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Chapter 1: Introduction

1.1 Background

Greenhouse gases trap warmth from the sun and make life on Earth possible. Without them, too much heat would escape and the surface of the planet would freeze. However, over the previous 50 to 100 years, the concentration of the greenhouse gases carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) in the atmosphere has been increasing. Since 1750, the concentration of CO2 has increased 31%, the concentration of CH4 has increased 151% and the concentration of N2O has increased 17% (IPCC, 2001). The increased concentration of these gases produces an 'enhanced greenhouse effect' that decreases the amount of Earth's heat that is radiated back into space. The effects on the climate due to the 'enhanced greenhouse effect' will be different in different parts of the world (IPCC, 2001). However in general, temperatures and sea levels are expected to rise, and the frequency of extreme weather events such as droughts and floods are expected to increase. The changes ahead of us are expected to be larger and to happen more quickly than any recent natural climate variations.

1.1.1 The UNFCCC & the Kyoto Protocol

In 1990, the Intergovernmental Panel on Climate Change (IPCC) concluded that human-induced climate change was a threat to our future. In response, the United Nations General Assembly convened a series of meetings that culminated in the adoption of the United Nations Framework Convention on Climate Change (UNFCCC) at the 'Earth Summit' in Rio de Janeiro in May 1992. The UNFCCC took effect on 21 March 1994 and has been signed and ratified by 188 nations, including New Zealand.

The main objective of the UNFCCC is to achieve stabilisation of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic (caused by humans) interference with the climate system. Such a level should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner.

All countries that ratify the UNFCCC are required to address climate change through national or regional programmes to prepare for adaptation to the impacts of climate change, protect and enhance sinks (e.g. forests), monitor emissions trends via greenhouse gas inventories and provide financial assistance to developing countries. Developed countries agreed to non-binding targets to reduce greenhouse gas emissions to 1990 levels by 2000.

Only a few countries made appreciable progress towards achieving their targets. The international community recognised that the UNFCCC alone was not enough to ensure greenhouse gas levels would be reduced to safe levels and that more urgent action was needed. In response, Annex I Parties (i.e. developed countries and countries with economies in transition) launched a new round of talks for stronger and more detailed commitments for developed countries. After two and a half years of negotiations, the Kyoto Protocol was adopted at Kyoto, Japan on 11 December 1997. New Zealand ratified the Kyoto Protocol on 19 December 2002. The Protocol came into force on 16 February 2005.

The Kyoto Protocol shares the UNFCCC's objectives, principles and institutions, but significantly strengthens it by committing Annex I Parties to individual, legally-binding targets to limit or reduce their greenhouse gas emissions. Only Parties to the Convention that have also become Parties to the Protocol, by ratifying, accepting, approving, or acceding to it, are bound by the Protocol's commitments. Article 3 of the Kyoto Protocol states that the Parties that ratify the Protocol shall individually or jointly ensure that their aggregate anthropogenic greenhouse gas emissions do not exceed their 'assigned amounts' with a view to reducing their overall emissions by at least 5% below 1990 levels in the 1st commitment period (2008 to 2012).

The 'assigned amount' is the maximum amount of emissions (measured as the equivalent in CO2) that a Party may emit over the commitment period in order to comply with its emissions target. New Zealand's target is to reduce its emissions to the level they were in 1990, therefore the assigned amount over the 1st commitment period is the gross emissions in 1990 multiplied by five (i.e. the five years of the commitment period). Gross emissions do not include emissions and removals from the land-use, land-use change and forestry sector (LULUCF).

To achieve their targets, Annex I Parties must put in place domestic policies and measures to address emissions. Emissions may also be offset by increasing the amount of greenhouse gases removed from the atmosphere by carbon 'sinks' in the LULUCF sector. The Kyoto Protocol also defined three 'flexibility mechanisms' to lower the overall costs of achieving its emissions targets - the clean development mechanism (CDM), Joint Implementation (JI) and emissions trading. These mechanisms enable Parties to access cost-effective opportunities to reduce emissions or to remove carbon from the atmosphere in other countries. While the cost of limiting emissions varies considerably from region to region, the benefit for the atmosphere is the same, wherever the action is taken. More information on these mechanisms can be obtained from the New Zealand Government's Climate Change website (http://www.climatechange.govt.nz) and the website of the UNFCCC (www.unfccc.int).

