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Questions and Answers on New Zealand’s 2020 emissions reduction target

New Zealand's 2020 emissions reduction target

1. What is New Zealand’s emissions reduction target?

New Zealand is prepared to take on a responsibility target for greenhouse gas emissions reductions of between 10 per cent and 20 per cent below 1990 levels by 2020, if there is a comprehensive global agreement, and other New Zealand conditions are met (see Question 2).

This target range reflects what is a fair contribution by New Zealand to the international effort to reduce greenhouse gas emissions.  It signals New Zealand’s commitment to a successful and ambitious outcome from the United Nations climate change conference to be held in Copenhagen in December.  A decision on the target range was made after weighing up environmental and social factors, economic implications, international relations aspects and taking into account the results of public consultation. 

2. What are the conditions attached to the New Zealand target?

New Zealand is prepared to take on a responsibility target if there is a comprehensive global agreement. This means:

  1. the global agreement sets the world on a pathway to limit temperature rise to not more than 2°C;
  2. developed countries make comparable efforts to those of New Zealand;
  3. advanced and major emitting developing countries take action fully commensurate with their respective capabilities;
  4. there is an effective set of rules for land use, land-use change and forestry (LULUCF); and
  5. there is full recourse to a broad and efficient international carbon market.

3. What does a ‘responsibility target’ mean?

Under the current structure of the Kyoto Protocol, a ’responsibility target’ means that New Zealand can meet its target through a mixture of domestic emission reductions, the storage of carbon in forests, and the purchase of emissions reductions in other countries. 

4. Why have we set a target range and not a single target?

Announcing a target range gives New Zealand flexibility to adjust its target depending on progress in the international negotiations.  Where New Zealand’s final target will lie within this range will depend on the overall ambition of the agreement, what other countries are prepared to do, and the effectiveness of the rules.

Having conditions enables New Zealand to signal to other countries in the United Nations negotiations what we expect from a comprehensive global agreement.  If the international agreement falls short of meeting these conditions, New Zealand reserves the right to reconsider the stringency of its target. 

5. What are the rule changes we are seeking at the international negotiations? Why are they important to New Zealand?

New Zealand is seeking a number of international rule changes as well as the continuation of some existing rules. Of particular importance are rules related to forestry and land use, and those related to the international carbon market.  These are important because they impact on New Zealand’s ability to meet its future responsibility target for reducing greenhouse gas emissions.

6. Why didn’t we announce a target based on what we are willing to do regardless of other countries actions?

Some countries have announced unilateral 2020 targets, others have not.  The Government has announced a 2020 target range that focuses on what contribution New Zealand is prepared to make as part of a comprehensive and ambitious global agreement.  We are focused on achieving the best outcome possible to help address this global issue. 

7. How does the 2020 target relate to New Zealand’s 2050 target?

New Zealand’s 2020 target forms part of a step towards ensuring that New Zealand’s long-term target to reduce emissions by 50 per cent below 1990 levels by 2050 (“50 by 50”) is achieved. Reaching the 50 by 50 goal is a significant challenge and it is important that we make a start now to give us a realistic chance of reaching it.

8. What does our target translate to in per capita reductions?

Because of New Zealand’s projected 35 per cent population growth over the period 1990 to 2020, our target reductions are more stringent when considered on a per capita basis.  A target of 10 per cent below 1990 levels equates to a 35 per cent per capita reduction in emissions from 1990 to 2020.  A target of 20 per cent below 1990 levels equates to a 42 per cent per capita reduction in emissions from 1990 to 2020.

Background on New Zealand's target range

9. What opportunities were given to the public to have their say on the 2020 target?

The decision on 2020 emissions reductions is significant and will affect all New Zealanders. New Zealand’s 2020 target was decided following consultation with New Zealand business, farmers, environmental groups, Māori, scientists, academics and other stakeholders. 

Members of the public were invited to submit their ideas on New Zealand’s 2020 emissions reduction target. As at submissions closing date, a total of 317 written submissions were received, including submissions from 16 stakeholder organisations. Members of the public were also invited to ask Minister Smith questions, which he discussed during an online forum in July.

10. What did people say in submissions on the 2020 target?

Many of those that advocated for an ambitious target policy (20 per cent to 40 per cent below 1990 levels) provided reasons for their targets. The three most common reasons cited for pursuing an ambitious emissions target policy were that: acting now will be cheaper than acting later; we should base our target on what the science tells us is necessary; and doing so will protect our clean green image/brand.

