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2.1 International framework and institutions


2.1.1 The United Nations Framework Convention on Climate Change (UNFCCC)

The United Nations Framework Convention on Climate Change (UNFCCC) is an international environmental treaty with the long-term objective of stabilising greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic (man-made) interference with the climate system.

The UNFCCC was adopted at the Earth Summit in Rio de Janeiro in May 1992. It was the culmination of a series of meetings convened by the United Nations General Assembly in response to the First Assessment Report of the Intergovernmental Panel on Climate Change.

The UNFCCC sets out broad principles for responding to climate change and sets up a process through which governments can meet regularly. It encourages scientific research, sharing and exchange of technology and know-how, and education about the effects of climate change and how we must deal with them. The UNFCCC took effect on 21 March 1994. It has been ratified by 189 parties.

Parties to the UNFCCC are organised and grouped in different ways depending on the context: convention status, UNFCCC procedures, and negotiating groups.

Convention status

The UNFCCC divides countries into three main groups according to differing commitments: Annex I Parties, Annex II Parties and Non-Annex I Parties.

  • Annex I Parties include the industrialised countries that were members of the Organisation for Economic Co-operation and Development (OECD) in 1992, which includes New Zealand, plus countries with economies in transition (the EIT Parties), including the Russian Federation, the Baltic States and several Central and Eastern European States. The membership of Annex I may be amended by a decision of the Conference of the Parties, or by parties to the Convention that are not part of Annex I declaring that they intend to be bound by the rules for Annex I Parties
  • Annex II Parties consist of the OECD members of Annex I, but not the EIT Parties. They are required to provide financial resources to enable developing countries to undertake emissions-reduction activities under the Convention and to help them adapt to adverse effects of climate change. In addition, they have to "take all practicable steps" to promote the development and transfer of environmentally friendly technologies to EIT Parties and developing countries. Funding provided by Annex II Parties is channelled mostly through the Convention’s financial mechanisms
  • Non-Annex I Parties are mostly developing countries. Certain groups of developing countries are recognised by the Convention as being especially vulnerable to the adverse impacts of climate change, including countries with low-lying coastal areas and those prone to desertification and drought. Least Developed Counties and Small Island Developing States are examples (see below). Others, such as countries that rely heavily on income from fossil fuel production and commerce, consider themselves vulnerable to the potential economic impacts of climate change response measures. The Convention emphasises activities that promise to answer the special needs and concerns of vulnerable countries, through provisions such as investment, insurance and technology transfer.

UNFCCC procedures

Parties to the UNFCCC are organised into five regional groups, in line with normal United Nations practice: the African Group, the Asian Group, the Eastern European Group, the Latin American and Caribbean Group, and the Western European and Other Group of States (WEOG; the "Other States" include New Zealand, Australia, Canada, Iceland, Norway, Switzerland and the United States of America). The five regional groups are used in the context of UNFCCC procedures; eg, nominations for election to positions.

Negotiating groups

Developing countries generally work through the Group of 77(G-77)and China to establish and represent common negotiating positions. The G-77 was founded in 1964 in the context of the United Nations Conference on Trade and Development and now functions throughout the United Nations system. It has over 130 members. China is not officially a member of the G-77 but works closely with the group, and positions are often put forward jointly in the name of G-77 and China. The country holding the Chair of the G-77 (which rotates every year) often speaks for the G-77 and China as a whole in meetings. However, because the G-77 and China is a diverse group with differing interests on climate change issues, individual developing countries also intervene in discussions, as do other groupings within the G-77, including:

  • the African Group
  • the Alliance of Small Island States (AOSIS). This is a coalition of some 43 low-lying and small island countries, most of which are members of the G-77, that are particularly vulnerable to sea-level rise. AOSIS countries are united by the threat that climate change poses to their survival and frequently adopt a common stance in negotiations 
  • the group of Least Developed Countries (LDCs). This comprises the 48 parties classified as least developed countries by the United Nations. LDCs are given special consideration under the Convention on account of their limited capacity to respond to climate change and adapt to its adverse effects. Parties are urged to take full account of the special situation of LDCs when considering funding and technology-transfer activities
  • oil-producing states. While not labelled as a group in the same way as those above, oil-producing states often support one another in discussions. Saudi Arabia often takes the lead.

The 25 members of the European Union and the European Commission agree on common negotiating positions in advance. The country that holds the European Union presidency (which rotates every six months) then speaks for the group in meetings. The European Union is itself a party to the Convention and is represented by the European Commission, although it does not have a separate vote from its members.

