New Zealand and the Kyoto Protocol

In October 2004 the Kyoto Protocol all but officially came into effect for New Zealand and over one hundred other countries when Russia’s Duma emphatically voted in favour of ratification. The effect that Russia’s participation will have on the Kyoto Protocol will arguably turn environmental policy development in New Zealand and other countries on its head. The primary goal of the Kyoto Protocol is to protect the climate for future generations. The idea is that developed countries and high-tech industry are to lead the way by taking a greater share of responsibility for reducing greenhouse gas emissions thus allowing developing countries more leeway to meet their development goals. As a signatory to the Kyoto Protocol, New Zealand has undertaken a certain degree of responsibility that will affect various areas of the New Zealand way of life. So if the purpose of this undertaking is to protect the climate for future generations how will New Zealand contribute to its fulfilment? What is the prevention of climate change worth to New Zealand? How will the policies developed by New Zealand to meet these obligations affect people? Is it fair to expect some industries to take a greater responsibility? Why?
This essay argues that the prevention of climate change is important to all people and therefore everyone must contribute. The ideology of the Kyoto Protocol is good and the spirit behind it is promising, but the actual emissions targets and bureaucracy that has resulted will not be adequate to meet the lofty goal of protecting the climate for future generations. Although it is an important first step, it must lead to many more steps before reaching the goal of preventing climate change. More specific to New Zealand is the problem of developing policy to meet our obligations. New Zealand’s unique geography and economy create particularly difficult challenges for environmental management. As a relatively small island nation that depends on an equable climate for electricity and export revenue New Zealand has a lot to lose from the predicted effects of climate change, but as a developed country New Zealand also has a lot to pay for under the Kyoto Protocol. The policies that have been developed thus far arguably show that the government does not acknowledge the source of the greatest increase of greenhouse gases since 1990. This has implications for compliance to the Kyoto Protocol and New Zealand’s economy.
Before answering the above questions, the exact goals of the Kyoto Protocol and the reasoning behind them must be defined. The Kyoto Protocol came as a result of the United Nations Framework Convention on Climate Change, which was created at the 1992 Earth Summit in Rio de Janeiro. The point of the Framework Convention was to set about stabilising the concentration of greenhouse gases in the atmosphere thus preventing anthropogenic climate change(1). Although the Framework Convention was almost universally ratified, its goal was not going to be met without a more specific agreement. The result of this was the Kyoto Protocol. The objectives and principles of the Kyoto Protocol identified by the New Zealand government are as follows. Firstly the climate system should be protected for future generations. Following this, developed countries are expected to take the leading role in preventing climate change by setting and achieving quantified emission targets within a specific time frame while commitments for developing countries will not be immediately introduced. Secondly, parties to the Protocol are to anticipate the causes of climate change and take precautionary measures to prevent, or minimise the effects. Thirdly, each party should integrate the appropriate measures and policies to prevent climate change into their national development programmes. Finally the share of developing countries’ greenhouse gas emissions (GHGs) will grow in relation to that of developed countries’ as the developing countries meet their development goals (2). To achieve these goals while still allowing flexibility for sovereign countries to develop their own policy, the Kyoto Protocol is riddled with complexities of which only those immediately relevant to New Zealand will be discussed.
It had already been decided in the FCCC that the way to protect the climate for future generations was to stabilise the concentration of greenhouse gases in the atmosphere. In aiming to reach that goal the Kyoto Protocol began modestly by aiming to reduce GHG emissions to 1990 levels by 2008-2012(3). Even though this in itself will not prevent climate change it is recognised that it is an important first step that will be built on (4). The idea that the Kyoto Protocol is merely a first step will gain relevance in the discussion once New Zealand’s place in the emissions trading scheme is discussed.
To begin the discussion on New Zealand’s obligations to the Kyoto Protocol, why should New Zealand support such an agreement? One might argue that because New Zealand is clearly responsible for such a small percentage of greenhouse gas emissions the Kyoto Protocol is not ‘for’ New Zealand, but rather for larger countries in North America, Europe, and Asia. This point of view ignores the fact that North America, Europe, Asia, and New Zealand all share the same atmosphere. Peter Singer argues that industrialised countries opposed to the Kyoto Protocol oppose it from a “flagrantly self-serving position” because not only are most developed countries in a better position to cope with climate change, but coming from a purely economic point of view there appears to be nothing to be gained from spending money on preventing climate change (5). However there has already been enough scientific data collated to show that New Zealand, which relies on an equable climate for export income and electricity generation, will be greatly affected by climate change. The concrete data from recent years shows almost half a degree increase in mean temperature over the past century (6). Jim Salinger of the New Zealand Meteorological Service argues that New Zealand’s climate has varied somewhat in the past and will continue to vary in the future. But accelerated and more extreme climate change caused by greenhouse gases will most likely change the predominant air-flows over New Zealand resulting in drier weather for some and wetter weather for others. (It is not entirely predictable which areas will be affected and how.) Salinger also predicts a likely increase in extreme weather events (7).