Other reasons given for supporting an ambitious target include: demonstrating leadership and encouraging other countries to take similar action; stimulating growth in the green economy and supporting green businesses; supporting our Pacific Island neighbours; it is fair given our high per capita emissions/high carbon footprint; New Zealand being vulnerable to the effects of climate change; and that we should take a proactive approach to reducing our emissions rather than having change forced upon us.

The main reasons given for pursuing a more cautious emissions target policy (0 to 19 per cent or an increase on 1990 levels) were that:

  1. New Zealand has low mitigation potential, especially in relation to agriculture
  2. higher targets have higher economic costs
  3. New Zealand should align with our main trading partners, especially Australia
  4. New Zealand should set targets that are achievable domestically. Any abatement not met domestically will need to be met offshore, and this will be an ongoing cost, as oppose to domestic mitigation measures which will be a one-off cost
  5. New Zealand makes a small contribution overall to global emissions.

11. How does our 2020 target compare with other countries 2020 targets?

The table below shows the targets announced by a number of other countries.


Country		 Percentage of world emissions: 2007* Emissions Change: 1990-2007 Announced 2020 Target (relative to 1990 levels) Announced 2050 Target
Developed countries
Flag of New Zealand
New Zealand		 0.2% 22.1% A responsibility target for greenhouse gas emissions reductions of between 10% and 20% below 1990 levels by 2020, if there is a comprehensive global agreement and other conditions important to New Zealand are met. Reduce emissions by 50% below 1990 levels.
Flag of Australia
Australia		 1.4% 30.0% 4% reduction unilaterally; 14% reduction conditional on efforts by major economies; about 24% reduction conditional on adequate global agreement. Reduce emissions to 60% below 1990 levels.

Canada 		1.9% 26.2% About a 3% reduction. A reduction of about 50-65% on 1990 levels.
Flag of the European Union
EU-27		 13.0% -9.3% 20% reduction unilaterally; 30% reduction conditional on other countries’ efforts.  
Flag of Japan
Japan		 3.5% 8.2% 8% reduction (domestic reductions only). Reduce emissions to about 55% and 80% below 1990 levels.
Flag of the United States
USA		 18.3% 16.8% Return to 1990 levels (0%). Reduce emissions to about 80% below 1990 levels.
Developing countries
Flag of the People's Republic of China
China		 20.3% 120.5% Countries have agreed to protect the climate system on the basis of equity and according to their differing responsibilities and capabilities. Developed countries have agreed to take the lead. As developing countries’ emissions and wealth grow, they will need to increasingly take in a share of the global effort.
Flag of India
India		 5.1% 79.9%
Flag of Brazil
Brazil		 2.7% 54.7%

'All emissions data is exclusive of land use, land use change and forestry. Sources: 2009 National Greenhouse Gas Inventory Submissions, UNFCCC (developed countries), Climate Analysis Indicators Tool, World Resources Institute (developing countries and world).'

12. Why have 1990 emission levels been used as the baseline for the 2020 target?

There are three key reasons why our target has been set with a baseline of 1990 levels.  First, emission reduction targets for developed countries during the first commitment period of the Kyoto Protocol (from 2008 to 2012) were set relative to 1990 base years. Secondly, our 2050 target is also expressed relative to 1990 emission levels. Setting a 2020 target relative to 1990 levels makes it easier to see where we have come from and where we are heading. Thirdly, the science used to calculate our emissions in 1990 is still improving so using 1990 levels as oppose to a fixed mega tonne amount will allow us to adjust our target as this information improves.

13. What independent research has the Government sought to enable it to set the 2020 target?

The Government has commissioned two reports on the economic impacts on the New Zealand economy of setting different targets. The first was a joint study by the New Zealand Institute of Economic Research (NZIER) and Infometrics and examined the macroeconomic impacts of different 2020 targets. The second was a report by NZIER on the potential effects of setting a 2020 target on the Maori economy. You can read these reports here. 

14. Does the 2020 target align with what the science says is required to avoid dangerous climate change?

The Government is informed by the scientific advice from the International Panel on Climate Change (IPCC).  The most recent IPCC assessment indicates that if the concentration of greenhouse gases in the atmosphere were to be stabilised at 450 ppm CO2-e, we stand a reasonable chance of limiting global temperature increase to 2°C (see table 5.1 of the IPCC’s synthesis report).  New Zealand supports a global agreement that sets the world on a pathway to limit global average temperate rise to not more than 2°C. 

