Foreword
This report outlines New Zealand's projected balance of greenhouse gas emission units for the first commitment period of the Kyoto Protocol (2008-12).
Given our dependence on agriculture, New Zealand is uniquely dependent for a western nation on our benign climate. If the world does not act to curb climate change, the impacts on our environment, economy and way of life could be severe. Floods and droughts hit our economy hard. A new June 2005 NIWA report shows that in some regions, what is now a one in twenty year drought could become a one in three year event. This is a threat New Zealand can't afford to ignore.
Over the last five years New Zealand has had one of the highest performing economies in the western world. This success brings challenges, such as the need to correct historic underinvestment in infrastructure and to address skills shortages. Greenhouse gas emissions are a further challenge resulting from this success. They are now forecast to be significantly higher than previously, particularly in the transport sector, and New Zealand is now likely to be a net buyer of emissions units in the 2008-2012 period. Although New Zealand's greenhouse gas emissions are only growing at around half the rate of GDP growth, the increase is still significant.
Officials have, appropriately, been conservative in their assumptions. For example, energy demand is assumed to grow steadily, rather than slowing in line with the Government's energy efficiency targets. Relatively low oil prices, and low levels of new natural gas discoveries feature. Officials also assume no gains arise from the agricultural research programme.
Some of the shift in the forecast relates to changes that have been made to the assumptions, measurement and modelling methodology since last year's report. These principally relate to the accounting of forest sinks (particularly scrub), and to changes in the energy sector modelling. Officials advise that given the ongoing revisions underway on the energy sector model, those results should be considered as provisional.
Overall, the significant change since last year's estimate is of concern, and raises questions around the degree of confidence that should be held in the projections. It is essential that estimates of emissions are as robust as possible. I have asked the Chief Executive of the Ministry for the Environment to arrange for an independent review of the assumptions and methodologies employed in this report, to enhance our level of confidence.
What is clear is that New Zealand, like the rest of the world, faces a significant challenge in further de-linking economic growth from that in greenhouse gas emissions. Tackling climate change will not be easy, but it is our obligation to future generations to begin.
Hon Pete Hodgson
Convenor, Ministerial Group on Climate Change
