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Chapter 1: Introduction

1.1 Background

Greenhouse gases in the Earth’s atmosphere trap warmth from the sun and make life as we know it possible. However, since the industrial revolution (about 1750) there has been a global increase in the atmospheric concentration of greenhouse gases such as carbon dioxide, methane and nitrous oxide (IPCC, 2007). This increase is attributed to human activities, particularly the burning of fossil fuels and land-use change.

In 2007, the Intergovernmental Panel on Climate Change (IPCC) concluded that most of the increase in global average temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations (IPCC, 2007). The IPCC has predicted that continued greenhouse gas emissions at or above current rates would cause further warming and induce many changes in the global climate system during the 21st century.

1.1.1 The United Nations Framework Convention on Climate Change

At a global level, the science of climate change is assessed by the Intergovernmental Panel on Climate Change (IPCC). In 1990, the IPCC concluded that human-induced climate change was a threat to our future. In response, the United Nations General Assembly convened a series of meetings that culminated in the adoption of the United Nations Framework Convention on Climate Change (the Climate Change Convention) at the Earth Summit in Rio de Janeiro in May 1992.

The Climate Change Convention took effect on 21 March 1994 and has been signed and ratified by 188 nations including New Zealand.

The main objective of the Climate Change Convention is to achieve “stabilisation of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic (caused by humans) interference with the climate system. Such a level should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner” (United Nations, 1992).

All countries that ratify the Climate Change Convention are required to address climate change. A part of the obligation is to monitor greenhouse gas trends. The annual inventory of greenhouse gas emissions and removals fulfils this obligation. Countries are also obligated to protect and enhance carbon sinks (for example, forests) and implement measures that assist in national and or regional climate change adaption and mitigation. In addition, developed countries commit to providing financial assistance to developing countries.

Developed countries who ratified the Climate Change Convention agreed to non-binding targets to reduce greenhouse gas emissions to 1990 levels by 2000.

Only a few countries made appreciable progress towards achieving their targets. The international community recognised that the Climate Change Convention alone was not enough to ensure greenhouse gas levels would be stabilised at safe levels. More urgent action was needed. In response, Parties launched a new round of talks for stronger and more detailed commitments for developed countries. After two and a half years of negotiations, the Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997. New Zealand ratified the Kyoto Protocol on 19 December 2002. The Protocol came into force on 16 February 2005.

1.1.2 The Kyoto Protocol

The Kyoto Protocol shares the Climate Change Convention’s objective, principles and institutions. The Protocol also considerably strengthens the Climate Change Convention. Article 3 of the Kyoto Protocol states that the Annex I Parties ratifying the Protocol shall individually or jointly ensure that their aggregate anthropogenic greenhouse gas emissions do not exceed their “assigned amount”. The goal is to reduce the aggregate emissions of the six greenhouse gases from Annex I countries by at least 5 per cent below 1990 levels in the first commitment period (2008 to 2012). Only Parties to the Climate Change Convention that have also become Parties to the Protocol (by ratifying, accepting, approving, or acceding to it) are bound by the Protocol’s commitments. The “assigned amount” is the maximum amount of greenhouse gas emissions (measured as tonnes of CO₂ equivalent) that a Party may emit over the commitment period. For the first commitment period, New Zealand’s assigned amount is the gross greenhouse gas emissions in 1990 multiplied by 5. The assigned amount does not include emissions and removals from the land use, land-use change and forestry sector (LULUCF) in 1990 unless this sector was a source of emissions.

New Zealand’s assigned amount is recorded as 309,564,733 metric tonnes CO₂-e. The assigned amount is based on the 1990 inventory submitted as part of the Initial Report under the Kyoto Protocol (Ministry for the Environment, 2006) and reviewed by an international review team in February 2007 (UNFCCC, 2007). The assigned amount does not change during the first commitment period of the Kyoto Protocol. In contrast, emissions and removals for all years of the inventory are subject to change due to continuous improvement. Consequently, the level of emissions in 1990 reported in 2008 inventory submission is different (0.1 per cent) from the 1990 level used in the assigned amount calculation.