The effects changing rain patterns will have an impact on one of New Zealand’s most important industries, agriculture. Dr Anton Meister of Massey University points out that a loss of agriculture in one region in New Zealand might be cancelled out by an increase in agriculture in another is a somewhat simplistic point of view (8). Such a view does not take into account the effects of an extreme weather event such as the February 2004 floods in the lower North Island and the immediate impact that crop failure and property destruction has on an economy. The notion that agriculture will be worst affected by climate change is backed up by a report into the predicted effects of climate change on agriculture in New Zealand. The report was commissioned as part of the Ministry for the Environment’s Climate Change Programme. The report predicts that in the next fifty years Hayward Kiwifruit (the most common variety of Kiwifruit) will become economically unsustainable in the Bay of Plenty and apple production in Nelson and Hawke’s Bay will be adversely affected by water shortages (9).
Meister also points out that other sectors that are important to New Zealand such as tourism (with a reliance on sunshine or snow), or hydro-electricity (with a reliance on rain and snow in the Southern Alps) will be affected (10). Having seen how important the climate is to New Zealand, even if it does not count itself as part of the problem of global warming, it is in New Zealand’s interests to be part of the solution.
There was general public satisfaction during the initial consultation process in 2001 that the Kyoto Protocol would be a good thing for New Zealand. The minority that opposed the idea of ratifying the Kyoto Protocol feared that the policies developed to meet the obligations of the protocol would affect New Zealand’s economic competitiveness (11). The disadvantages that the opponents foresaw were primarily economic because it was evident at the time that some of New Zealand’s key competitors would not be encumbered with the same obligations as New Zealand would (12). However the opposition was somewhat muted because to a large extent the effect that the Kyoto Protocol would have on New Zealand’s economy depended on what policies the government developed to meet its obligations (13). Moreover, as was earlier discussed, it is in New Zealand’s interests to avoid climate change because of local geography and a reliance on income from primary exports.
Given that the success of the Kyoto Protocol in New Zealand depends entirely on the government’s policies, what are the government’s policies and how successful will they be? One of the most important criticisms of the measures that the New Zealand government has taken to fulfil its obligations to the Kyoto Protocol is that the industries that the government targeted with proposed levies on emissions are not responsible for the increase in greenhouse gas emissions since 1990. Meanwhile the government continues to encourage the industries that are responsible for the increase in GHG emissions. A good example is the case of levies on ruminant livestock, even though the policy was abandoned before implementation it serves to demonstrate how the New Zealand government has failed to acknowledge where the biggest increase in GHG emissions is coming from. The fact that currently 60 per cent of New Zealand’s greenhouse gas emissions is methane, most of which comes from agriculture, is largely irrelevant to New Zealand’s obligations to the Kyoto Protocol (14). It is irrelevant because of the way that the targets for GHG emissions were set. The target is to reduce emissions to 1990 levels but for New Zealand the increase in GHG emissions since 1990 has come mostly from growth in energy use and transport (15). Not only that but the methods of measuring methane emissions are so primitive that there is a 50 per cent uncertainty in the figures for methane emissions given in Ministry of Economic Development reports as opposed to only a five per cent uncertainty for carbon dioxide emissions (16). So for 60 per cent of New Zealand’s greenhouse gas emissions the uncertainty is 50 percent, this means that New Zealand’s GHG emissions total has a significant uncertainty. Not only is this a problem when suggestions for such things as levies on ruminant livestock are considered but more importantly it means that during the 2008-2012 commitment period New Zealand could end up being ‘over-charged’ or ‘under-charged’ on greenhouse gas emissions.