The Umbrella Group is an informal grouping of non-European Union developed countries that cooperate within the UNFCCC process. The group was formed following negotiation of the Kyoto Protocol and has nine members: New Zealand, Australia, Japan, Canada, the United State, Iceland, Norway, the Russian Federation and the Ukraine. The informal nature of the grouping enables cooperation and common positions where possible, while also allowing for divergence of views to be fully respected. The informal motto of the group “working together, not bound together” reflects this flexibility. The group meets daily during UNFCCC meetings and has met intersessionally at times.

2.1.2 New Zealand obligations under the Convention

The UNFCCC, as originally framed, set no mandatory limits on greenhouse gas emissions for individual nations and contained no enforcement provisions. It is therefore considered legally non-binding.

Countries that have ratified the UNFCCC must take measures to address climate change, including:

  • developing greenhouse gas inventories
  • undertaking national or regional programmes
  • preparing for adaptation to the impacts of climate change
  • encouraging the development and diffusion of climate change technologies
  • protecting and enhancing areas that remove carbon dioxide from the atmosphere (such as forest sinks)
  • promoting, and cooperating in, education, training and public awareness related to climate change.

Developed countries, including New Zealand, are required to take the lead in modifying longer-term trends in anthropogenic greenhouse gas emissions. They must:

  • put in place policies and measures to reduce the emission of greenhouse gases, with the aim of reducing greenhouse gas emissions to 1990 levels
  • periodically communicate detailed information on their policies and measures to the secretariat of the UNFCCC, including projections of future greenhouse gas emissions and removals by sinks
  • monitor and report on greenhouse gas emissions and sinks
  • help developing countries address climate change through financial assistance and technology transfer.

Parties to the UNFCCC are also required to consider actions to mitigate the impacts of climate change on small island countries, countries with low-lying coastal areas and countries with areas prone to natural disasters. New Zealand has a particular interest in advocating on behalf of vulnerable Pacific Island nations in this regard.

2.1.3 The Kyoto Protocol

When governments adopted the UNFCCC, they knew that its commitments would not be sufficient to seriously tackle climate change. At the first Conference of the Parties to the UNFCCC in March 1995, parties therefore launched a new round of talks to decide on stronger and more detailed commitments for industrialised countries. In 1997, the text of the Kyoto Protocol was adopted unanimously by the UNFCCC parties.

The Protocol sets targets for reductions in greenhouse gas emissions of Annex I Parties for CP1, which is 2008 to 2012. The combined emissions of Annex I Parties must be reduced to 5% below the level they were at in 1990. Developing countries are not required to reduce their emissions. The Protocol establishes an international emissions trading regime using emission units, requires Annex I Parties to adopt domestic measures to reduce emissions, and establishes reporting and compliance arrangements.

The Kyoto Protocol had to be signed and ratified by 55 countries (including those responsible for at least 55% of the developed world's 1990 carbon dioxide emissions) before it could enter into force. This was achieved after Russia ratified in late 2004, and the Protocol entered into force on 16 February 2005. A total of 156 countries and regional economic integration organisations have ratified the agreement, the United States and Australia being notable exceptions. New Zealand ratified on 19 December 2002. Only countries that ratify the Protocol are bound by it.

2.1.4 New Zealand obligations under the Protocol

Different countries have different emissions-reduction targets to achieve under CP1; ie, the period between 2008 and 2012 inclusive. New Zealand's CP1 target is to reduce its greenhouse gas emissions to the level they were at in 1990.

The Protocol establishes three “flexible mechanisms”: Joint Implementation, Clean Development Mechanism and International Emissions Trading. They are designed to assist developed countries in meeting their emissions targets at least cost. Under these flexible mechanisms, New Zealand has the opportunity to reduce emissions or increase greenhouse gas removals in other countries at a lower cost than might be possible through domestic measures in New Zealand, and use those emissions savings towards compliance with its target.

If New Zealand fails to reduce emissions to the target level, it will have a further opportunity to acquire sufficient Kyoto units through these flexibile mechanisms to make up the shortfall. Otherwise, the difference (plus a penalty) will be added to New Zealand’s targets in the second commitment period. The Kyoto Protocol envisages that consideration of subsequent commitments for Annex 1 Parties should begin in 2005.

As a party to the Protocol, New Zealand is also required to establish an emissions unit register for holding and transferring emission units, a national system for estimating anthropogenic emissions, and a means of estimating current domestic carbon stocks (such as in forests) and future carbon stock changes.

2.1.5 International plurilateral and bilateral agreements

A number of multi-party international agreements are seeking to address climate change outside the UNFCCC framework.