To meet their commitments, Annex I Parties must put in place domestic policies and measures to reduce emissions. Reducing global greenhouse gas concentrations in the atmosphere can be achieved by reducing the quantity of greenhouse gases emitted or removing CO₂ presently in the atmosphere by increasing and maintaining carbon sinks (for example, managing forests). Carbon sinks that meet Kyoto Protocol requirements create removal units. The removal units are added to a Party’s assigned amount.

The Kyoto Protocol also defined three “flexibility mechanisms” to lower the overall costs of achieving its commitments. These are Clean Development Mechanisms (CDM), Joint Implementation (JI) and emissions trading. These mechanisms enable Parties to access cost-effective opportunities to reduce emissions or to remove carbon from the atmosphere through action in other countries. While the cost of limiting emissions varies considerably from region to region, the benefit for the atmosphere is the same, wherever the action is taken. More information on these mechanisms can be obtained from the website of the Climate Change Convention (www.unfccc.int).

Under Article 7.1 of the Kyoto Protocol, New Zealand is required to include additional information within the submission of the annual greenhouse gas inventory. This becomes mandatory for the 1990 – 2008 inventory submitted in 2010, as this includes the first year of the first commitment period. However, in order to fully participate in Kyoto mechanisms (outlined above), a Party must submit a complete greenhouse gas inventory required under the Climate Change Convention in 2007 and continue to do so until reporting is completed for all years of the commitment period.

The additional information required includes:

Significant changes to a Party’s national system / registry.
Holdings and transactions of transferred / acquired units under Kyoto mechanisms.
Information relating to the implementation of Article 3.14 on the minimisation of adverse impacts.

In the 2008 inventory submission, New Zealand has reported supplementary information under the Kyoto Protocol in Annex 8. Information on transactions of transferred and/or acquired units under Kyoto mechanisms during the 2008 calendar year will be included in the 2009 inventory submission.

1.1.3 A national greenhouse gas inventory

The development and publication of an annual inventory of all human-induced emissions and removals of greenhouse gases not controlled by the Montreal Protocol is part of New Zealand’s obligations under the Climate Change Convention (Articles 4 and 12) and the Kyoto Protocol (Article 7). The inventory is the primary tool for measuring New Zealand’s progress against these obligations.

The content and format of the inventory is prescribed by the IPCC (IPCC, 1996; 2000; 2003) and relevant decisions of the Conference of the Parties (COP) to the Climate Change Convention, the most recent being FCCC/SBSTA/2006/9 (UNFCCC, 2006). A complete inventory submission requires two components: the National Inventory Report (NIR) and emissions and removal data in the Common Reporting Format (CRF). Inventories are subject to an annual three-stage international review process administered by the Climate Change Convention secretariat. All review reports are available online (www.unfccc.int).

The inventory reports emissions and removals of the gases CO₂, CH₄, N₂O, HFCs, PFCs and SF₆. The gases are reported under six sectors: energy, industrial processes, solvent and other product use, agriculture, LULUCF and waste. The indirect greenhouse gases, carbon monoxide (CO), sulphur dioxide (SO₂), oxides of nitrogen (NO_X) and non-methane volatile organic compounds (NMVOCs) are also included in the inventory. Only emissions and removals of the direct greenhouse gases, CO₂, CH₄, N₂O, HFCs, PFCs and SF₆ are reported in New Zealand’s total emissions under the Climate Change Convention and are accounted for under the Kyoto Protocol.

New Zealand greenhouse gas emissions profile

In 1990, New Zealand’s total greenhouse gas emissions were equal to 61,947.9 Gg CO₂ equivalent (CO₂-e). In 2006, total greenhouse gas emissions were 77,868.1 Gg CO₂-e equating to a 15,920.2 Gg (25.7 per cent) rise since 1990. Net removals of CO₂ through forest sinks increased 10.9 per cent from 20,507.69 Gg CO₂ in 1990 to 22,749.26 Gg CO₂ in 2006.

Agricultural emissions contributed 48.4 per cent of New Zealand’s total emissions in 2006. The large proportion of agricultural greenhouse gas emissions creates a unique greenhouse gas emission profile for New Zealand. In a typical developed country the majority of emissions come from electricity production, transport and industrial processes.

