The air we breathe: Eventually, our rising carbon emissions will cost us dearly

As our targets for reducing emissions get tougher, the potential cost of failure becomes more serious.

As our targets for reducing emissions get tougher, the potential cost of failure becomes more serious.

In part four of our 'Air We Breathe' series, Michael Daly reports on the alarming future cost of New Zealand's greenhouse gas emissions.

New Zealand's greenhouse gas output keeps increasing but the Government seems to have no doubt we will meet our 2020 target of "reducing emissions to 5 per cent below 1990 levels".

The solution is a combination of growing trees and things called Kyoto Protocol units, enabling us to report reduced net emissions at the same time as actual gross emissions keep rising. 

But meeting our emission obligations in the future may become more painful, with concerns the cost to taxpayers could be up to $7.5 billion during the 2020s.

IMPROVING, WHILE GOING BACKWARDS

Worldwide, far and away the main greenhouse gas is carbon dioxide, with the next two most important being methane and nitrous oxide.

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Facts source: New Zealand's Greenhouse Gas Inventory 1990-2014 Snapshot published by the Ministry for the Environment in May 2016

On a global scale there seems to be some good news on the CO2 front. According to the European Commission (EC), global CO2 emissions from fossil fuels and industrial processes stalled in 2015, confirming a slowing trend seen since 2012.

That was a result of structural changes to the global economy, energy efficiency and changing energy mixes in key countries.

But even with CO2 emissions flat lining, the amount of CO2 in the atmosphere has apparently kept increasing because, according to the University of East Anglia, warm temperatures in 2015 and 2016 meant less CO2 was absorbed by trees.

Latest information about the whole basket of greenhouse gases is a few years older. According to the EC, worldwide they rose 7 per cent between 2007 and 2012.

Country rankings

Drag the countries into the order of best to worst performing in greehouse emissions per person, then check your answers.

  1. Australia
  2. Brazil
  3. Canada
  4. China
  5. Germany
  6. Italy
  7. Japan
  8. New Zealand
  9. United Kingdom
  10. United States
Check answers
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* Tonnes of greehouse gasses per person (2012)
Ranking source: The World Bank

NZ RANKING

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Based on EC figures, New Zealand ranks 19th in the world for greenhouse gas emissions per person, with each one of us responsible for 17.7 tonnes of CO2-equivalent emissions in 2012.

A report for the United Nations Framework Convention on Climate Change prepared by the Ministry for the Environment (MfE) said New Zealand had gross greenhouse gas (GHG) emissions of 81,104 kilotonnes in 2014.

That was 1 per cent higher than the year before, and up 23 per cent since 1990.

NOT LIKE THE OTHERS

The make-up of New Zealand's greenhouse gas emissions is quite different to that of the world as a whole, as are the sources of those gases.

In 2010, CO2 made up about 76 per cent of global GHG, with 16 per cent from methane (CH4) and 6 per cent from nitrous oxide (N2O). 

In contrast, CO2 makes up 43.9 per cent of New Zealand's gross GHG emissions, methane 42.9 per cent - mostly from agriculture - and N2O 11.2 per cent - again mostly from agriculture.

Given the unusual make-up of our GHG emissions, it is no surprise sources of the emissions are also unlike the world as a whole.

In New Zealand in 2014, 48.8 per cent of gross GHG emissions came from agriculture, and 39.8 per cent came from energy - which includes manufacturing, electricity production, and transportation fuels.

Worldwide in 2010, the energy sector was responsible for 68 per cent of GHG emissions, and agriculture 11 per cent.

THE PROBLEM WITH NO SOLUTION

So agricultural emissions are the big challenge for New Zealand and so far no one has found much of a solution. As a result, late in 2015 the Government said agriculture would continue to have the benefit of not having to pay for its greenhouse gas emissions. It had no idea when that might change.

As Westpac noted, the exclusion of agriculture placed the financial burden of reducing emissions on the other half of emitters, and the costs of growing emissions from agriculture on the taxpayer.

CARBON MATHEMATICS

The second international commitment period for GHG emissions is now under way.

In the first from 2008-2012 New Zealand's target was to keep emissions at 1990 levels. That was a total of 309.6 million tonnes of CO2-equivalent (Mt CO2-e) for the five-year period - worked out by multiplying 1990 emissions of 61.9 Mt CO2-e by five.

Our total gross emissions for the period were 372.8 Mt CO2-e, but we were able to meet the 309.6m target, essentially because forestry activities were estimated to have removed 71.6 Mt CO2-e.

UNIT TITLES

We also further improved our record by accumulating Kyoto units.

At the start of each commitment period, countries get one unit for each tonne of CO2-e in their target. More units come in from emitters, who get them by buying them from businesses with a surplus - such as forest owners - or from the Government. Forest owners also have to surrender units for deforestation.

In the early years of the scheme, units could also be bought from overseas. Some of the overseas units were dubious and very cheap.

In the 2008-2012 period, we had 122.9m Kyoto units.

The result was that after meeting our obligations - even though our gross emissions had actually increased - we had 123.7m units left over to go towards future obligations.

GOING AROUND AGAIN

These units may well be crucial in meeting our commitments in the second period, which started in 2013 and ends in 2020.

New Zealand's aim in this period is to reduce emissions to 5 per cent below 1990.

For the full eight years, our total emissions are projected to be 655.9 Mt CO2-e. That's 146.1 Mt CO2-e above the target of 509.8 Mt CO2-e.

But forestry activities should offset much of the shortfall, with 38 of those units left over from the previous surplus to balance the books. That would leave us 85.7 units in the black.

From 2021, the curve gets steeper. New Zealand is looking to reduce emissions by 30 per cent below 2005 levels by 2030. That target is equivalent to 11 per cent below 1990 levels by 2030. 

How that might be achieved is supposedly being hammered out by the review now under way. MfE has some concerns.

The bottom line is that it is worried that unless we do things differently, the Government - and therefore the taxpayer - could be on the hook for a total of $3.75-7.5 billion to pay for international units.

 

 

 - Stuff

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