Group of 8

The G8 is made up of the governments of Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States, plus the European Union. The United Kingdom has nominated climate change as a key issue for focus during its presidency term of the G8 in the second half of 2005.

At the Gleneagles Summit in July 2005, the G8 plus five major developing countries issued a statement setting out their common purpose in tackling climate change, promoting clean energy and achieving sustainable development. All the G8 leaders agreed that climate change is happening now, that human activity is contributing to it, and that it could affect every part of the globe. They recognised that, globally, greenhouse gas emissions must slow, peak and then decline. They acknowledged that this will require leadership from the developed world and resolved to take urgent action to meet the challenges faced.

A Plan of Action on climate change was developed and involved a commitment to action in several areas, including:

  • promoting energy-efficient buildings and appliances
  • encouraging the development of cleaner and more efficient vehicles
  • supporting efforts to make the use of coal and other fossil fuels for electricity generation cleaner and accelerate the development of carbon sequestration technologies
  • promoting the continued development and commercialisation of renewable energy
  • supporting efforts to manage the impacts of climate change.

Asia-Pacific Partnership on Clean Development and Climate

Unveiled in July 2005, the Asia-Pacific Partnership on Clean Development and Climate is an agreement between the United States, Japan, Australia, China, India and South Korea to promote and enable the development, diffusion, deployment and transfer of existing and emerging cost-effective, cleaner technologies and practices. Unlike the Kyoto Protocol, the pact does not contain specific timeframes or enforcement provisions, but will aim to "promote economic growth while enabling significant reductions in greenhouse gas intensities”. Further details are expected to be fleshed out at a first ministerial meeting of the six founding members.  

New Zealand/Australia and New Zealand/United States bilateral agreements

New Zealand has established climate change partnerships with Australia and the United States to enhance dialogue and practical cooperation on climate change issues. The partnerships predominantly involve collaboration at an implementation level. Key areas of cooperation with Australia include agricultural emissions abatement, energy efficiency, engagement with business and local government and working with Pacific Island countries to address regional challenges posed by climate change. Key areas of cooperation with the United States include technology development, carbon accounting registries, climate change research in Antarctica and product and process standards.

2.1.6 The science of climate change and the role of the Intergovernmental Panel on Climate Change

Recognising the issue of potential global climate change, the World Meteorological Organisation (WMO) and the United Nations Environment Programme (UNEP) established the Intergovernmental Panel on Climate Change (IPCC) in 1988. It is open to all members of the United Nations and WMO.

The role of the IPCC is to assess the scientific, technical and socio-economic information relevant to understanding human-induced climate change, its potential impacts and options for adaptation and mitigation. It aims to provide comprehensive and unbiased scientific information to all governments as a basis for decision-making. Since its establishment, the IPCC has produced a series of scientific reports and technical guidance documents on greenhouse gas inventories, including a Summary for Policy Makers, which have become standard works of reference by policymakers, scientists, other experts and students.

One of the main outputs of the IPCC is a regular five- to six-yearly comprehensive assessment of current knowledge on the science of climate change, its impacts and adaptation options, and options to reduce net greenhouse gas emissions. The reports have tended to precede major international political decisions: the first assessment report in 1990 was followed by the signing of the UNFCCC in 1992, the second assessment report in 1995 was followed by agreement of the Kyoto Protocol in 1997, and the third assessment report in 2001 was followed by finalisation of the Kyoto Protocol rules and widespread ratification of the Protocol in 2002.

The fourth assessment report of the IPCC is currently in preparation and is due for completion and release in 2007.

In addition to regular assessment reports, the IPCC also produces so-called Special Reports on topics of scientific or technological interest, and Technical Papers that summarise specific issues. It further provides guidance on greenhouse gas inventory reporting and accounting at the request of the parties to the UNFCCC and Kyoto Protocol. The IPCC’s guidance and best-practice reports usually become binding methodologies for greenhouse gas reporting once they have been accepted by the Conference of the Parties of the UNFCCC and/or the meeting of the Parties under the Kyoto Protocol.

Scientific information on climate change impacts and related greenhouse gas emissions and concentrations

The IPCC assessment reports have shown an increasing certainty about the occurrence of climate change and its attribution to human activities and the impacts of climate change. The scientific and economic analysis of the likelihood of climate change and the potential impacts is extremely complex. It involves three key elements:

  • assumptions about future global greenhouse gas emissions
  • modelling of climate processes, which capture the relationship between greenhouse gas emissions, the concentration of gases in the atmosphere and the resulting changes in temperature, climate and sea level
  • the assessment of the impact of these changes on natural and human systems.

