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Projected balance of emissions units during the first commitment period of the Kyoto Protocol

Foreword

Acknowledgements

Executive Summary

1 Introduction

2 Projected balance of units over the first commitment period of the Kyoto Protocol

3 Projected emissions over the first commitment period of the Kyoto Protocol

4 Assigned amount units

5 Removal units from sinks

6 Reconciliation with previous projections

Appendix A. Projections of Agricultural Greenhouse Gas Emissions to 2010

7 Bibliography/References

Appendix A. Projections of Agricultural Greenhouse Gas Emissions to 2010

Ministry of Agriculture and Forestry

Introduction

Projections of methane and nitrous oxide emissions to 2010 from the agricultural sector are driven by future estimates of:

• animal numbers by species: dairy cattle, beef cattle, sheep and deer in 2010.
• enteric methane emissions per animal based on annual changes in emissions per animal since 1990.
• nitrogen output per animal based on annual changes in nitrogen output per animal since 1990.
• nitrogen fertiliser use based on annual rates of change of nitrogen fertiliser usage since 1990 supplemented by industry forecasts.

Two further scenarios of projected emissions in 2010 have also been produced. These represent best estimates of the upper and lower bounds of methane and nitrous oxide emissions. The upper and lower bounds have been calculated using upper and lower bounds for both animal numbers and annual methane /nitrogen output per animal.

Development of the 2010 Baseline Projections

Projections of the Animal Numbers

Projections of the livestock numbers for dairy cattle, beef cattle, sheep and deer are undertaken with an econometric model, the Pastoral Supply Response Model (PSRM). The PSRM is an annual time series model that is representative of the biological constraints and investment decisions made by New Zealand farmers. The projections are based predominantly on the provisional June 2004 results of Statistics New Zealand's Agricultural Production Survey. Product prices are those used in MAF projections prepared for The Treasury's Budget Economic and Fiscal Update.

Post-model adjustments are carried out based on known and estimated factors that may reduce the land area available for livestock as follows:

• The removal of South Island high country leasehold areas from livestock farming from June years 2002 to 2013 has an estimated cumulative loss of 0.5 million stock units (SU).
• The annual area of grazing land converted to forestry rises from the current low of 10,600 ha in the year to June 2004 to 18,700 ha in 2010. This compares with MAF's separately provided scenarios of 10,000ha, 20,000 ha and 30,000 ha for June year 2010. It is assumed that these areas displace sheep.
• Anticipated deforestation of an estimated total of 34,000 ha spread over June years 2005 to 2010 in the Central North Island. The land will go mostly into dairy.
• Sheep numbers are adjusted down in 2010 so that total SU of livestock plus the cumulative opportunity loss of SU displaced by forestry are equal to the level as at June 2009. The maximum SU is 97.951 million with 94.384 million from dairy, beef, sheep, deer and goats, and the balance is the cumulative SU displaced by forestry. This ensures that feed demand approximates feed supply over the longer term.

Productivity has improved since 1990 and is expected to increase further in the future. This is revealed in increasing kilograms of milk solids per cow, increasing lambs born per mated ewe and ewe hogget, and heavier carcass weights (particularly for lamb). Productivity increases are accounted for in the emissions model.

Table A1: Projected baseline animal numbers in 2010

Projections of Enteric Methane Emissions per Animal

Projections of methane emissions per animal in 2010 are derived from linear trends of the methane emissions per animal 1990-2003, extended out to 2010.

The per animal emissions used to derive the linear trends are sourced from the current national methane inventory and are calculated using the model developed by Clark et al (2003). See Figure one.

The model determines monthly feed intakes for different age classes of each animal species based on the mean national animal performance data derived from national statistics relevant for each species. For example, in dairy cattle, inputs include: animal bred, animal liveweight and milk production per animal, fat %, protein % per animal. For each animal species, an empirical relationship has been derived for the amount of enteric methane produced per unit of feed intake. These relationships have been developed in New Zealand for: deer, beef and dairy cattle, and sheep using the SF₆ technique to assess methane emissions in the field. From these estimates of feed intake per animal, and methane produced per unit of intake, an implied annual emission factor has been calculated per animal that takes into account the changes in animal performance over time.

The implied methane emission factors for dairy cattle, beef sheep and deer in 1990 and 2010 along with the correlation coefficient (r) for the linear trend in per animal emissions 1990-2003 are presented in table A2. The data indicate a very strong linear relationship between time and increase in methane emission per animal over the period 1990 to 2003, providing confidence in the projection of emissions to 2010.

Table A2: Annual methane emissions per animal 1990 and 2010, and the correlation coefficient (r) for the linear trend in per animal emissions 1990-2003.

Projections of Nitrous Oxide Emissions

Nitrous oxide emissions from animal excreta are a function of animal feed intake per annum and the nitrogen content of feed minus the nitrogen retained in animal product. Models developed by Clark et al (2003) for methane emissions also provide for nitrogen output per animal. Projections of nitrogen output per animal in 2010 were derived from linear trends of the nitrogen outputs per animal using data reported in the national inventory from per animal output from 1990 to 2003. Nitrous oxide emissions in 2010 were then calculated using the methodology used for the national inventory.

