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Carbon Neutral Public Service – update on progress

Reference: POL (08) 36

Office of the Minister for the Environment

Cabinet Policy Committee

Proposal

This paper provides a report back to the Cabinet Policy Committee on progress in implementing the Carbon Neutral Public Service programme and background to a public release of emissions data.

Executive summary

Emission inventories have been prepared by all 34 Carbon Neutral Public Service agencies for the 2006/2007 financial year. The inventories show that emissions for the 34 agencies are approximately 159,000 tCO2e.
The 2006/07 emission inventory reports represent a baseline measurement for the Carbon Neutral Public Service programme.
Emissions reduction plans for the 34 agencies were received in draft in December 2007, and are in the process of being finalised. Over 300 projects have been identified, and approximately sixty of these have begun to be implemented. Further reduction opportunities will be identified as agencies complete energy audits and travel plans.
The Cabinet Minute [CAB Min (07) 17/2C], paragraph 8.2 agreed that “all public service departments must report publicly on an annual basis on their emissions for the previous financial year”. The Ministry for the Environment is coordinating the release of the 34 emission inventory reports and has prepared a communications strategy and supporting documentation to assist agencies.
Key findings on progress to date are:
1. It is a huge achievement for the agencies to have collated and reported their emissions data and developed reduction plans in such a challenging timeframe.
2. Measuring carbon emissions is the essential first step in effecting behaviour change and managing emissions. The 2006/07 results provide the baseline from which to measure future emissions.
3. The agencies’ reduction plans highlight over 300 tangible activities that will reduce emissions below business-as-usual levels. Many of these projects have already begun to be implemented.
4. The Carbon Neutral Public Service programme is genuinely at the forefront of international public sector carbon neutrality efforts.
The emission inventory reports are planned for release after 31 March 2008.
The release of reduction plans at the same time as the emission inventories will demonstrate positive action from public service agencies in identifying actions to reduce carbon emissions.

Background

Cabinet agreed on 12 February 2007 that a set of initiatives to elevate sustainability be refined, including an initiative based on moving the public service towards carbon neutrality [CAB Min (07) 4/1A]. Further detail was set out in Towards a Sustainable New Zealand: Carbon Neutral Public Service [CAB Min (07) 17/2C].
The Carbon Neutral Public Service programme will move the 34 core public service departments towards carbon neutrality. It will ensure that the lead group of six Stage 1 agencies have carbon neutral plans in place by early 2008 and are carbon neutral by 2012, with the other 28 agencies being on the path to carbon neutrality by 2012. The six Stage 1 agencies are the Ministry for the Environment, The Treasury, the Inland Revenue Department, the Ministry for Economic Development, the Ministry of Health, and the Department of Conservation.
Achieving carbon neutrality is a three-step process involving:
1. measurement of the greenhouse gas emissions associated with an agency’s activities (these emissions mostly come from burning fossil fuels to generate electricity or as transport fuel);
2. reducing those emissions; and
3. undertaking ‘offset’ projects to remove an equivalent amount of carbon dioxide from the atmosphere or prevent it being released.
In May 2007 [CAB Min (07) 17/2C], Cabinet invited a report back to Cabinet Policy Committee on:
1. The ‘carbon neutral plans’ of the six Stage 1 agencies.
2. The emissions reduction plans of all public service departments.
3. Progress on emissions reductions across the public service.
4. Options for encouraging greater emissions reductions.
5. Recommendations on how offset projects for the Stage 2 agencies are to be funded.
6. A framework for decision-making, based on a cost-effectiveness threshold, to ensure that only cost-effective reduction options are pursued.
The Cabinet Minute [CAB Min (07) 17/2C], requested this report back from the Minister Responsible for Climate Change Issues. Given the prominent role that the Carbon Neutral Public Service programme plays in demonstrating government’s leadership role in addressing environmental sustainability and the close alignment to the Govt3 leading government sustainability programme, the Minister for the Environment has now taken on responsibility for the programme.