The IPCC has approached the issue of assumptions about future greenhouse gas emissions by projecting “business-as-usual emissions” [Business-as-usual means that no policies are implemented specifically to reduce greenhouse gas emissions. However, the scenarios do include policies that would result in emissions reductions as co-benefit to addressing other environmental, economic or social concerns (eg, reducing air pollution for health reasons, or developing renewable energy to reduce dependence on foreign oil).] through the use of global scenarios of socio-economic, political and technological change over the next 100 years, which are described in its Special Report on Emission Scenarios (SRES) (IPCC, 2000b). The emission projections are based on models from a number of independent research groups with a common set of drivers for population growth, economic development in industrialised and developing countries, and development and transfer of technologies. The scenarios describe the possible development of the world along four story lines towards either economic or environmental sustainability goals, and with a focus on either globalisation or regional identification. The IPCC has not associated probabilities with any of these scenarios or temperature increases, but described the complete set of scenarios as spanning the plausible range of future emissions, excluding only “disaster” or “surprise” business-as-usual scenarios.

An alternative approach is to explicitly model the effect of stabilising greenhouse gas concentrations on the global climate. The UNFCCC does not specify any level at which greenhouse gas concentrations should be stabilised. The IPCC therefore used, in addition to business-as-usual scenarios, a range of possible stabilisation scenarios ranging from CO2 concentrations from 450ppm to 1000ppm and also considering the effect of other greenhouse gases. [The presence of other greenhouse gases leads to additional warming that also needs to be taken into account when modelling the total effect of stabilising greenhouse gas concentrations on the climate.]

The IPCC explored the implications of these various emission scenarios for climate change and the associated risks in its Third Assessment Report (IPCC, 2001a-d), along with options and costs of reducing greenhouse gas emissions to achieve stabilisation of greenhouse gas concentrations at a range of levels.

The estimated temperature increase by the year 2100 associated with business-as-usual scenarios ranged from 1.4ºC to 5.8ºC above average temperatures in 1990. [The lowest and highest temperature projections are for the lowest emission scenario and the climate model with the weakest response, and the highest emission scenario and the climate model with the strongest response, respectively.] For business-as-usual scenarios, substantial further warming above these levels would be expected beyond 2100 (IPCC, 2001a, d; Hansen, 2005).

The IPCC identified five reasons for concern associated with the climate changes accompanying such projected temperature rises (IPCC, 2001b):

  • risks to unique and threatened systems, such as coral reefs and individual species
  • extreme climate events, such as changes in the frequency and intensity of droughts, heat waves, floods and storms
  • global distribution of impacts; ie, whether only some or most regions of the world would be negatively affected by warming
  • aggregate impacts; ie, the overall economic and/or social impacts, and the total number of people negatively affected
  • the risk of large-scale and possibly irreversible shifts in the climate system, such as a sudden shift in ocean circulations or melting of ice sheets.

In light of the subjective judgements required to define “dangerous” climate change, the IPCC did not suggest a specific level of warming that might need to be avoided, but limited itself to outlining the identified risks for different levels of climate change that could occur during the 21st century under different emission scenarios. The risks generally increase with higher levels of global warming and with the rate of the warming (IPCC, 2001a, b, d).

Recent additional scientific studies and findings

Substantial scientific work over the past five to six years, following on from the IPCC’s last major report, has focused on providing a clearer sense of possible thresholds, to associate major changes in particular ecosystems such as coral reefs to specific degrees of warming, and to better quantify the risk of large-scale changes for any given amount of warming.

A number of recent studies suggest that warming of a few degrees above current levels would lead to clearly identifiable negative impacts for specific ecosystems or regions, including increasing risks of globally significant and possibly irreversible impacts such as changes in ocean circulations and melting of polar ice caps. Examples of such larger-scale and high-impact events with non-negligible probability are outlined below:

  • current evidence suggests that a shut-down of the thermohaline circulation during the 21st century may have a probability of between about 5% and 60%, depending on the rate and magnitude of warming and the ocean circulation model. A rapid reduction or even shut-down of the thermohaline circulation would affect the climate and ecosystems in northern Europe, particularly during winter (Vellinga and Wood, 2002; NRC, 2002; ISSC, 2005)
  • there is increasing evidence about the vulnerability of the Greenland ice sheet to even modest amounts of warming. A number of studies suggest that irreversible melting, albeit over hundreds to thousands of years, may occur for global warming levels of about 1.5ºC to 2ºC or more above 1990 levels. Melting of the Greenland ice cap would lead to an additional global sea-level rise of up to 7 metres (IPCC, 2001a; Gregory et al, 2004; Hadley, 2005; ISSC, 2005)
  • a study of the current and projected impacts of climate change on the Arctic region, supported by the eight countries with Arctic territories, found that the climate changes already being observed in the Arctic are among the largest on Earth, and are projected to become much greater in future. The changes are expected to have a profound impact on unique individual species, ecosystems, and human societies in the Arctic region. Major changes in the Arctic climate, and resulting changes in snow and ice cover, are also expected to have global effects (ACIA, 2004).