1.1.2 A National Greenhouse Gas Inventory

The development and publication of an annual inventory of all human-induced emissions and removals of greenhouse gases not controlled by the Montreal Protocol is part of New Zealand's obligations to the UNFCCC (Articles 4 and 12) and the Kyoto Protocol (Article 7). The inventory is the tool for measuring New Zealand's progress against these obligations. The content and format of the inventory is prescribed by the IPCC (1996, 2000, 2003) and relevant decisions of the Conference of the Parties (COP), the most recent being FCCC/SBSTA/2004/8. A complete inventory submission requires two components: the national inventory report (NIR) and emissions and removal data in the common reporting format (CRF). Inventories are subject to an annual three-stage technical review process administered by the UNFCCC secretariat.

The inventory reports emissions and removals of the gases CO2, CH4, N2O, hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6) from six sectors: energy, industrial processes, solvents, agriculture, LULUCF and waste. The indirect greenhouse gases carbon monoxide (CO), oxides of nitrogen (NOX) and non-methane volatile organic compounds (NMVOC) are also included in the inventory, as is sulphur dioxide (SO2). However, only emissions and removals of CO2, CH4, N2O, HFCs, PFCs and SF6 are reported in New Zealand's total emissions under the UNFCCC and are counted in the target for the Kyoto Protocol.

Global warming potentials (GWPs) are used to convert emissions of each gas to an equivalent amount of CO2 i.e. GWPs represent the relative warming effect, or cumulative radiative forcing, of a unit mass of the gas when compared with the same mass of CO2 over a specific period. The UNFCCC reporting requirements (FCCC/SBSTA/2004/8) specify that the 100-year GWPs contained in the IPCC Second Assessment Report (IPCC, 1995) are used in national inventories (Table 1.1).

Table 1.1 Common GWP values from the IPCC Second Assessment Report (1995)

Gas Global warming potential

CO2

1

CH4

21

N2O

310

CF4 (PFC)

6,500

C2F6 (PFC)

9,200

SF6

23,900

New Zealand is aware of the requirement under Article 5.1 of the Kyoto Protocol to have in place a national system for its greenhouse gas inventory. Although New Zealand is yet to formally describe the national system, many of the arrangements detailed in the guidelines for national systems are described in this National Inventory Report (NIR) e.g. designation of the national identity and assignment of responsibilities for inventory preparation, and the development of remaining requirements in progress.

1.2 Institutional arrangements

The Climate Change Response Act 2002 (CCRA) came into force to enable New Zealand to meet its international obligations under the UNFCCC and the Kyoto Protocol. The CCRA names the person "who is for the time being the chief executive of the Ministry for the Environment" as New Zealand's inventory agency. The section 'Part 2 Institutional Arrangements Subpart 3 - Inventory Agency' of the CCRA (2002) specifies the primary functions of the inventory agency, including:

  • "to estimate annually New Zealand's human-induced emissions by sources and removals by sinks of greenhouse gases" (32.1(a))
  • "to prepare New Zealand's annual inventory report under Article 7.1 of the Protocol and New Zealand's national communication (or periodic report) under Article 7.2 of the Protocol and Article 12 of the Convention" (32.1(b)(i) and (ii)).

The CCRA also specifies the responsibilities of the inventory agency in carrying out its functions, including record keeping and publication of the inventory. Part 3 of the CCRA provides for the authorisation of inspectors to collect information needed to estimate emissions or removals of greenhouse gases.

The Ministry for the Environment (MfE) is responsible for overall development, compilation and submission of the annual inventory to the UNFCCC. The MfE also produces estimates of emissions and removals from the LULUCF sector (except planted forests) and the waste sector.