Reporting on progress

As the agency responsible for the coordination of the Carbon Neutral Public Service programme, the Ministry for the Environment has developed guidance for the 34 core government agencies on the preparation of emission inventories, as well as reduction planning. The guidance is based on international standards and best practice, and provides worksheets and templates to assist the inventory preparation process. These documents are essential to the effective facilitation of the Carbon Neutral Public Service programme going forward.
Emissions inventories for the 2006/2007 financial year have been completed for all of the 34 Carbon Neutral Public Service agencies. The inventories of the lead six Stage 1 agencies have been independently verified by Det Norske Veritas.
The 2006/07 inventories show that:
1. Approximately 26,000 tCO2e was generated by the six Stage 1 agencies.
2. The 28 Stage 2 agencies reported emissions totalling approximately 133,000 tCO2e.
3. Total emissions for the 34 agencies are approximately 159,000 tCO2e.
These totals are in the range that was anticipated in initially scoping the programme.

A. Carbon neutral plans of the six Stage 1 agencies

The carbon neutral plans of the six Stage 1 agencies consist of:
1. A verified emissions inventory (as above);
2. An emissions reduction plan; and
3. Information about how remaining emissions are to be offset.
Emissions reduction plans for the six Stage 1 agencies were received in draft in December 2007. These are being finalised and signed off.
The Ministry for the Environment is centrally managing offsets for the remaining emissions of the six Stage 1 agencies, as required by paragraph 11 of POL Min (07) 14/19 (confirmed in CAB Min (07) 23/3).
In accordance with paragraph 6 of POL Min (07) 14/19, priority has been given to the use of indigenous forest regeneration projects where there is substantial potential for ecological and environmental co-benefits.
1. The Department of Conservation has identified four parcels of land administered by the Department of Conservation that would be suitable for indigenous forest regeneration projects.
2. The Ministry for the Environment appointed Wildland Consultants Limited to prepare management plans in respect of the four parcels of land. These have been completed and tender documents are being released to appoint a contractor for the implementation of these plans.
3. Current estimates are that the Department of Conservation sites will sequester approximately 57,500 tonnes of CO2e between 2008 and 2012. This gives an average of approximately 11,500 tonnes sequestered each year over the period between 2008 and 2012.
In accordance with Cabinet Minute (07) 23/3, the Ministry for the Environment is investigating further options for offsetting the remaining emissions of the six Stage 1 agencies.
Officials will carry out a tender for purchase of Projects to Reduce Emissions (PRE) units on behalf of the Carbon Neutral Public Service programme. This is likely to take place mid-2008, in association with the proposed tender by the Crown for purchase of PRE units.
Officials intend to explore the purchase of New Zealand Units (NZU’s) from the forestry sector. This is a new opportunity that will arise under the proposed New Zealand Emissions Trading Scheme.

B. Emissions reduction plans for the 34 Stage 2 public service department

Agencies provided the Ministry for the Environment with draft reduction plans in December 2007. These plans were reviewed by the Ministry for the Environment, who provided feedback and comments. These are being finalised and signed off by agencies.
Over 300 projects have been identified through the reduction planning process. Some examples of reduction initiatives identified thus far include:
1. The Ministry for the Environment is constructing a fit-for-purpose video conference facility.
2. The Department of Conservation is installing solar hot water heaters on twenty suitable buildings and water efficient shower heads in its provided accommodation. It is also looking into the use of more efficient vehicles following its fleet review in 2007.
3. The Treasury are progressively replacing its existing stock of desktop computers with more energy efficiency models. Video conferencing is also being investigated.
4. The Inland Revenue Department is introducing collaborative tools (audio, video and application sharing) to enable staff around the country to work collaboratively.
5. The Ministry of Health is auditing its motor vehicle fleet and will reduce the fleet by two vehicles in 2007/08. It will purchase low emission vehicles as existing vehicles come due for replacement.
6. The Ministry of Social Development is in the planning stages of progressively rolling out full recycling across all sites.
7. The Ministry of Fisheries is undertaking fleet sustainability initiatives for vehicle procurement.
8. The Education Review Office is currently undertaking a building refit of its Hamilton Office, which aims to achieve a Green Star 4 rating. The refit is expected to be completed by end of April 2008.
9. The Ministry of Education will be benchmarking energy use of all metered sites using E-Bench (an online tool to assist in tracking and monitoring energy efficiency).
10. The Ministry for Foreign Affairs and Trade is investigating the feasibility of an in-house video conferencing facility.
11. The Ministry of Justice is adding time clocks to kitchen hot water boilers.
12. The proposed Wellington Airport Shuttle is an example of cross agency collaboration to provide shuttle services from Wellington airport to pre-determined stops around central Wellington, in order to reduce single-occupancy taxi journeys.
Many of the actions undertaken as part of the Carbon Neutral Public Service programme will contribute towards the New Zealand Energy Efficiency and Conservation Strategy. A number of agencies have indicated that they have set themselves specific targets to this end through the emissions reduction planning process.
Agencies will review their reduction plans regularly and will report on progress.

