New Zealand has limited low-cost options to cut its greenhouse gas emissions and is likely to need access to an international carbon market in order to meet ambitious post-2020 emission targets, the government said Thursday.

The Ministry for Environment made the point as it launched a public consultation on how to calculate its INDC ahead of December’s crucial UN climate conference in Paris.

“We are likely to need international carbon market access to help meet our target,” the consultation document said.

“Our modelling suggests that meeting targets solely through domestic emissions reductions will increase the cost. This means that it will be important to secure the use of carbon markets in the new agreement.”

The document did not outline potential targets for New Zealand beyond stating that it is expected to deepen its current commitment of cutting GHGs to 5% below 1990 levels by 2020.

It did stress, however, that the target must be affordable, and argued that New Zealand has fewer low-cost options to cut emissions than most other developed countries because 48% of its emissions is from agriculture and its electricity generation is already 90% renewable.

“For the same level of cost as the European Union’s target, New Zealand’s target would be approximately 10 to 20 per cent above 1990 levels,” it said.

Some observers say NZ might struggle to meet its 2020 target because a lot of forests planted in the 1990s are maturing and due to be harvested over the next decade, which will further push New Zealand’s emissions up and make an ambitious 2030 target less tempting for lawmakers.

“Increasing our commitment after 2020 will be a big challenge … The easy gains have already been made. But we are expected to make a fair contribution to combating this global problem,” Climate Change Minister Tim Groser said.

But Russell Norman, co-leader of the Greens, criticised the approach

“The Government’s consultation document is seriously flawed. It treats action on climate change as a cost, whereas, in fact, failure to take action is actually the cost,” he said in a statement.

“The Government’s discussion document tries to paint them as victims of a unique set of circumstances outside of their control, as opposed to being the actual authors of the policies that have led to massive emissions increases.”

Meanwhile, emitters covered by the New Zealand ETS have relied almost exclusively on UN offsets to meet their targets, which has led to an effective carbon price of less than 5 cents. But as of this year, New Zealand has lost access to the UN market because it did not sign up to a second Kyoto period.

“This year we will start to consider how the current settings under the New Zealand Emissions Trading Scheme are placed to deliver on our target,” the INDC consultation document said.

The consultation closes on June 3.

By Stian Reklev – stian@carbon-pulse.com