The IPCC assessment states that the concentration of greenhouse gases in the atmosphere could be stabilised at 450 ppm CO2-e if developed countries as a collective group had reduced their emissions so that they were 25 per cent to 40 per cent below 1990 levels in 2020 and there is a substantial deviation in emissions by major developing countries (see box 13.7 in the Working group III report).1 Further reductions would also be required beyond 2020.

The IPCC has not expressed a view on the appropriate balance between countries on emissions reductions. Scientists can properly advise on the reduction emissions required to stabilise concentrations and temperature, but it is a socio-political issue as to what is a fair balance of effort between countries.

It is the collective and total effort of developed (and developing) countries that matters.  It does not mean that every country’s target must sit within the 25-40 per cent range.  New Zealand’s national circumstances – including our emissions and economic profile - mean that it is fair for New Zealand to offer a responsibility target for greenhouse gas emission reductions of between 10 per cent and 20 per cent below 1990 levels by 2020. 

New Zealand is also committed to helping reduce global emissions in other ways, such as providing finance and technology to help developing countries reduce their emissions and by making meaningful contributions to international research on emissions reductions, especially in agriculture.

Scope

15. What is the difference between “net” and “gross” emissions?

“Gross emissions” comprises all emissions from the energy, agriculture, waste, industrial processes and solvents sectors.

On the other hand, “net emissions” comprises gross emissions minus the carbon absorbed by trees. Carbon absorbed by trees is the balance between carbon sequestered or released on harvesting by post-1989 forests, and carbon emitted when pre-1990 forests are deforested.

16. Can the carbon stored in our soils help us to meet the 2020 target?

It is possible that soil carbon may one day play a part in meeting targets in New Zealand,   but there are a range of factors that make it difficult to do this at present.  Currently, soil carbon is largely in balance in New Zealand. Increasing soil carbon over the longer term can be difficult, especially in pasture lands. It can also be difficult and expensive to measure, and changes may be only temporary.

17. Does the 2020 target include international aviation emissions?

No, emissions from international aviation have not been included in the target. These emissions are not covered under the Kyoto Protocol.

International context

18. What is the process for signing a new international agreement or treaty on climate change?

Should the international negotiations result in a new climate change treaty or legally binding agreement, the New Zealand Government would need to decide whether to sign up to this.  Following signature, the international treaty or agreement would only become legally binding on New Zealand once the Government had ratified the treaty or agreement.  Before ratification, the treaty or agreement would go through the Parliamentary treaty examination process, during which time it is usual to seek public submissions.

19. How does the 2020 target translate to a commitment over subsequent commitment periods, 2013-2017 or 2013-2020?

The announced 2020 target range is not internationally binding.  Rather, it frames the expectations as to what New Zealand’s binding commitment for a second (and possibly subsequent) commitment period under the Kyoto Protocol or equivalent future international agreement.

20. Does announcing the 2020 target mean New Zealand has a legal obligation to the international community?

The announced 2020 target range is not internationally binding. Rather, the purpose of announcing our 2020 target range is to signal New Zealand’s commitment to a successful and ambitious outcome from the UN Climate Change Conference in Copenhagen in December.  New Zealand’s final emission reduction commitment will be decided once there is greater clarity around the level of other countries’ emissions reduction commitments, and the key rules that will be in place.  After a final agreement is reached in the international negotiations, ratification by New Zealand of a future international agreement would be considered by a domestic parliamentary process. 

21. Why is New Zealand the last Annex I country to announce a 2020 target?

A major reason for the timing of New Zealand’s announcement was to receive information on New Zealand’s land use and forestry from our Land Use Carbon Analysis System (LUCAS). Uncertainty over forest area in New Zealand has resulted in large variations in New Zealand’s Kyoto balance figures. Recent updates in the LUCAS system have reduced the level of uncertainty around New Zealand’s forestry figures. The Government did not want to finalise a medium term target until these LUCAS updates were complete.

22. What international relations aspects were considered when setting New Zealand’s 2020 target range?

The Government has considered a number of international relations aspects when coming to a decision on a 2020 target range.  These include the targets announced by other countries, the need to maintain New Zealand’s influence in the climate change negotiations, and the potential implications for New Zealand’s “clean, green” image and our reputation in overseas markets.  