C. Progress on emissions reductions across the public service

The reduction plans indicate that approximately sixty projects have begun to be implemented as agencies progress reduction activities in this financial year.
Examples of actions that have already been undertaken include:
1. The Ministry for the Environment has upgraded its building management system to allow real-time reporting on energy use.
2. Department of Conservation has installed energy efficient light bulbs in DoC provided accommodation and area offices.
3. The Treasury staff cafeteria has introduced the use of biodegradable packaging for all its foodstuffs and double-sided printing is now the default setting on all printing equipment
4. Ministry of Pacific Island Affairs has introduced a new travel policy and procedure which has reduced travel in fleet vehicles, rental cars and taxis. A decision was made to sell most of the vehicle fleet this financial year.
Many of the parallel initiatives undertaken through the Govt3 sustainability programme will also result in emission reductions. An example of this was the introduction of a new computer programme by the Ministry of Social Development, which monitors its stock of electronic devices and will save $300,000 annually in electricity.

D. Options for encouraging greater emissions reductions

Having identified over 300 projects to date, agencies are continuing to identify further reduction opportunities through the completion of energy audits in over 55 sites and the development of agency wide travel plans. Once these have been completed, reduction plans will be updated to reflect the recommendations from these audits.
A number of opportunities have already been identified for collaboration across the 34 agencies or where specific initiatives can be shared, with the aim of encouraging further emission reductions; for example:
1. The Ministry for the Environment is currently undertaking research on video-conferencing facilities, and intends to share the findings of this research with other public service departments.
2. The Inland Revenue Department is aiming to work with other geographically dispersed agencies to identify reduction opportunities for sites outside of Wellington.
3. The Ministry of Health has established a waste management contract which contains a syndicated procurement clause that can be considered by other agencies.
4. The Department of Conservation has had its contracts to purchase more fuel-efficient fleet vehicles approved for syndication, allowing other public sector organisations to access the rates and vehicle types.
The Ministry for the Environment is also working on a number of initiatives to assist the wider public service and the private sector through the sharing of experiences and learnings gained from the Carbon Neutral Public Service programme, including:
1. Developing case studies from successful reduction projects.
2. Collaborating with the New Zealand Business Council for Sustainable Development on the development of carbon neutrality guidance for business.
3. Publishing guidance on the voluntary reporting of emissions for corporate organisations. This endorses international standards and provides New Zealand specific emission factors for use in calculations.
In addition to these formal initiatives, officials are in contact with other public service agencies who wish to follow the Carbon Neutral Public Service programme methodologies, as well as local government and private sector organisations seeking advice and guidance as to their own carbon management strategies.

E. Funding for offset projects for the Stage 2 agencies

Officials at the Ministry for the Environment now have some experience in developing an offset portfolio. Their advice is that this process is technical and time-intensive. Officials consider that it would be inefficient for each of the Stage 2 agencies to coordinate their own offsetting programmes. Accordingly, it is recommended that offsets for the Stage 2 agencies should be centrally managed by Ministry for the Environment, in the same way as the Stage 1 offsets are managed. When coordinating offsets for the Stage 2 agencies, the Ministry for the Environment will build on its expertise from working on the Department of Conservation sites offsetting programme and the PRE purchasing programme.
Funding for the Carbon Neutral Public Service programme has been approved from Vote Climate Change and Energy Efficiency for the next three years.
Ongoing funding will be required for the lead 6 agencies to offset emissions generated by these agencies post 2012. Additional funding will also be required for offsetting the Stage 2 agencies. Accordingly, it is proposed that a budget bid will be submitted at the end of the current appropriation phase in 2010, to cover these two areas of additional funding.