In 2006, New Zealand’s emissions from the energy sector accounted for 43.8 per cent of the total emissions. The energy sector experienced the highest rate of growth of any sector, increasing 45 per cent from 1990 to 2006. This growth is due to increasing demands for energy from transport, electricity generation, manufacturing industries and construction.

Renewable energy sources dominate New Zealand's electricity generation. Hydro generation, geothermal, woody biomass, wind, solar, biogas and landfill gas contribute 66 per cent of New Zealand’s annual generation (Ministry of Economic Development, 2007b). The proportion of renewable energy used to produce electricity varies year to year depending on the availability of water for generating hydro electricity (refer to section 3.2.1).

The predominant greenhouse gases emitted by New Zealand have changed since 1990. Whereas CH₄ and CO₂ contributed equally to New Zealand’s emissions in 1990, CO₂ is now the major greenhouse gas in New Zealand’s emissions profile (Table 1.1). Growing emissions of CO₂ reflects the increased growth in emissions from the energy sector compared to the agriculture sector.

1.2 Institutional arrangements

The Climate Change Response Act 2002 (CCRA) enables New Zealand to meet its international obligations under the Climate Change Convention and the Kyoto Protocol. The CCRA names the person “who is for the time being the chief executive of the Ministry for the Environment” as New Zealand’s inventory agency. The section “Part 2 Institutional Arrangements Sub part 3 – Inventory Agency of the CCRA” (2002) specifies the primary functions of the inventory agency, including:

“to estimate annually New Zealand’s human-induced emissions by sources and removals by sinks of greenhouse gases” (32.1(a))
“to prepare New Zealand’s annual inventory report under Article 7.1 of the Protocol and New Zealand’s national communication (or periodic report) under Article 7.2 of the Protocol and Article 12 of the Climate Change Convention” (32.1(b)(i) and (ii)).

The CCRA also specifies the responsibilities of the inventory agency in carrying out its functions, including record keeping and publication of the inventory. Part 3 of the CCRA provides for the authorisation of inspectors to collect information needed to estimate emissions or removals of greenhouse gases.

The Ministry for the Environment (MfE) is responsible for overall development, compilation and submission of the annual inventory to the Climate Change Convention secretariat. The Ministry also calculates estimates of emissions for the agriculture and waste sectors and emissions and removals from the LULUCF sector.

The Ministry of Economic Development (MED) collects and compiles all emissions from the energy sector and CO₂ emissions from the industrial processes sector. Emissions of the non-CO₂ gases from the industrial processes sector are obtained through industry survey by consultants, contracted to the Ministry for the Environment.

The Ministry of Agriculture and Forestry (MAF) provides many of the statistics for the agriculture sector and removals data from planted forests in the LULUCF sector. The inventory estimates are underpinned by the research and modelling of researchers at New Zealand’s crown research institutes and universities.

New Zealand’s national statistical agency, Statistics New Zealand, provides many of the official statistics for the agriculture sector through regular agricultural census and surveys. Statistics New Zealand also provides statistics on fuel consumption through the “Deliveries of Petroleum Fuels by Industry Survey” and the “New Zealand Coal Sales Survey”. Population census data from Statistics New Zealand is used in the waste and solvent and other product use sectors.

1.3 Inventory preparation processes

Each inventory report is 15 months in arrears of the calendar year, allowing time for data to be collected and analysed. Sector-based data analysis, data entry into the Climate Change Convention “CRF Reporter” database and quality checking occurs over the period October to December. The NIR is updated over this 3 month time period. Once the sector-based emissions estimates are updated the National Inventory Compiler at the MfE calculates the inventory uncertainty, undertakes the key category assessment and further quality checking and finalises the NIR. The inventory is reviewed within the MfE, MED and MAF before being approved and submitted to the Climate Change Convention secretariat. The inventory and all required data for the submission to the Climate Change Convention secretariat are stored on the Ministry’s central computer network in a controlled file system. The inventory is available from the websites of the MfE and the Climate Change Convention.