New Zealand’s obligations in the first commitment period (2008-2012) are specifically to reduce GHG emissions to 1990 levels, which is an estimated decrease of 34 million tonnes of carbon dioxide equivalent GHGs from 2000 levels (17). This obligation can be meet by trading carbon sinks from land use change to compensate. (This is a flexibility mechanism of the Kyoto Protocol that is discussed below.) For New Zealand this is easy because it is estimated that because of changes land use and an increase in forestry New Zealand will have up to 100 million tonnes of ‘credit’ (18). However that does not mean that New Zealand should ignore the need to decrease emissions. This situation is the result of one of the Kyoto Protocol’s most controversial flexibility mechanisms. As we have seen, countries are allocated a quota for emissions during the commitment period. This is expressed in terms of emissions in 1990. (Therefore New Zealand’s quota is equal to its emissions in 1990). The flexibility mechanism in question for New Zealand is that of counting new carbon ‘sinks’ against ‘sources’. Human induced reforestation creates sinks (19). In New Zealand’s case, the new forests that are counted as sinks are in fact vast blocks of pine. There are various problems with relying on this for compliance to the Kyoto Protocol.
All parties to the Kyoto Protocol recognise that the first commitment period is merely a small first step to achieve the desired effect of stabilising the concentration of GHGs in the atmosphere, this must result in drastic cuts in GHG emissions. So even though New Zealand may be able to meet its obligations for the first commitment period comfortably it would be wise to develop policy now to change the behaviour of New Zealand’s GHG emitters for two reasons. Firstly, the scientific uncertainty surrounding the carbon sink and emissions trading scheme means that although a country like New Zealand might seem to be in an advantageous position now, a development in the science of measuring carbon sinks might change that. Such an event could have disastrous results for countries aiming to comply by counting sinks against emissions. Secondly by counting land use change against an increase of electricity production by archaic means such as coal, New Zealand demonstrates no behavioural change that will aid compliance to subsequent commitments to the Kyoto Protocol. The advantage of land use change is only temporary because once a pine plantation matures it will be cut down and become a source rather than a sink. Not only that, but the future of flexibility mechanisms is limited because negotiations for subsequent commitment periods are certain to produce more stringent requirements.
The flexibility mechanisms that underpin the emission-trading scheme are the only measure that many countries can use to comply with the Kyoto Protocol’s first commitment period. The reason for this is the relatively short time between ratification and commitment period, which allows only minimal behavioural change in industry (20). While this will get countries to the first commitment period, if any country is serious about preventing global warming they will look to institute a behavioural change to decrease GHG emissions, something that the emission-trading scheme will discourage in the first commitment period. David Victor argues that the main problem with emission trading is the huge amount of credits that were allocated to Russia and the Ukraine (21). So many of Russia’s credits are on the market because thanks to the break-up of the Soviet Union and the subsequent collapse of the Russian economy. It is impossible for Russia to reach the level of GHG emissions that it put out in 1990 before the 2008-2012 commitment period; therefore Russia has many millions of dollars to gain from selling credits (22). The result is that countries such as the USA can literally buy compliance to the Kyoto Protocol – probably for much cheaper than actual abatement.
The implication that this has for New Zealand is that after the first commitment period emission trading might well be seen for the farce that it is. A foreseeable response when subsequent commitment periods are negotiated (beginning in 2005) will be that targets should be met by actually decreasing GHG emissions, thus discarding flexibility mechanisms and ending the emission-trading scheme. The point here is that sooner rather than later New Zealand must seek to comply with the Kyoto Protocol by decreasing emissions – such a strategy would also be more fitting to the spirit of the Protocol than counting new exotic timber plantations against an increase in GHG emissions.
The main problem for New Zealand is arguably the increase in carbon dioxide emissions rather than the other greenhouse gases such as methane. Although we have seen that methane accounts for such a large proportion of New Zealand’s GHG emissions, it is decreasing in proportion to carbon dioxide. In his book Burning Issues, Alexander Gillespie focuses on carbon dioxide as the biggest problem because of the fact that carbon dioxide emissions consistently increased in quantity and proportion during the 1990’s (23). At the time of writing (1997) Gillespie attributed 77 per cent of that increase to the transport sector (24). Since then electricity generation has caught up with transport as a major source of increased carbon dioxide emissions. Gillespie says that the problem seems to be the proliferation of second hand imported petrol cars and the inefficient use thereof. An incredible 85 per cent of passenger movement is by car as opposed to nine per cent by bus (25). In light of this surely the increase of carbon dioxide emissions from transport should be near the top of the government’s agenda. In a later section the government’s response to the increase in GHG emissions by transport will be discussed.