F. Cost-effectiveness considerations

As part of the reduction planning process, Cabinet has required [CAB Min (07) 17/2C], that agencies must consider the cost effectiveness of reduction activities. Agencies need to consider the actual cost and payback period for any reduction actions as well as being able to deliver on their operational outcomes.
The Ministry for the Environment has prepared guidance for the Carbon Neutral Public Service programme to further ensure that agencies are aware of this requirement and provide assistance for agencies to be able to fulfil it. The document reiterates standard cost benefit analysis processes to ensure that decisions are based on robust costings, taking into account both the cost and benefits of a particular action, especially where significant investment may be required.
This document has been reviewed by The Treasury and the Ministry for Economic Development to ensure its alignment with procurement guidelines, and with the Sustainable Procurement Programme led the Ministry for Economic Development by as one of the government initiatives to encourage change to more sustainable practice.

Public release of emission inventories and reduction plans

Cabinet Minute (07) 17/2C paragraph 8.2 agreed that “all public service departments must report publicly on an annual basis on their emissions for the previous financial year”.
The release of emission inventories was timed to coincide with the finalisation of reduction plans. This provides an opportunity for agencies to send a positive message by focusing on their efforts to reduce emissions.
The release of the emission inventories and reduction plans will occur after 31 March 2008.
There is significant interest in the release of these documents, especially from the media.
A communications strategy has been prepared by the Ministry for the Environment to support the release, along with supporting information to assist the agencies in providing a context for the information. This information has been provided to each of the 34 agencies.
Some key messages from the communications strategy on the release are that:
1. The New Zealand government is one of the first in the world to develop a robust programme to guide the public service towards carbon neutrality.
2. The Carbon Neutral Public Service programme aims to demonstrate government leadership on sustainability by reducing government’s environmental impact.
3. It is a huge achievement for the agencies to have collated and reported their emissions data and developed reduction plans in such a challenging timeframe.
4. Measuring carbon emissions is the essential first step in effecting behaviour change and managing emissions. The 2006/07 results provide the baseline from which to measure future emissions.
5. The agencies’ reduction plans highlight over 300 tangible activities that will reduce emissions below business-as-usual levels.
6. Many small steps will together make a big improvement in sustainability.
7. Demands on some agencies will increase in the coming years and are therefore likely to produce a greater pressure to increase emissions. There is no intention to curtail productivity, but to see public servants working more efficiently.
8. An essential outcome of the programme is that the carbon emissions of the core public service are fully accounted for over time.
9. An economically sensible carbon neutrality programme seeks the least-cost option to reduce emissions. This means implementing cost-effective reduction measures in-house before offsetting the residual emissions.
10. The credibility, transparency and reporting methodologies of the Carbon Neutral Public Service programme align with international public and private sector carbon neutrality efforts.
11. Central government leadership through the Carbon Neutral Public Service programme is resulting in increased interest from local government and businesses about their own carbon management strategies.
The Carbon Neutral Public Service programme is genuinely at the forefront of international public sector carbon neutrality efforts. It is at present the only comprehensive central government programme with robust systems and methodologies to work through the challenges posed by a public service carbon neutrality programme, and in doing so, provide guidance to public and private sector participants in similar programmes.

