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Emissions Trading Has Multi-Million Dollar Potential For NZ During First Kyoto Period Chris Mole - Associate Editor
The Govt is sitting on a Kyoto goldmine worth conservatively at least $300m between 2008 and 2012, thanks to NZ’s large area of forests planted since 1990, which gain credits as carbon sinks.
The Climate Change Office has just released a report looking at greenhouse emissions, which predicts NZ will be up to 15% below its emissions target at the end of the first five-year commitment period under the Kyoto Protocol, in 2012. This will be achieved despite a steady increase in emissions from agriculture, electricity generation and transport – because the forests will more than soak up the surplus.
It will put NZ in a strong position to sell credits to the many Kyoto signatory countries struggling to reach their emissions targets. Based on a middle-of-the-road projection NZ will have a net surplus of 33m tonnes (Mt) of CO2 equivalents during the 5-year period, and assuming a world price of $US10/tonne for carbon credits – again conservative – NZ stands to gain around $330m from selling credits between 2008 and 2012.
Climate Change Office Science and Inventory Manager Helen Plume says while the overall picture looks positive for NZ, it should not obscure the fact NZ’s greenhouse gas emissions are steadily rising, and likely to keep doing so even after Kyoto comes into effect in 2008. The report shows emissions have increased 21.6% since 1990 – from 61.6Mt of CO2 equivalent to almost 75Mt. Methane emissions from dairy cows have jumped 65%, nitrous oxide from agricultural soils is up 28%, transport emissions have risen 61% and emissions from electricity generation are 58% higher. Emissions from waste have decreased by 18%.
Under the first 5 years of Kyoto, NZ is allowed to emit 5 times its 1990 level of emissions – a total of 308Mt. Current projections, based on “business as usual”, are for emissions to exceed 399Mt. But forests planted since 1990 will absorb an estimated 95Mt during the 5-year period. In addition, policies such as the proposed carbon tax, and a shift towards renewable energy, are projected to cut emissions by about 29Mt.
This leaves a net surplus of 33Mt. The most optimistic scenario is for a surplus of 50Mt and the most pessimistic, 17Mt. The report notes NZ is unusual among developed nations producing almost 50% of greenhouse emissions from agriculture. The energy sector is the other big contributor, with just under 43% of emissions. Emissions from industry (4.7%) and waste (3.2%) make up the rest.
On a per capita basis, NZ’s greenhouse emissions are slightly above average for developed nations, at 18 tonnes of CO2 equivalent annually. A report by the International Institute for Applied Systems Analysts shows NZ’s emissions per person are higher than the UK (11.2 tonnes), France (8.5) and the EU as a whole (10.4). But NZ is well behind Aust, which has highest greenhouse emissions per capita of all industrialised countries, at 27.2 tonnes of CO2 equivalent, ahead of Canada (22 tonnes), the US (21.4) and Ireland (18.1).
NZ Greenhouse Emissions in 1990 and 2002
| Sector |
Million tonnes (Mt) CO2 equivalent
1990 2002 |
Change from 1990 (%) |
Energy Generation
Industry
Solvents
Agriculture
Land-use change and forestry
Waste |
23.7
2.9
41.5
31.9
- 21.7
2.9 |
32.0
3.5
48.4
36.9
- 24.1
2.4 |
35.0
20.5
16.4
15.5
11.1
- 17.7 |
| TOTAL |
61.6 |
74.9 |
21.6 |
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