Along with transport, the energy sector is also a major source of the increase in carbon dioxide emissions. Together, the transport and energy sectors are responsible for almost all of the 40 per cent increase in carbon dioxide emissions between 1990 and 2003 (26). This in itself is a poor statistic, but it would have been even worse if the Methanex plant in Taranaki had not cut its methanol and synthetic petrol production in 1997 (27). Perhaps the biggest factor contributing to the increase of GHG emissions in the energy sector is the increase of coal use at the Huntly power station (28). The increase in coal use accounted more of the increase in carbon dioxide emissions than anything else, so the question is, why is coal being burnt more now than ever before?
The power station at Huntly now burns more coal than ever simply because it was always expected to. The Huntly power station was actually put forward in the 1970s as an alternative to a proposed nuclear power station that would have been built north of Auckland (29). According to a pamphlet published by the Ministry of Energy to inform the public of the new station at Huntly the station was to be fired mostly by gas in the early years and then would revert to coal once the supply of gas dwindled (30). As it happened the gas lasted until after 1990 and now, only a few years before the first commitment period, coal is beginning to take its place. This has huge implications for New Zealand’s compliance to the Kyoto Protocol.
As the total amount of energy generated in New Zealand increases, the proportion of energy generated by fossil fuels is growing, albeit slowly. While the total amount of electricity generated increased 15 per cent between 1988 and 1998, the proportion generated by fossil fuels increased from 21 per cent to 27 per cent (31). Of the electricity generated by fossil fuels, coal is supplanting gas as the major fuel (accounting for the huge increase in coal consumption mentioned earlier) (32). The problem with this is that when coal is burnt it emits more than twice as much carbon as gas does, making it the worst of all the fossil fuels (33). This explains the large percentage of the increase of carbon dioxide emissions that the energy sector is responsible for.
Having established that in the long term compliance to the Kyoto Protocol depends on actually reducing greenhouse gas emissions, and having seen where the greatest increases in greenhouse gas emissions are originating from, how is the government responding? Government web-sites display some interesting information in the form of suggestions for the public to save electricity, car-pool, and organise walking-buses for school children. But could such an effort by the public reduce surplus greenhouse gas emissions by the estimated 34 million tonnes? Having now discussed the sources of greenhouse gases in New Zealand and discussed which sources are producing the greatest increase, the government’s strategy for compliance will now be discussed by focusing on the two most relevant areas, transport and electricity.
Following the earlier discussion of coal use in electricity generation, it is only fair to point out that although the increase in coal use has resulted in a huge percentage increase in carbon dioxide emissions from coal, at this stage coal still makes up a rather small percentage of total electricity generation. This is because gas is still being used to a large extent in thermal electricity generation (34). By 2025 however, the government estimates that coal will be the predominant fuel in thermal electricity generation (35). It seems quite contradictory to plan to increase coal use on one hand and commit to the Kyoto Protocol on the other, especially since the felicitous prospect of higher than projected GDP growth would require still more coal use (36). So how exactly is the government planning to reduce the problem?
The Energy Efficiency and Conservation Authority (EECA) was set up in 2001 to promote renewable energy and energy efficiency. Some of the areas that the EECA has focused in on are building design, transport, and energy. One of the most important of these areas is transport because transport is responsible for so much of the increase in carbon dioxide emissions and it is an area where the EECA acknowledges there is much room for improvement (37). However the EECA’s draft strategy claims that even though there is so much potential for improvement, any measures taken will not help New Zealand comply to the Kyoto Protocol because they have very long ‘lead times’ (38). This may be so, but three years after the report was published there is little evidence that proposed measures will be implemented. One measure that the draft strategy promotes is the use of hydrogen fuel cells to replace fossil fuels. Hydrogen cells are currently being tried on a small scale in some US states and Iceland. While this technology is still expensive and inefficient, if perfected it might result in a proliferation of low emission vehicles (39).
Another area that the EECA focuses on is buildings, or more specifically, energy use in buildings. A discussion of residential energy needs is overshadowed by the fact that residential energy needs are not growing as fast as the energy needs of transport and overall electricity generation (40). However, an interesting aspect of residential energy use is that a very low percentage of carbon dioxide emissions come from home use (41). Homes generally use electricity only for space and water heating. While in many urban areas air pollution must be taken into account, it is more efficient to use fossil fuels to directly heat homes than using fossil fuels to generate electricity to heat homes because so much energy is wasted in generation and transmission.