New Zealand is required to have a national system in place for its greenhouse gas inventory under Article 5.1 of the Kyoto Protocol. New Zealand provided a full description of the national system in the initial report for the Kyoto Protocol (Ministry for the Environment, 2006).

1.4 Methodologies and data sources used

The guiding documents in inventory preparation are the Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories (IPCC, 1996), the Good Practice Guidance and Uncertainty Management in National Greenhouse Gas Inventories (IPCC, 2000), Good Practice Guidance for Land Use, Land-Use Change and Forestry (IPCC, 2003) and the Climate Change Convention guidelines on reporting and review (UNFCCC, 2006). The concepts contained in Good Practice Guidance are being implemented in stages, according to sector priorities and national circumstances.

Energy: Greenhouse gas emissions from the energy sector are calculated using the IPCC Tier 1 approach. Activity data is compiled from industry-supplied information via the MED and Statistics New Zealand (refer to Chapter 3 and Annex 2). Country specific emission factors are used for CO₂ emission calculations. Applicable IPCC default factors are used for non-CO₂ emissions where New Zealand emission factors are not available.

Industrial processes and solvent and other product use: Activity data and carbon dioxide emissions are supplied directly to the MED by industry sources. The IPCC Tier 2 approach is used and emission factors are country-specific. Activity data for the non-CO₂ gases are collated via an industry survey. Emissions of HFCs and PFCs are estimated using the IPCC Tier 2 approach and SF₆ emissions from large users are assessed via the Tier 3a approach (IPCC, 2000).

Agriculture: Livestock population data are obtained from Statistics New Zealand through the agricultural production census and surveys. A Tier 2 (model) approach is used to estimate CH₄ emissions from dairy cattle, non-dairy cattle, sheep and deer. The methodology uses animal productivity data to estimate dry matter intake and methane production. The same dry matter intake data is used to calculate N₂O emissions from animal excreta. A Tier 1 approach is used to calculate CH₄ and N₂O emissions for livestock species present in insignificant numbers.

Land use, land-use change and forestry: The LULUCF inventory is completed using a mix of IPCC Tier 2 and Tier 1 approaches. A Tier 2 approach is used for the “planted forest” subcategory of forest land. Changes in planted forest stocks are assessed from national forest survey data and computer modelling of the planted forest estate. A Tier 1 approach is used for the categories cropland, grassland, wetland, settlements and other land. Changes in land area for these categories are based on modified national land cover databases reclassified to the IPCC LULUCF categories. At present, this is the best data available for reporting the LULUCF sector within New Zealand. Results from the Land Use and Carbon Analysis System (LUCAS), as described in Annex 3.2, will improve the reporting for the LULUCF sector and be consistent with reporting under the Kyoto Protocol.

Waste: Emissions from the waste sector are estimated using waste survey data combined with population data from Statistics New Zealand. Calculation of emissions from solid-waste disposal uses an IPCC Tier 2 method with country-specific emission factors. Methane and N₂O emissions from domestic and industrial wastewater handling are calculated using a refinement of the IPCC methodology (IPCC, 1996). There is no incineration of municipal waste in New Zealand. The only incineration is for small specific waste streams including medical, quarantine and hazardous wastes. Emissions of CO₂, CH₄ and N₂O from waste incineration have been calculated for the first time in the 2008 inventory submission using a Tier 1 methodology (IPCC, 2006).

1.5 Key categories

The IPCC Good Practice Guidance and Uncertainty Management in National Greenhouse Gas Inventories (IPCC, 2000) identifies a key category as “one that is prioritised within the national inventory system because its estimate has a significant influence on a country’s total inventory of direct greenhouse gases in terms of the absolute level of emissions, the trend in emissions, or both”. Key categories identified within the inventory are used to prioritise inventory improvements.

The key categories in the New Zealand inventory have been assessed using the Tier 1 level and trend methodologies from the IPCC good practice guidance (IPCC, 2000 and 2003). The methodologies identify sources of emissions and removals that sum to 95 per cent of the total level of emissions or 95 per cent of the trend of the inventory in absolute terms.