The Ministry of Economic Development (MED) collects and processes all emissions from the energy sector and CO2 emissions from the industrial processes sector. Emissions of the non-CO2 gases from the industrial processes sector are obtained via industry consultants.

The Ministry for Agriculture and Forestry (MAF) manages the agriculture sector and removals from planted forests in the LULUCF sector. The inventory estimates are underpinned by the research and modelling of researchers at New Zealand's Crown Research Institutes and universities.

1.3 Inventory preparation processes

New Zealand submits its national inventory to the UNFCCC secretariat by 15 April each year. The inventory is for the base year (1990) to two years prior to the current calendar year. Generation of the data in the Common Reporting Format (CRF) and production of the NIR occurs over the period February to April as activity data statistics and emissions data become available from the various participating institutions mentioned in section 1.2 'Institutional Arrangements'. National inventory compilation occurs at the MfE. MfE officials also undertake quality control procedures on emissions data, calculate the inventory uncertainty and the key category assessment. The inventory and all required data for the submission to the UNFCCC are stored on the MfE's central computer network in a controlled file system.

1.4 Methodologies and data

The guiding documents in inventory preparation are the 'Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories' (IPCC, 1996), the 'Good Practice Guidance and Uncertainty Management in National Greenhouse Gas Inventories' (IPCC, 2000), 'Good Practice Guidance for Land-Use, Land-Use Change and Forestry' (IPCC, 2003) and the UNFCCC guidelines on reporting and review (FCCC/SBSTA/2004/8). The concepts contained in 'Good Practice Guidance' are being implemented in stages, according to sector priorities and national circumstances.

Energy: Greenhouse gas emissions from the energy sector are calculated using an IPCC Tier 1 approach. Activity data (fuel consumed) are multiplied by the emission factors of specific fuels. Activity data come from nationally collected surveys developed by Statistics New Zealand (New Zealand's national statistics agency) and industry-supplied information (refer Chapter 3 and Annex 2). CO2 emission factors are usually New Zealand specific but applicable IPCC default factors are used for non-CO2 emissions where New Zealand data are not available or not well supported. In the 2003 inventory, the Tier 1 emissions from road transport are supplemented with the results from a Tier 2 model.

Industrial processes: CO2 emissions and activity data for the industrial processes sector are supplied directly to the MED by industry sources. A combination of IPCC Tier 1 and Tier 2 processes are used and emission factors are country specific. Activity data for the non-CO2 gases are collated via survey. Emissions of HFCs and PFCs are estimated using an IPCC Tier 2 approach and SF6 emissions from large users are assessed via a Tier 3a method.

Solvents: New Zealand's relatively small manufacturing base means that solvent use is lower than in many other countries. Estimates of emissions are calculated using a consumption-based approach. Activity data are obtained via a survey of industry.

Agriculture: Animal numbers are obtained from Statistics New Zealand, supplemented by estimates from the MAF. A Tier 2 methodology is used to estimate CH4 emissions from dairy, beef, sheep and deer. The methodology uses animal productivity data to estimate dry matter intake and CH4 production is determined from this intake. The same dry matter intake data are used to calculate N2O emissions from excreta. A Tier 1 approach is used for non-significant species.

Land-use change and forestry: In previous inventories, New Zealand has only included information on net changes in the living biomass from the LULUCF category 'forest land remaining forest land (planted forest)' and emissions and removals from the planting of forest on grassland. In the 2003 inventory, New Zealand has improved the completeness of the LULUCF sector reporting by including a Tier 1 estimate for all LULUCF land use categories from 1997 to 2003. The procedure uses a modified national land cover dataset developed from remote sensing. Data for 1990 are not yet available but will be developed as part of the New Zealand Carbon Accounting System (NZCAS) described in Annex 3.2. These additional data will enable New Zealand to submit a complete time-series for all LULUCF categories.

Changes in planted forest stocks are assessed from forest survey data and computer modelling of the planted forest estate. Ongoing work in this sector includes research on the carbon stored in soils, grassland with woody vegetation and natural forests (Annex 3.2).