To conclude, given the evidence of climate change and its predicted effects, there is a lot at stake for New Zealand’s future, which depends on the success of the Kyoto Protocol and its lofty goal: To protect the climate for future generations. New Zealand has even more at stake than other developed countries because in New Zealand the environment determines the state of the economy through its effects on agriculture and tourism. Because of New Zealand’s small size it may seem that there is little we can do. But as this essay shows, one of the most important aspects of preventing climate change is behavioural change. Behavioural change is exactly what the government is aiming at in its strategy for compliance to the Kyoto Protocol, and yet there is clearly more to it than that. Behavioural changes such as walking buses for children and short showers must be accompanied by structural change that correctly identifies where the increase in GHG emissions is coming from. Instead of squandering natural gas for inefficient electricity generation or synthetic petrol production it should be used to directly heat homes. Instead of following ill-conceived plans from the 1970s, the Huntly power station ought to be pulled down and its generation capacity replaced by some form of renewable energy such as geothermal or wind. These changes should be made before New Zealanders are asked to turn their lights off and have cold showers, and before ruminant livestock are levied for their flatulence – otherwise the goals of the Kyoto Protocol will not be realised and New Zealand will pay a high price for failure.

Notes:
1) Ministy for the Environment, 2002, National Interest Analysis: Kyoto Protocol to the UN Convention on Climate Change, p.13.
2)Ibid, pp.14, 15.
3)Grubb, Michael, with Christiaan Vrolijk and Duncan Brack, The Kyoto Protocol: A Guide and Assessment, Royal Institute of International Affairs, London, 1999, pp.70, 71.
4)Ibid, p. xxxiii.
5)Singer, Peter, One World: The Ethics of Globalisation, Yale University Press, New Haven, 2002, pp.17, 25, 50.
6)Salinger, Jim, “Accelerated Climate Change.” In Human Dynamics of Climate Change in New Zealand: Research Needs and Strategies, Joint Symposium between the SSRFC and the University of Waikato, Hamilton, 4,5 November 1988, Ch 3.
7)Ibid
8)Meister, Anton, “Climate Change in New Zealand: Economic Impact Analysis in Resource Allocation.” In Human Dynamics of Climate Change in New Zealand: Research Needs and Strategies, Ch 6.
9)Ministry for the Environment, September 2001, Climate Change: Likely Impacts on New Zealand Agriculture, p.22.
10)Ibid
11)Ministry for the Environment, 2002, p.8, 9.
12) Ibid, pp.10, 11.
13)Ibid, p.11.
14)Ibid, p.18.
15)Ibid
16)Ministry of Economic Development, 2004, New Zealand Energy Greenhouse Gas Emissions 1990-2003, p.107.
17)Controller and Auditor General. Meeting International Environmental Obligations, 2001, p.89.
18)Ibid
19)Hahn, Robert W. and Robert N. Stavins, What has the Kyoto Protocol Wrought? AEI Press, Washington D.C, 1999, p.5.
20)Victor, David, The Collapse of the Kyoto Protocol and the Struggle to Slow Global Warming, Princeton University Press, Princeton, 2001, pp.109, 110.
21)Ibid, pp.9, 10.
22)Ibid
23)Gillespie, Alexander, Burning Issues: The Failure of the New Zealand Response to Climatic Change, The Dunmore Press, Palmerston North, 1997, p.76.
24)Ibid, p.95.
25)Ibid, p.102.
26)Ministry of Economic Development, 2004, p.1.
27)Ibid, p.2.
28)Ibid
29)Ministry of Energy, Electricity Division, 1982, Huntly Power Station.
30)Ibid
31)Goldthorpe, Steve, “Greenhouse Gas Mitigation from Coal-fired Power Generation in New Zealand.” In 8th New Zealand Coal Conference, Coal Research, Wellington, 1999, p.147.
32)Ibid
33)Ibid, p.148.
34)Ministry of Economic Development, October 2003, New Zealand Energy Outlook to 2025, p.5.
35)Ibid, p.31.
36)Ibid, p.47.
37)Ibid, p.46.
38)EECA, 2001, Draft National Energy and Conservation Strategy, p.21.
39)Ibid. p.22. Note: The product of Hydrogen and Oxygen is water vapour, although this is also a type of greenhouse gas, water vapour is no where near as effective as other GHGs.
40)Ministry of Economic Development, October 2003, p.31.
41)Ibid