This page provides an introduction to New Zealand's net position under the Kyoto Protocol and to the Kyoto Financial Position.
About the 2008-2012 net position under the Kyoto Protocol
The net position is a summary of New Zealand's greenhouse gas emissions over the first commitment period of the Kyoto Protocol and the Kyoto units available to balance these. The number, in millions of units, refers to the number of Kyoto units New Zealand will have to spare (surplus), or need to purchase (deficit) to meet our obligations for the first commitment period under the Kyoto Protocol.
The net position is calculated as the difference between total emissions (from the Greenhouse Gas Inventory) and Kyoto units held in the Government account (which includes RMUs representing forestry sequestration).
New Zealand’s commitment under the Kyoto Protocol
Under the Kyoto Protocol, New Zealand committed to limit emissions to our 1990 levels on average over the first commitment period or to take responsibility for any emissions over this level. This is a total of 309.6 Mt CO2-e over 2008-2012, which is five times New Zealand’s 1990 emissions of 61.9 Mt CO2-e.
How the NZ ETS affects the net position
Participants of the New Zealand Emissions Trading Scheme (NZ ETS) must surrender emission units to the Government for some or all of their emissions. These can be New Zealand Units (NZUs) which can only be used in the NZ ETS or one of a variety of Kyoto units. These Kyoto units that go into the Government account are recognised under the Kyoto Protocol and therefore contribute to the net position.
The surrender of Kyoto units in the NZ ETS in the past has increased the net position.
The ‘true-up’ period
A 100 day ‘true-up’ period was held after greenhouse gas inventory reviews were completed on all parties to the Kyoto Protocol. Over this period, parties could continue to trade Kyoto units to ensure they have more units than tonnes of CO2-e emitted.
All countries that made commitments to a target for the first commitment period of the Kyoto Protocol were required to retire Kyoto emission units equal to their actual greenhouse gas emissions for the commitment period, which ran from 2008 to 2012. The deadline for retirement was the end of the Kyoto true-up period on 18 November 2015.
New Zealand completed its retirement transaction for the first commitment period in October. We were required to submit a true-up report to the United Nations Framework Convention on Climate Change providing details of the units that were retired and the units that the Crown still owns.
See Report upon expiration of the additional period for fulfilling commitments by New Zealand and related spreadsheets.
For the process and requirements for the true-up see True-up period reporting and review process [United Nations Framework Convention on Climate Change website].
The Kyoto Financial Position
The Kyoto Financial Position is the value of the net position if the Government sold surplus or bought needed units on the international market. It is calculated using current trading prices for emissions and the exchange rate. This asset or liability must be reported in the Government’s financial accounts.