Waste: Emissions from the waste sector are estimated using waste survey data combined with population data. The calculation of emissions from solid waste disposal uses an IPCC Tier 2 method with country-specific emission factors. CH4 and N2O emissions from domestic and industrial wastewater handling are calculated using a refinement of the IPCC methodology (IPCC, 1996). New Zealand has not estimated emissions from waste incineration as they are considered to be negligible. Most regional and territorial councils have banned the open burning of waste and there is no incineration of municipal waste in New Zealand.

1.5 Key categories

Good Practice Guidance (GPG) (IPCC, 2000) identifies a key category as "one that is prioritised within the national inventory system because its estimate has a significant influence on a country's total inventory of direct greenhouse gases in terms of the absolute level of emissions, the trend in emissions, or both". Key categories are identified within the inventory so that the resources available for inventory preparation are prioritised.

The key categories in the New Zealand inventory have been assessed using the Good Practice Tier 1 level and trend methodologies (IPCC, 2000; 2003). The Good Practice methodologies identify sources of emissions and removals that sum to 95% of the total emissions or 95% of the trend of the inventory in absolute terms.

LULUCF categories have been included in the key category analysis for the first time in the 2003 inventory. Following GPG-LULUCF (IPCC, 2003) the key category analysis is performed once for the inventory excluding LULUCF categories and then repeated for the full inventory including the LULUCF categories. Non-LULUCF categories that are identified as key in the first analysis but do not appear as key when the LULUCF categories are included are still considered as key.

The key categories identified in the 2003 inventory are summarised in Table 1.5.1. The major contribution to the level analysis (Table 1.5.2 a & b) are from the LULUCF category 'forest land remaining forest land' and from CH4 emissions from enteric fermentation in domestic livestock at 24.5% and 22.6% of the total respectively. CH4 emissions from enteric fermentation in domestic livestock are the largest single source of emissions, comprising 31.3% of total emissions in 2003 (Table 1.5.2 (b)). The next largest contribution to emissions is CO2 emissions from road transportation, comprising 16.1% of total emissions in 2003.

The largest contribution to the trend analysis is from CO2 emissions from road transportation, followed by CH4 emissions from enteric fermentation in domestic livestock and forest land remaining forest land. It is clear that these three categories have a major effect on the New Zealand inventory.

While CO2 emissions from the industrial processes of ammonia and urea manufacture (CRF category 2B5) did not appear in the top 95% of categories for the quantitative level and trend analyses, the source is considered a qualitative key category because of the large increase in nitrogenous fertiliser use observed in the agriculture sector.

There were two modifications to the IPCC suggested source categories to reflect New Zealand's national circumstances. The category for fugitive emissions from geothermal operations was separated from the 'fugitive emissions oil and gas' category and CO2 emissions from ammonia and urea manufacture were included in the analysis. More information on the calculation of the level and trend analysis is included in Annex 1.

Table 1.5.1 Summary of key categories in the 2003 inventory (including and excluding LULUCF activities)

Quantitative method used: Tier 1    
IPCC source categories Gas Criteria for identification
Energy sector    

CO2 emissions from stationary combustion - solid

CO2

level, trend

CO2 emissions from stationary combustion - liquid

CO2

level, trend

CO2 emissions from stationary combustion - gas

CO2

level, trend

Mobile combustion - road vehicles

CO2

level, trend

Mobile combustion - road vehicles

CH4

trend

Mobile combustion - aviation

CO2

level, trend

Fugitive emissions from geothermal operations

CO2

trend

Industrial processes sector

   

Emissions from cement production

CO2

level

Emissions from the iron and steel industry

CO2

level

Emissions from aluminium production

CO2

level

PFCs from aluminium production

PFC

trend

Emissions from substitutes for ozone depleting substances

Several

level, trend

Agricultural sector

   

Emissions from enteric fermentation in domestic livestock

CH4

level, trend

Emissions from manure management

CH4

level, trend

Direct emissions from agricultural soils

N2O

level, trend

Emissions from animal deposition on agricultural soils

N2O

level, trend

Indirect emissions from nitrogen used in agriculture

N2O

level

LULUCF sector

   