Process around the release

The Ministry for the Environment is centrally coordinating the release of the emissions inventory reports across the 34 agencies.
The six Stage 1 agencies will be releasing their emission inventory reports and reduction plans together. Discussions with the 28 Stage 2 agencies have indicated that the majority will also be releasing their reduction plans along with their inventory reports.
The release is being treated as a Departmental release. Individual agencies are responsible for communicating their inventories and reduction plans to their respective Ministers.
A Ministerial press release is planned regarding the wider Carbon Neutral Public Service programme when agencies have published their reports. This will be released after 31 March 2008. The key messages of this release will include:
1. The New Zealand government is leading the world with its robust programme to guide the public service towards carbon neutrality.
2. It is an achievement to have completed 34 emission inventories which will provide a baseline from which to build a pathway to long-term sustainability for government agencies.
3. Agencies have also developed reduction plans, and identified over 300 specific reduction activities.s’ awareness of the availability of grants or loans as partners become ready to deliver the scheme.

Report back to Cabinet

The Ministry for the Environment will report back to the Minister for the Environment and the Minister Responsible for Climate Change Issues on the progress of the Carbon Neutral Public Service programme by April 2009; after which time the 28 Stage 2 agencies will have had their emission inventories verified for the first time, and all agencies will have had over 12 months to implement their reduction plans.
An October 2007 Cabinet paper (CAB Min (07) 38/7) requires officials to report to the Ministers of Economic Development, Finance, Commerce, Environment, Conservation and Agriculture and Forestry by 30 April 2008 on a framework for identifying the government’s role in supporting the effective development of voluntary carbon markets. This will provide advice, inter alia, on international developments on the treatment of offset credits in carbon neutrality schemes.

Consultation

The Treasury, Department of Conservation, Inland Revenue Department, Ministry of Health, the Ministry of Economic Development and Ministry of Agriculture and Forestry were consulted on this paper.
The Department of the Prime Minister and Cabinet has been advised of the paper.

Financial implications

There are no immediate financial implications of this Cabinet paper.

Human rights

There are no inconsistencies with the Human Rights Act 1993.

Legislative implications

There are no legislative implications at this stage.

Publicity

Officials are currently developing a 2008 publicity strategy for the Carbon Neutral Public Service programme.
A communications strategy has been prepared by the Ministry for the Environment to support the release, along with supporting information to assist the agencies in providing a context for the information.

Recommendations

The Minister for the Environment recommends that the Committee:
1. note that progress has been made on the Carbon Neutral Public Service programme as detailed in this Cabinet paper.
2. note that Ministry for the Environment will report back to the Minister for the Environment and the Minister Responsible for Climate Change Issues by April 2009 on the progress of the Carbon Neutral Public Service programme.
3. note that a press statement will be made by the Minister for the Environment after 31 March 2008 on the release of the emissions inventories under the Carbon Neutral Public Service programme.
4. note that departments will have released their emission inventories on the same day as the press statement.
5. note that a budget bid will be made in 2010 to cover offsets for the Stage 2 agencies and offsets for the lead 6 agencies post 2012.
6. note that the Stage 2 agencies will have to cover the operational costs of this programme’s implementation including reduction activities and verification costs, out of their baselines. No further action will therefore be required by Cabinet at this stage.

Hon Trevor Mallard
Minister for the Environment

Cabinet Decision - POL Min (08) 4/8

Carbon Neutral Public Service: Update on Progress

On 19 March 2008, the Cabinet Policy Committee (POL):

noted that progress has been made on the Carbon Neutral Public Service programme as detailed in the paper under POL (08) 36;
noted that the Minister for the Environment will make a press statement after 31 March 2008 on the release of the emission inventories under the Carbon Neutral Public Service programme;
noted that departments will release their emission inventories on the same day that the press statement is released;
noted that a budget bid will be made in 2010 to cover offsets for “Stage 2” agencies and offset projects for the lead group of six “Stage 1” agencies post 2012;
noted that the “Stage 2” agencies will have to cover the operational costs of the Carbon Neutral Public Service programme’s implementation, including reduction activities and verification costs, out of their baselines, and that no further action will be required by Cabinet at this stage;
noted that Ministry for the Environment will report to the Minister for the Environment and Minister Responsible for Climate Change Issues by April 2009 on the progress of the Carbon Neutral Public Service programme;
directed the State Services Commission, in consultation with the Ministry for the Environment, to report to POL in due course on options to increase the sharing of video conferencing facilities between departments and the use of video conferencing within all government departments instead of travel.