In accordance with Good Practice Guidance for Land Use, Land-Use Change and Forestry (IPCC, 2003), the key category analysis is performed once for the inventory excluding LULUCF categories and then repeated for the full inventory including the LULUCF categories. Non-LULUCF categories that are identified as key in the first analysis but that do not appear as key when the LULUCF categories are included are still considered as key categories.

The key categories identified in the 2006 year are summarised in Table 1.5.1. The major contributions to the level analysis including LULUCF (Table 1.5.2) are CO₂ from “forest land remaining forest land” (23.9 per cent) and CH₄ from enteric fermentation in domestic livestock (22.3 per cent).

The largest contribution to the trend analysis, including LULUCF, (Table 1.5.3) is from CH₄ emissions from enteric fermentation in domestic livestock (16 per cent), CO₂ emissions from road transportation (15.2 per cent), and CO₂ emissions from stationary combustion of solid fuels (13.5 per cent).

There were two modifications to the IPCC suggested key categories to reflect New Zealand’s national circumstances. The category for fugitive emissions from geothermal operations was separated from the “fugitive emissions from fuels-oil and natural gas” category. Carbon dioxide emissions from the “ammonia production” category are considered to be a qualitative key category because of the large increase in nitrogenous fertiliser use observed in the agriculture sector. More information on the calculation of the level and trend analysis is included in Annex 1.

Table 1.5.1 Summary of key categories for 2006 (including and excluding LULUCF activities)

Quantitative method used: Tier 1
IPCC Source Categories	Gas	Criteria for Identification
Energy Sector
CO₂ emissions from stationary combustion - solid	CO₂	level, trend
CO₂ emissions from stationary combustion - liquid	CO₂	level, trend
CO₂ emissions from stationary combustion - gas	CO₂	level, trend
Mobile combustion - road vehicles	CO₂	level, trend
Mobile combustion - aviation	CO₂	level
Fugitive emissions from oil and gas operations	CO₂	level, trend
Fugitive emissions from geothermal operations	CO₂	trend
Industrial processes sector
Emissions from cement production	CO₂	level
Emissions from the iron and steel industry	CO₂	level
Emissions from aluminium production	CO₂	level
PFCs from aluminium production	PFCs	trend
Ammonia production	CO₂	qualitative
Emissions from substitutes for ozone depleting substances	HFCs	level, trend
Agricultural Sector
Emissions from enteric fermentation in domestic livestock	CH₄	level, trend
Emissions from manure management	CH₄	level
Direct emissions from agricultural soils	N₂O	level, trend
Emissions from agricultural soils - animal production	N₂O	level, trend
Indirect emissions from nitrogen used in agriculture	N₂O	level
LULUCF Sector
Forest land remaining forest land	CO₂	level, trend
Cropland remaining cropland	CO₂	level
Conversion to forest land	CO₂	level, trend
Other-emissions from liming	CO₂	level, trend
Conversion to grassland	CO₂	level, trend
Waste sector
Emissions from solid waste disposal sites	CH₄	level, trend

Table 1.5.2 (a&b) Key category analysis for 2006 – Tier 1 level assessment including LULUCF (a) and excluding LULUCF (b)

(a) Tier 1 Category Level Assessment - including LULUCF
IPCC Categories	Gas	2006 estimate Gg	Level	Cumulative
Forest land remaining forest land	CO₂	25859.65	23.9	23.9
Emissions from enteric fermentation in domestic livestock	CH₄	24110.67	22.3	46.2
Mobile combustion - road vehicles	CO₂	12606.68	11.7	57.8
Emissions from stationary combustion - gas	CO₂	7938.09	7.3	65.2
Emissions from agricultural soils - animal production	N₂O	7609.13	7.0	72.2
Emissions from stationary combustion - solid	CO₂	6754.95	6.2	78.5
Indirect emissions from nitrogen used in agriculture	N₂O	3387.22	3.1	81.6
Emissions from stationary combustion - liquid	CO₂	3008.08	2.8	84.4
Conversion to forest land	CO₂	2127.72	2.0	86.3
Direct emissions from agricultural soils	N₂O	1736.81	1.6	87.9
Emissions from the iron and steel industry	CO₂	1622.36	1.5	89.4
Emissions from solid waste disposal sites	CH₄	1475.39	1.4	90.8
Mobile combustion - aviation	CO₂	1114.18	1.0	91.8
Emissions from manure management	CH₄	743.13	0.7	92.5
Cropland remaining cropland	CO₂	679.95	0.6	93.1
Other-emissions from liming	CO₂	676.11	0.6	93.8
Conversion to grassland	CO₂	661.04	0.6	94.4
Fugitive emissions from oil and gas operations	CO₂	657.47	0.6	95.0

