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New Zealand's Fourth National Communication under the United Nations Framework Convention on Climate Change

Foreword

Executive summary

1 Background

2. National circumstances

3. Greenhouse gas inventory

4. Policies and measures

5. Projections and the total effect of policies and measures

6. Vulnerability assessment, climate change impacts, and adaptation measures

7. Financial resources and transfer of technology

8. Research and systematic observations

9. Education, training and public participation

Annex A: Summary of emissions and removals from New Zealand's 2003 national inventory

Annex B: Supplementary information on Projections Modelling methodology

Annex C: Reporting under Kyoto Protocol Article 7.2

Annex D: Summary of Policies and Measures

Acknowledgements

Abbreviations and acronyms

References

New Zealand's Report on the Global Climate Observing System (GCOS)

New Zealand's Report on Demonstrable Progress under the Kyoto Protocol

1. Domestic measures

2. Trends in, and projections of, greenhouse gas emissions

3. How measures contribute to meeting commitments

4. Actions and programmes under Articles 10 and 11 (technology and other cooperation; financial resources)

2. Trends in, and projections of, greenhouse gas emissions

The trends and projections described in this chapter are based on the information in Chapter 5, "Projections and the total effect of policies and measures," of the Fourth National Communication, and in part on the report Projected Balance of Units During the First Commitment Period of the Kyoto Protocol published by the Ministry for the Environment in May 2005. Emissions and removals are projected for the energy, transport, industrial processes, agriculture, waste, and forestry (i.e., land use, land-use change and forestry, or LULUCF) sectors.

The projections of greenhouse emissions sources and removals included in this report as well as the Fourth National Communication conform to the definition of the "with measures" projection. It is important to note that the projections reported in this document reflect the Government's decision not to proceed with the previously announced carbon tax in December 2005, but do not reflect any impact from the new work programmes being considered by the Government at the time of publication.The projections therefore reflect the climate change policy settings in place at the end of 2005. The projected balance of units report will be officially updated in mid-2006 and will take into account the effect of policy developments following the 2005 climate change policy review.

National trends in New Zealand's emissions and removals

The summary by gas and trend tables from the 2003 Common Reporting Format are provided in Annex 1 of the Fourth National Communication. More detailed information on national trends in emissions and removals can be found in Chapter 3 "Greenhouse gas inventory" of the Fourth National Communication.

In 1990, New Zealand's total greenhouse gas emissions (excluding net removals from the LULUCF sector) were equivalent to 61,525 gigagrams of carbon dioxide (Gg CO₂). In 2003, total greenhouse gas emissions (excluding net removals from the LULUCF sector) were 75,345 Gg CO₂ equivalent, equating to a 22.5 percent rise since 1990 (RDP Figure 1). Net removals from the LULUCF sector (including emissions of methane and nitrous oxide) increased from 21,366 Gg CO₂ in 1990 to 22,862 Gg CO₂ in 2003. The LULUCF figures include both pre- and post-1990 forests.

Fluctuations in the trend are largely driven by emissions from electricity generation. This category can show large year-to-year fluctuations because of the use of thermal stations to supplement the hydroelectric generation, which cannot meet the demand for electricity during dry years. Hydroelectricity generation in New Zealand is predominately flow of river with limited hydro storage. Generation in a year with normal rainfall requires lower gas and coal use and a year with less rainfall requires higher gas and coal use. This is a different trend from the steady increase in emissions from coal and gas used in electricity generation found in many other countries.

There have also been changes in the relative amounts of the different greenhouse gases emitted. Whereas methane (CH₄) and carbon dioxide (CO₂) contributed equally to New Zealand's emissions in 1990, carbon dioxide is now the major greenhouse gas in New Zealand's emissions profile (RDP Table 1). This is attributed to increased growth in the energy sector compared to the agriculture sector. However, the agriculture sector continues to dominate New Zealand's emissions profile in that 49.4 percent of total emissions in 2003 were produced by the agriculture sector (RDP Figure 2).

RDP Table 1: Emissions of greenhouse gases in 1990 and 2003

Source: Ministry for the Environment, 2005b

Percentage changes in greenhouse gas emissions by sector are illustrated in RDP Figure 3 relative to the 1990 baseline.

