New Zealand will use over 30 million Kyoto units from its massive surplus from the 2008-2012 period to meet its 2020 emissions target, the Ministry for the Environment said Thursday.
Climate Change Minister Paula Bennett on Thursday released three reports showing that New Zealand had met its Kyoto Protocol first commitment period goal, carrying a surplus of 123.7 million Kyoto units with it for future use.
“New Zealand’s second biennial report to the United Nations shows that we met our target for the period from 2008-2012 through a combination of emissions reductions, carbon removal by forests, and international trading,” Bennett said.
Almost the entire surplus comes from the 121.5 million ERUs, CERs and RMUs New Zealand emitters have bought overseas from 2010-2014 to comply with the emissions trading scheme, most of them at prices below NZ$0.15 each ($0.10, €0.09).
In Thursday’s update on New Zealand’s net 2020 position, the environment ministry estimates that around a quarter of the surplus – some 30.3 million – will be required to help meet the target of cutting GHG emissions to 5% below 1990 levels by 2020.
NZ expects its emissions over 2013-2020 to total 656.3 million tonnes of CO2e, compared to its target of 516.7 million tonnes, suggesting that output is set to continue increasing for the rest of the decade.
It expects to store around 110 million tonnes of CO2e in forest sinks over the period, leaving the Kyoto units to fill the remainder of the gap.
New Zealand plans to use the Kyoto units despite not signing up for the Protocol’s second commitment period. Instead it has written its 2020 target under the climate convention itself, meaning the target is not legally binding.
As a result, the country is no longer eligible to participate in international emissions trading, but is free to use its surplus in domestic accounting.
And while five EU nations last week cancelled their Kyoto surplus of more than 600 million units, New Zealand and neighbouring Australia have declined to do so.
Meanwhile, the government estimated that carbon storage through forest sinks would continue to rise until 2017 despite declining levels in forest-planting in recent years.
“The introduction of the NZ ETS and an NZU price of $15-$20 temporarily (until 2012) created an increased incentive for afforestation. However, the carbon price has since fallen and present afforestation rates are lower,” the government said in last month’s ETS review paper.
“For pre-1990 forests, ongoing deforestation of approximately 3000–5000 hectares per year is expected to continue if the carbon price remains at current levels, all other things being equal.”
The 2020 net position paper released Thursday appeared to underpin the government’s aim to boost the domestic carbon price through its review of the ETS, the announcement of which has caused NZU prices to rise to NZ$9.25, their highest level since Jan. 2012.
By Stian Reklev – email@example.com