A recent expert symposium summarised that “surveys of the literature suggest increasing damage if the globe warms about 1ºC to 3ºC above current levels. Serious risk of large scale, irreversible system disruption, such as reversal of the land carbon sink and possible destabilisation of the Antarctic ice sheets, is more likely above 3ºC.” (ISSC, 2005).  

Stabilisation of greenhouse gas concentrations to meet possible temperature targets

Given such possible effects of different levels of warming, a key scientific question is what concentrations of greenhouse gases would lead to what degrees of warming in the long term. Answers to this question are complicated by two factors:

  • climate models cannot predict with certainty how much the world will warm for a given level of greenhouse gas concentrations, but can only give a range of probabilities for a range of temperature outcomes
  • temperature and, in particular, sea level will continue to rise for hundreds to thousands of years after greenhouse gas concentrations have stabilised due to the inertia of the climate system.

Current climate model studies suggest that if CO2 concentrations were stabilised during the 21st century at 450ppm, the world would warm by about 1.2ºC to 2.4ºC above current levels by 2100, but could warm between 1.5ºC and 3.9ºC above current levels over the next several hundred years. Higher concentrations of greenhouse gases would lead to a higher probability that any given temperature level may be exceeded (IPCC, 2001d; den Elzen and Meinshausen, 2005; ISSC, 2005).

Issues around the analysis of climate change and its impacts

There is growing international consensus around the science of climate change, with the IPCC reports and methodologies generally deemed to be the most authoritative and comprehensive summaries of current knowledge. A large number of independent scientific bodies have expressed their confidence and support for the processes and scientific findings of the IPCC, including the Royal Society of New Zealand and the United States National Academy of Sciences (Science, 2001; NAS, 2001). The IPCC’s peer review processes and the balance of representation of experts across countries and relevant areas of expertise contribute to the credibility of its work. In areas where there is no clear scientific agreement, the IPCC generally describes the different approaches or models and their differing answers, or describes the range of uncertainty associated with specific projections.

In some areas, there is ongoing debate within both the scientific and policy communities about the extent to which sound conclusions can be drawn from the currently available scientific evidence. These areas include the extent to which the full impacts of climate change and their costs can currently be estimated and the extent to which the IPCC’s business-as-usual emission scenarios span the full range of possible and plausible future emissions. In particular, in recent years there has been significant international discussion on whether the assumptions and methodologies underlying the scenarios for population and economic growth, especially in developing countries, and technology development and transfer are robust.

Aspects of these issues were recently considered as part of an inquiry by the House of Lords in the United Kingdom on the economics of climate change. In its report, the House of Lords highlighted the continued elements of debate around aspects of climate change and expressed concern about a number of aspects of the IPCC analysis and processes, including identifying the need for the links between projected economic change in the world economy and climate change to be more rigorously explored and the need for more rigorous assessment of particular impacts.

The continued debate around scientific and economic analysis of climate change points to the need for New Zealand to continue to engage in international processes to encourage objective and robust assessment of climate change, its impacts and adaptation and mitigation options, and to ensure the New Zealand-specific expertise and information is reflected in IPCC reports. New Zealand scientists are routinely contributing to IPCC reports as authors and reviewers. In addition, the New Zealand Treasury, along with a number of OECD countries, is sponsoring a workshop to be held by the OECD in January 2006, which will consider aspects of economic methodologies underpinning business-as-usual emission scenarios.

Advances in climate science and their impacts, and economic modelling of the costs of impacts and mitigation options, can be expected to reduce the uncertainties associated with climate change projections and responses. However, for the foreseeable future, policy choices will need to continue to be made in a risk management framework that deals with uncertainties and probabilities, rather than absolute predictions about concrete climate events. [This situation can be compared with managing the risk of, for example, aircraft engine failure. Engineering cannot predict a specific date and time at which a plane’s engines will fail. It can only provide probabilities for a failure to occur at any given time. Governments, airlines and passengers have to decide at what point the risk of failure outweighs the benefits of operating planes and of more stringent safety controls.]