissions are in line with New Zealand’s target including LULUCF credits.
New Zealand’s main instrument to reduce greenhouse gas emissions is an Emissions Trading Scheme (Ministry for the Environment, 2014; Government of New Zealand, 2011b). 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, has been exempted from the ETS until at least 2015.
The Government issues a certain number of free New Zealand Units (NZU) for industries exposed to international trade, fisheries and forestry. It is also possible for participants to swap out NZU’s for the much cheaper Kyoto Protocol emission units from abroad, and many participants have made use of this mechanisms, except for the forestry industry, where this loophole was removed in May 2014. For actors overshooting the issued permits there is a fixed price of 25 $NZ /tCO2e.
During a transition phase, which is not fixed in length, the system obliges all emitters outside the forestry sector to surrender one emission unit for every two tonnes of emissions produced.
The numbers used to calculate the current-policy-based trends are taken from the currently available policy scenario from New Zealand’s Sixth National Communication (Ministry of Environment, 2014).
A challenge for New Zealand to meet its reduction targets is the growth in GDP, up 67% from 1990 to 2012. During this period, emissions in the energy sector have increased by 25%, mainly due to transport growth and fossil fuel electricity generation, while emissions from the agricultural sector grew by 15% (CRF, 2014).
Targets for 2020 and 2050 were calculated from the most recent national inventory submissions (CRF, 2014).
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 (Government of New Zealand, 2009a). If calculations are performed using New Zealand’s own projections for Afforestation/Reforestation and Forest Management activities (Government of New Zealand 2009b) the country would gain 4 MtCO2e LULUCF debits per year. However, the government projections date from 2009 and are not consistent with subsequently reported historical emissions for 2008–2012. We therefore also perform calculations based on our own projections (using historical averages) which result in 25 MtCO2e credits a year. Because our estimates are more consistent with historical data, we consider that our estimates—and hence the 24 MtCO2e credits a year—may be more likely estimates. We note that our projection methods do not take into consideration the effects of forest maturation on LULUCF emissions, and therefore currently consider our estimate to be an upper bound. New Zealand has included a level of natural disturbance in their forest management reference level.
The current trend projections are based on growth rates from New Zealand’s Sixth National Communication (Ministry for the Environment, 2014) applied to the latest GHG inventory data (CRF, 2014).
CRF (2014). 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 (2009b). A Submission to the Ad-Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP) Land Use, Land Use Change and Forestry (LULUCF).
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 (2014). New Zealand’s Sixth National Communication under the United Nations Framework Convention on Climate Change and the Kyoto Protocol, Wellington: Ministry for the Environment.