Projected emissions and removals in the period 2008 to 2012

Projected total emissions over the first commitment period of the Kyoto Protocol are a combination of emissions from the energy, industrial processes, agriculture and waste sectors. Emissions are projected for the mid-point of the first commitment period (2010). This value is multiplied by five to obtain total emissions over the first commitment period. Three scenarios - a pessimistic, most-likely, and an optimistic scenario - are used to assess uncertainty in the projection.

For domestic purposes, New Zealand updated its projected emissions and removals of greenhouse gases for the first commitment period (2008-2012) of the Kyoto Protocol in May 2005 (Projected Balance of Units During the First Commitment Period of the Kyoto Protocol). The emissions calculation was consistent with the methodology used for the national inventory of greenhouse gas emissions and removals submitted to the United Nations Framework Convention on Climate Change Secretariat in April 2005. The update also contained a report of projected removal units from Article 3.3 forests. The May 2005 projected balance of units report remains the official reference for projections until updated in mid-2006.

However, for the purpose of submitting the best available information for the Fourth National Communication and the Report on Demonstrable Progress under the Kyoto Protocol as of December 2005, officials prepared a provisionalupdate of the May 2005 projections to reflect the policy status following the 2005 review, namely the removal of the carbon tax and associated Negotiated Greenhouse Agreements. The projections do not reflect any new policies under consideration by the Government following the 2005 policy review. The provisional projections reported in this document will be updated in mid-2006.

Under the policy settings in effect as of the end of December 2005, New Zealand's total emissions of greenhouse gases (excluding net removals from the LULUCF sector) were projected to increase to 82,431 Gg CO₂ equivalent in 2010, compared to the 1990 level of 61,521 Gg CO₂ equivalent and the 2003 level of 75,341 Gg CO₂ equivalent. Over the five years of the first commitment period, total emissions were therefore projected to be 412,156 Gg CO₂ equivalent (412.2 Mt CO₂ equivalent). [Note that 1,000 gigagrams (Gg) equals 1 megatonne (Mt).] Based on the provisional update, net removals from the LULUCF sector were projected to be 9,597 Gg CO₂ equivalent in 2010, compared to the 1990 level of 21,366 Gg CO₂ equivalent and the 2003 level of 22,861 Gg CO₂ equivalent. These net removals were calculated using the prescribed IPCC national inventory methodologies, and do not conform with the LULUCF eligibility criteria for the crediting of removals under Article 3.3 of the Kyoto Protocol.

RDP Table 2 presents provisional projections for emissions and removals in 2010 by sector. Historical data for 1990-2003 are provided for reference.

RDP Table 2: Projected emissions of gases and sources listed in Annex A of the Kyoto Protocol in 2010 (Gg CO₂ equivalent)

Sources: Ministry of Economic Development, Ministry of Agriculture and Forestry, and Ministry for the Environment

As noted above, New Zealand's May 2005 report on the Projected Balance of Units During the First Commitment Period of the Kyoto Protocol included an accounting of projected removals from Kyoto forests under Article 3.3 of the Kyoto Protocol during the first commitment period (2008-2012). This projection is reported in RDP Table 3.

RDP Table 3: Calculation of projected removal units (Mt CO₂ equivalent) [Note that 1,000 gigagrams (Gg) equals 1 megatonne (Mt).] in CP1 (figures have been rounded)

Source: Ministry for the Environment, 2005c

New Zealand's assigned amount for the first commitment period is five times the 1990 emissions level, or 307.6 Mt CO₂ equivalent. Additional detail on New Zealand's balance of units under the policy settings prior to the 2005 review is provided in the May 2005 report.

Uncertainty in the projections reflects the difficulty in modelling the complex interactions of the New Zealand energy sector, projecting agricultural markets and animal productivity, estimating the reductions from the climate change policy package and predicting removals from forest sinks prior to the New Zealand Carbon Accounting System being fully operational. In addition, a review has highlighted that a number of improvements are required in the model used for carbon dioxide emissions from the energy and industrial processes sector.

The updated projections show a substantial decrease from the 32.6 Mt CO₂ equivalent surplus during the first commitment period that was reported in the previous projection (May 2004) and the 55 Mt CO₂ equivalent surplus projected prior to ratification of the Kyoto Protocol. The decrease from the 2004 projection is due primarily to an increase in projected energy and industrial processes emissions and a decrease in the removals via forest sinks. The decrease in removals is due to the quantification of previously unknown risks and updating of previous estimates with improved scientific information.