Review of New Zealand's 2007 Net Position Report

• Executive Summary
• 1 Introduction
• 2 General Review
• 3 Sector Reviews
• 4 Uncertainties
• 5 Conclusions and Recommendations
• 6 References

1 Introduction

In 2005, AEA Energy & Environment (AEA), in collaboration with the Policy Studies Institute (PSI) and the Centre for Ecology and Hydrology (CEH), completed an indepth review of New Zealand’s greenhouse gas projections methodology and report titled ‘Projected balance of emission units during the first commitment period of the Kyoto Protocol’. The review (AEA, 2005) made a number of recommendations for improving the projections methodology.

The Ministry for the Environment has now commissioned AEA, PSI and CEH to review the 2007 update of the net position report. The report is a compilation of projections by sector from across government. Agriculture and forest sink projections are provided by the Ministry of Agriculture and Forestry, energy (including transport) and industrial process projections are from the Ministry of Economic Development and waste and solvent emission projections are from the Ministry for the Environment. The projections reflect the agreed policies as at the end of April 2007, and include a number of improvements that have been made to previous projections.

1.1 Background to the Kyoto Protocol

Combating climate change and minimising its potential consequences are key objectives of the UN Framework Convention on Climate Change (UNFCCC). A key objective of the UNFCCC is to achieve stabilisation of atmospheric greenhouse gas concentrations, which will ultimately require substantial reductions in global greenhouse gas emissions. As an initial step in this process, parties to the UNFCCC adopted the Kyoto Protocol in 1997. This requires developed countries as a whole to reduce their emissions of a basket of greenhouse gases to 5.2% below their levels in a given base year (1990 in most cases) by the period 2008–12 (the first commitment period). For New Zealand, the target is that the average basket of greenhouse gas emissions over the first commitment period is 100% of the emissions in 1990. Emissions may also be offset by increasing the amount of greenhouse gases removed by carbon sinks, such as forest planting, that have occurred since 1990.

1.2 Overview of net position report

The 2007 net position report (MfE, 2007) suggests that New Zealand’s net position is estimated to be a deficit of 45.5 million units over the first commitment period.¹ This figure has been revised upwards from the May 2006 estimate, which estimated that there would be a deficit of 41.2 million units. The main reasons for these changes are (MfE, 2007):

• New Zealand’s assigned amount increasing (1.9 million units) due to improvements in New Zealand’s Greenhouse Gas Inventory. Increasing the assigned amount lowers the net position deficit.

• New Zealand’s agriculture greenhouse gas emissions are now projected to be 4.3 million tonnes of carbon dioxide equivalent higher than projected in 2006. This is mainly attributable to projected increases in dairy cow numbers as a consequence of higher world commodity prices for dairy products.

• New Zealand’s emissions from energy (excluding transport) are now projected to be 1.5 million tonnes carbon dioxide equivalent higher than projected in 2006. A projected increase in emissions from the ‘other industrial’ and commercial sectors and a projected higher level of dairy processing contributed to the increase. However, these increases were largely offset by a reduction in projected emissions from electricity generation (due mainly to increased confidence about gas supply, reducing the projected amount of coal-fired generation).

• New Zealand’s transport emissions are projected to be 1.3 million tonnes carbon dioxide equivalent higher as a result of integrating the more comprehensive vehicle fleet emissions model to project transport emissions.

1.3 Scope of the review

The 2007 net position report provides information on the methodologies used to forecast emissions, how the new estimates compare with the 2006 estimates and describes the uncertainties surrounding the emissions estimates. In addition to the net position report, a range of additional information has been made available to the review team. These are documented in section 6. The 2005 net position review involved members of the project team meeting up with key contacts in various government departments. No meetings have taken place for the 2007 review, although e-mail, phone and video conferencing were used to discuss issues and obtain clarification as required.

The aims of this project (as outlined in the Ministry for the Environment’s work specification) are to assess whether the recommendations made in the previous review in 2005 have been implemented, identify any further areas for improvement, and to assess the approach taken to assess uncertainty.

Section 2 reviews the general approach taken and section 3 reviews the energy, transport, industry, waste, agriculture and land use, land use change and forestry (LULUCF) sectors in detail. Section 4 provides further information on the suggested combined approach to assessing uncertainty, and section 5 summarises the conclusions of the review.

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