Table A3: Annual nitrogen excreta per animal 1990 and 2010 and the correlation coefficient (r) for the linear trend in per animal nitrogen excreta 1990-2003.

Projection of Nitrogen Fertiliser Use

Nitrogen fertiliser use has increased nearly 6 fold since 1990. Two methods were used to assess projections of nitrogen fertiliser to 2010. The first used projections of nitrogen fertiliser use derived from a linear trend of fertiliser use from 1990 to 2003. The correlation ( r ) was 0.96. The projected value for 2010 was 433,700 tonnes of nitrogen.

The second method used best fertiliser industry estimates provided through the Fertiliser Manufacturers Research Association which takes into account future exchange rates, agricultural commodity prices, shipping costs and general projected economic circumstances for agriculture. The projected best estimate value for 2010 was 408,500 tonnes.

Because of the large discrepancy, a mean value between these two estimates of 421,100 tonnes was used for estimating nitrous oxide emissions in 2010. This approach is reasonable since future changes such as limitations on nitrogen use in some catchments i.e. Lake Taupo and Lake Rotorua, the continuing conversion of pastoral land to forestry, the Clean Streams Accord and other Regional Council directives on good fertiliser practice are likely to limit the steep upwards trend in fertiliser nitrogen application seen in recent years.

Other Animal Species and Greenhouse Gas Sources

No projections were derived for the emissions of minor animal species present in the national inventory i.e. horses, goats, pigs, and poultry. This was also the case for nitrous oxide emission from crop stubble burning, savannah burning and nitrogen fixing crops. These emission sources make up less that 4 % of the agricultural sector emissions. 2003 inventory emission levels were used for 2010.

Development of the Upper Bounds for 2010 Projections

Introduction

Two future scenarios were developed: a high and low scenario. The high scenario combined the higher projected estimates for animal numbers, methane emission per head, nitrogen output per head and nitrogen fertiliser use. The low scenario combined the lower estimates of animal numbers, methane emission per head, nitrogen output per head and nitrogen fertiliser use. These two scenarios give an estimate of the upper and lower bounds of future projected emissions.

Animal Numbers

A sensitivity analysis was undertaken to provide some high and low projections of livestock numbers. This assumes that the 2004 livestock numbers change by plus and minus 5 percent. The PSRM was then re-run for both and post-model adjustments carried out. The high was allowed to rise to a maximum carrying capacity (including cumulative SU displaced by forestry) of 99.642 million SU which would occur at June 2011. The low was allowed to rise to a maximum carrying capacity of 96.470 million SU which would occur at June 2007. The baseline has a maximum carrying capacity of 97.951 million SU which would occur at June 2009.

Table A4: Upper and lower bounds for animal number projections in 2010.

Methane Emissions per Animal per Year

High and low estimates of methane emission per animal were obtained by calculating the 95% projection interval around the predicted mean values for all years beyond 2003. This gives an upper and lower bound for projected methane emission per head in 2010 (Table A5).

Table A5: Upper and lower bounds for projected methane emissions per head in 2010.

Nitrogen Excreta Output

High and low estimates of nitrogen output per animal were obtained by calculating the 95% projection interval around the predicted mean values for all years beyond 2003. This provides an upper and lower bound for projected methane emission per head in 2010 (Table A6).

Table A6: Upper and lower bounds for the projected quantity of nitrogen excreted per head in 2010.

Nitrogen Fertiliser

Scenarios for future nitrogen fertiliser use were based on the variation in nitrogen fertiliser projections provided by the Fertiliser Manufacturers Research Association. These indicated a low scenario of 86,000 tonnes less than the baseline estimate and a high scenario of 28,000 tonnes above the baseline estimate.

Table A7: Upper and lower bounds of projected nitrogen fertiliser use in 2010.

Assumptions and Limitations

The projections need to be assessed within the uncertainties of the biological processes involved and economic circumstances of the agricultural industry, which are largely driven by overseas markets.

At present animal performance in New Zealand is well below current biological limits and it seems reasonable to assume that the rate of increase in productivity per animal over the next 15 years should be similar to the rate of increase in animal performance over the past 13 years. A linear extrapolation of methane emissions was therefore considered appropriate.

At some stage in the future the rate of productivity increase may well decline due to resource limitation. However, balanced against this are industry strategy plans such as the dairy sector, which seeks to improve productivity in economic farm surplus by 4% per annum which is higher that the historic trend. Factors such as this have not been incorporated into the models. Likewise, mitigation technologies may become available that reduce emissions at an individual animal level over the next 15 years. These include products such as Monensin, a bloat control agent that has been shown to reduce methane emissions, or the widespread adoption of the nitrification inhibitor, DCD which has also been shown to reduce nitrous oxide emissions.