23. Most of the countries that have announced targets so far are developed countries. Will developing countries be expected to announce similar targets?

Different countries have announced a range of 2020 targets, with different levels of ambition, depending on their national circumstances, including their different responsibilities and capabilities. Developed countries have agreed to take the lead. As developing countries’ emissions and wealth grow, they will need to increasingly take on a share of the global effort.

Reaching the target

24. What would New Zealand’s forecasted emissions be at 2020 under business as usual conditions?

Without any new policy measures that reduce emissions (and excluding an emissions trading scheme), emissions are projected to be about 41 per cent higher in 2020 than they were in 1990.

25. What measures does the Government have in place to help New Zealand meet a future responsibility target?

National campaigned on an amended New Zealand Emissions Trading Scheme. An emissions trading scheme puts a price on greenhouse gas emissions. Changes to the scheme are being considered as part of a Select Committee Review and discussions with Australia on harmonisation with their similar Carbon Pollution Reduction Scheme.
Other policies to reduce emissions include:

  1. a $323 million home insulation and clean heating fund to insulate 180,000 homes over four years
  2. a new Centre for Agricultural Greenhouse Gas Research
  3. incentives for new energy technologies like sustainable biofuels, electric cars and solar water systems
  4. Resource Management Act reforms and a National Policy Statement to support renewable electricity generation.  

Costs of meeting the target

26. In these tough economic times, can we afford to commit to reducing our emissions?

The current economic conditions are challenging and we need to be wary about unnecessarily burdening the economy. On the other hand, climate change is a long term problem that needs long term, enduring solutions.  It is important that a balance is struck that ensures that we do our fair share to reduce global emissions, while also protecting our economy.

27. What will the target mean for household costs?

The target that New Zealand agrees to take on in 2020 will not directly affect the price that households face. Costs to households will be mainly a result of the international price on carbon and passed through to New Zealanders via a modified New Zealand Emissions Trading Scheme. The most important cost increases as a result of this will increases in the price of petrol and electricity.  This is determined in the world market and is beyond New Zealand’s direct control.  

Changes to the New Zealand Emissions Trading Scheme are being considered as part of a Select Committee Review and discussions with Australia on harmonisation with their similar Carbon Pollution Reduction Scheme, but assuming a NZ$15 per tonne emission price the price of petrol would be about 3.7 cents a litre higher, and the wholesale price of electricity about 0.7c a kilowatt hour more expensive.  At NZ$50 per tonne petrol would be about 12.3 cents a litre more expensive and wholesale electricity about 2.3 cents a kilowatt hour more expensive.

According to economic modelling by consultancies NZIER and Infometrics, a target of a 15 per cent reduction in emissions below 1990 levels in 2020 would result in reductions in disposable incomes from about $49,000 to about $47,650 per year in 2020. This is still a considerable increase on current disposable incomes, which are about $38,500.

28. Why do some people say that the NZIER/Infometrics modelling on possible targets overestimates the cost of the different emissions targets?

For any economic modelling to occur a number of assumptions need to be made. A range of scenarios were modelled by NZIER and Infometrics that looked at the effects of whether there are technical advances induced by a carbon price, and whether the rest of the world takes action to reduce emissions or not (some modelling was done to establish the effects of an Emissions Trading Scheme, some were done specifically to model the effect of a 2020 target).

Assumptions were also made about the future world carbon price. Modelling of this nature is never perfect, but it is useful. The modelling does not provide an estimation of what will happen if these assumptions do not hold. However, these models provide the best estimate of what the impacts of different emissions targets would be.

29. Why is 40 per cent an unrealistic target?

A 40 per cent emission reduction target for 2020 on 1990 levels would be among the largest reduction committed to by any country.  It would be unrealistic for New Zealand to commit to such a large target, given that our emissions grew by 22 per cent between 1990 and 2007.  This is especially the case when it is considered that it is much more costly to reduce emissions in New Zealand than in most other developed countries due to our unique emissions profile, including a high proportion of emissions from agriculture and already high renewable energy generation levels.

Taking on a 40 per cent reduction target would place a much greater cost on our economy than the costs that other countries will take on for their targets, and for that reason it would be unrealistic to expect New Zealand to commit to such a target.

 

1. The research which underlies the IPCC assessment indicates that these substantial deviations should equal between 15 per cent and 30 per cent reduction below business-as-usual in Latin America, Middle East, East Asia and Centrally-planned Asia.

 

Last updated: 10 August 2009