Forest land remaining forest land

CO2

level, trend

Cropland remaining cropland

CO2

level

Conversion to forest land

CO2

level, trend

Conversion to grassland

CO2

level

Waste sector

   

Emissions from solid waste disposal sites

CH4

level, trend

Table 1.5.2 (a& b) Key category analysis for the 2003 inventory - Tier 1 level assessment including LULUCF (a) and excluding LULUCF (b)

(a) Tier 1 Category Level Assessment - including LULUCF
IPCC source categories Gas 2003 estimate Gg Level assessment Cumulative total

Forest land remaining forest land

CO2

25583.91

24.5

24.5

Emissions from enteric fermentation in domestic livestock

CH4

23592.21

22.6

47.1

Mobile combustion - road vehicles

CO2

12094.67

11.6

58.7

Emissions from stationary combustion - gas

CO2

8558.10

8.2

66.9

Emissions from agricultural soils - animal production

N2O

7454.62

7.1

74.1

Emissions from stationary combustion - solid

CO2

5435.29

5.2

79.3

Indirect emissions from nitrogen used in agriculture

N2O

3328.82

3.2

82.5

Emissions from stationary combustion - liquid

CO2

2797.95

2.7

85.2

Direct emissions from agricultural soils

N2O

2185.55

2.1

87.3

Conversion to forest land

CO2

1765.49

1.7

88.9

Emissions from the iron and steel industry

CO2

1716.80

1.6

90.6

Emissions from solid waste disposal sites

CH4

1425.48

1.4

92.0

Mobile combustion - aviation

CO2

1158.33

1.1

93.1

Conversion to grassland

CO2

688.02

0.7

93.7

Cropland remaining cropland

CO2

653.46

0.6

94.4

Emissions from manure management

CH4

549.44

0.5

94.9

Emissions from aluminium production

CO2

542.14

0.5

95.4

(b) Tier 1 Source Category Level Assessment - excluding LULUCF
IPCC source categories Gas 2003 estimate Gg Level assessment Cumulative total

Emissions from enteric fermentation in domestic livestock

CH4

23592.21

31.3

31.3

Mobile combustion - road vehicles

CO2

12094.67

16.1

47.4

Emissions from stationary combustion - gas

CO2

8558.10

11.4

58.7

Emissions from agricultural soils - animal production

N2O

7454.62

9.9

68.6

Emissions from stationary combustion - solid

CO2

5435.29

7.2

75.8

Indirect emissions from nitrogen used in agriculture

N2O

3328.82

4.4

80.2

Emissions from stationary combustion - liquid

CO2

2797.95

3.7

84.0

Direct emissions from agricultural soils

N2O

2185.55

2.9

86.9

Emissions from the iron and steel industry

CO2

1716.80

2.3

89.1

Emissions from solid waste disposal sites

CH4

1425.48

1.9

91.0

Mobile combustion - aviation

CO2

1158.33

1.5

92.6

Emissions from manure management

CH4

549.44

0.7

93.3

Emissions from aluminium production

CO2

542.14

0.7

94.0

Emissions from cement production

CO2

527.47

0.7

94.7

Emissions from substitutes for ozone depleting substances

HFCs

403.96

0.5

95.3

 

Table 1.5.3 Key category analysis for the 2003 inventory - Tier 1 trend assessment

Tier 1 Source Category Trend Assessment
IPCC source categories Gas Base year estimate Gg 2003 estimate Gg Trend assessment Contribution to trend Cumulative total

Including LULUCF activities

Mobile combustion - road vehicles

CO2

7534.65

12094.67

0.031

16.9

16.9

Emissions from enteric fermentation in domestic livestock

CH4

21530.77

23592.21

0.030

16.3

33.2

Forest land remaining forest land

CO2

22677.47

25583.91

0.024

12.9

46.1

Emissions from stationary combustion - solid

CO2

3169.41

5435.29

0.017

9.2

55.3

Direct emissions from agricultural soils

N2O

585.22

2185.55

0.016

8.7

63.9

Emissions from solid waste disposal sites

CH4

2177.70

1425.48

0.013

7.3

71.3

Emissions from stationary combustion - gas

CO2

7682.58

8558.10

0.009

5.0

76.3

Emissions from agricultural soils - animal production

N2O

6767.81

7454.62

0.009

4.9

81.2

Conversion to forest land

CO2

960.59

1765.49

0.006

3.5

84.6

PFCs from aluminium production

PFC

515.60

80.70

0.006

3.2

87.9

Emissions from substitutes for ozone depleting substances

HFCs

0.00

403.96

0.004

2.4

90.3

Emissions from stationary combustion - liquid

CO2

2546.55

2797.95

0.003

1.9

92.2

Mobile combustion - aviation

CO2

772.83

1158.33

0.002

1.2

93.4

Fugitive emissions from geothermal operations

CO2

357.34

269.11

0.002

1.0

94.4

Emissions from manure management

CH4

574.51

549.44

0.002

0.9

95.3

Additional key categories when excluding LULUCF activities

Mobile combustion - road vehicles

CH4

148.20

50.44

0.002

0.9

95.5

 

1.6 Quality assurance and quality control

Quality assurance (QA) and quality control (QC) are an integral part of preparing New Zealand's inventory. The MfE developed a QA/QC plan in 2004 as required by the UNFCCC guidelines (FCCC/CP/20004/8) to formalise, document and archive the QC and QA procedures.

1.6.1 Quality control

In the preparation of the 2003 inventory, the MfE continued to develop the Tier 1 QC checksheet first used in the preparation of the 2002 inventory. The Tier 1 checksheet is based on the procedures suggested in Good Practice Guidance (IPCC, 2000 - refer Annex 6). For the 2003 inventory, the Tier 1 QC checksheets were used on all key categories and a selection on non-key source categories. Officials from the MED completed the QC checksheets on the energy sector prior to providing the emissions data to MfE.

In addition to the formal QC checks, data in the underpinning worksheets and entered into the UNFCCC secretariat's CRF Reporter database are checked visually for anomalies, errors and omissions. In the preparation of the 2003 inventory, the MfE used the data checking procedures included in the CRF Reporter software to ensure the data submitted to the UNFCCC secretariat were complete.

1.6.2 Quality assurance

Quality assurance reviews of individual sectors and categories are commissioned by the MfE. As part of the QA procedures for the 2003 inventory, the quality management system was reviewed by consultants, a peer review on substitutes for ozone depleting substances (as part of the industrial processes sector) was commissioned, and a parameter change in the agricultural sector was peer-reviewed before being included in the 2003 inventory. A history of reviews, their key conclusions and follow up are included as QA documentation in Annex 6. In addition, the methodologies used in the agricultural and LULUCF sectors have undergone scientific peer-review before inclusion in New Zealand's inventory.

A large part of the data in the energy and agriculture sectors are compiled using data collected in national surveys. These surveys are conducted and administered by Statistics New Zealand which conducts its own rigorous quality assurance and quality control procedures on the data.

1.6.3 UNFCCC annual inventory review

New Zealand's greenhouse gas inventory was reviewed in 2001 and 2002 as part of a pilot study of the technical review process (UNFCCC, 2001a, 2001b, 2002), where the inventory was subject to detailed in-country, centralised and desk review procedures. In 2003 and 2004, the inventory was reviewed during a centralised review procedure. In all cases, the reviews were conducted by an expert review team comprised of experts nominated by Parties to the UNFCCC. Transcripts of the reviews are available from the UNFCCC website (www.unfccc.int).

1.7 Inventory uncertainty

Uncertainty estimates are an essential element of a complete emissions inventory. The purpose of uncertainty information is not to dispute the validity of the inventory estimates, but to help prioritise efforts to improve the accuracy of inventories in the future and guide decisions on methodological choice (IPCC, 2000). Good Practice also notes that inventories prepared following the methodologies in Good Practice Guidance will typically contain a wide range of emission estimates, varying from carefully measured and demonstrably complete data on emissions to order-of-magnitude estimates of highly variable N2O fluxes from soils and waterways.

New Zealand has included a Tier 1 uncertainty analysis as required by the inventory guidelines (FCCC/SBSTA/2004/8) and Good Practice. Uncertainties in the categories are combined to provide uncertainty estimates for the entire inventory in any year and the uncertainty in the overall inventory trend over time. LULUCF categories have been included using the absolute value of any removals of CO2 (Table A7.1). Table A7.2 calculates the uncertainty only in emissions i.e. excluding LULUCF removals.

The calculated uncertainty for New Zealand's total inventory (emissions and removals) in 2003 is ±16.9%. However the uncertainty in the overall trend from 1990-2003 is lower at only ±4.2%. The uncertainty in total emissions is ±21.1% with ±4.9% uncertainty in the trend of emissions. The trend is critical to the UNFCCC and Kyoto Protocol reporting where New Zealand's emissions are compared to the 1990 baseline.

The high uncertainty in a given year is dominated by emissions of CH4 from enteric fermentation (Chapter 6, section 6.2) and N2O emissions from agricultural soils (section 6.5). These categories comprise 12.0% and 9.1% respectively of the uncertainty as a percentage of New Zealand's total emissions and removals. The apparent high uncertainty in these categories reflects the inherent variability when estimating emissions from natural systems e.g. the uncertainty in cow dry-matter intake and CH4 emissions per unit of dry-matter. With the agricultural sector comprising approximately half of New Zealand's emissions, high uncertainty in a given year is inevitable. Removals of CO2 from forest land is also a major contribution to the uncertainty for 2003 at 6.7% of New Zealand's total emissions and removals. In comparison, the uncertainty in CO2 emissions from burning of fossil fuels is significantly lower at only 1.5% of the total.

Uncertainty in the trend is dominated by CO2 emissions from the energy sector, at 2.6% of the trend. This is because of the size of the sector and that the uncertainty in energy activity data is greater than the uncertainty in energy emission factors. The other major contributors to trend uncertainty are removals of CO2 by forest land (Chapter 7, section 7.2) and CH4 from enteric fermentation in domestic livestock.

In most cases, the uncertainty values are determined by either expert judgement from sectoral or industry experts, by analysis of emission factors or activity data, or by referring to uncertainty ranges quoted in the IPCC documentation. A Monte Carlo simulation was used to determine uncertainty for CH4 from enteric fermentation and N2O from agricultural soils in the 2001/2002 inventory. The 95% confidence intervals developed from the Monte Carlo simulation were extended to the 2003 inventory.

1.8 Inventory completeness

The New Zealand inventory for the 2003 year can be described as nearly complete with all IPCC source categories that occur in New Zealand or that have emissions assessed to be above a negligible level reported. Planned improvements in the inventory will address required improvements in methodologies (e.g. CH4 emissions from manure management) and in activity data (e.g. the recovered CH4 from solid waste disposal sites and attempt to quantify small sources of emissions previously reported as negligible e.g. soda ash production).

New Zealand reports emissions and removals from the LULUCF categories 'forest land remaining forest land' for planted forests and for 'grassland converted to forest land' for all years 1990-2003, however data for the other LULUCF categories (natural forests, cropland, grassland, wetland, settlement and other land) are not available for 1990 to 1996. This is an inconsistency in the time-series that New Zealand will correct with data developed as part of the New Zealand Carbon Accounting System (NZCAS). Development of the NZCAS will also reduce the uncertainty by using country-specific emission and removal factors and utilise UNFCCC category specific activity data. Details of the NZCAS development are included in Annex 3.2.

Emissions of CO2 and CH4 from geothermal electricity generation are also a significant source in New Zealand. These emissions are reported as fugitive emissions in the energy sector. Sites with naturally occurring emissions where there is no electricity generation are excluded from the inventory.

In accordance with good practice, New Zealand has focused its resources for inventory development on the key source categories and some categories considered to have negligible emissions are reported as not estimated ('NE'). New Zealand will review emissions from these categories as resources permit.