(b) Tier 1 Category Level Assessment - excluding LULUCF
IPCC Categories	Gas	2006 estimate Gg	Level	Cumulative
Emissions from enteric fermentation in domestic livestock	CH₄	24110.67	31.0	31.0
Mobile combustion - road vehicles	CO₂	12606.68	16.2	47.2
Emissions from stationary combustion - gas	CO₂	7938.09	10.2	57.3
Emissions from agricultural soils - animal production	N₂O	7609.13	9.8	67.1
Emissions from stationary combustion - solid	CO₂	6754.95	8.7	75.8
Indirect emissions from nitrogen used in agriculture	N₂O	3387.22	4.3	80.1
Emissions from stationary combustion - liquid	CO₂	3008.08	3.9	84.0
Direct emissions from agricultural soils	N₂O	1736.81	2.2	86.2
Emissions from the iron and steel industry	CO₂	1622.36	2.1	88.3
Emissions from solid waste disposal sites	CH₄	1475.39	1.9	90.2
Mobile combustion - aviation	CO₂	1114.18	1.4	91.6
Emissions from manure management	CH₄	743.13	1.0	92.6
Fugitive emissions from oil and gas operations	CO₂	657.47	0.8	93.4
Emissions from substitutes for ozone depleting substances	HFCs & PFCs	601.35	0.8	94.2
Emissions from cement production	CO₂	560.66	0.7	94.9
Emissions from aluminium production	CO₂	552.76	0.7	95.6

Table 1.5.3 Key category analysis for 2006 – Tier 1 trend assessment including LULUCF (a) and excluding LULUCF (b)

(a) Tier 1 Category Trend Assessment - including LULUCF
IPCC Categories	Gas	Base year estimate Gg	2006 estimate Gg	trend assessment	Contribution to trend	Cumulative total
Emissions from enteric fermentation in domestic livestock	CH₄	21810.44	24110.67	0.034	16.0	16.0
Mobile combustion - road vehicles	CO₂	7534.97	12606.68	0.032	15.2	31.2
Emissions from Stationary combustion - solid	CO₂	3148.78	6754.95	0.029	13.5	44.7
Conversion to forest land	CO₂	141.28	2127.72	0.020	9.4	54.2
Emissions from Stationary combustion - gas	CO₂	7691.14	7938.09	0.018	8.4	62.6
Emissions from solid waste disposal sites	CH₄	2121.53	1475.39	0.012	5.8	68.3
Direct emissions from agricultural soils	N₂O	487.19	1736.81	0.011	5.4	73.8
Forest land remaining forest land	CO₂	21397.92	25859.65	0.011	5.0	78.8
Emissions from agricultural soils - animal production	N₂O	6850.46	7609.13	0.010	4.9	83.7
PFCs from aluminium production	PFC	641.68	82.49	0.007	3.5	87.2
Emissions from substitutes for Ozone depleting substances	HFCs & PFCs	0.00	601.35	0.006	2.9	90.1
Fugitive emissions from oil and gas operations	CO₂	263.48	657.47	0.003	1.6	91.7
Conversion to grassland	CO₂	704.22	661.04	0.002	1.1	92.7
Other (including liming)	CO₂	373.83	676.11	0.002	1.0	93.7
Emissions from stationary combustion - liquid	CO₂	2546.55	3008.08	0.002	0.9	94.7
Fugitive emissions from geothermal operations	CO₂	357.34	305.68	0.001	0.7	95.4

(b) Tier 1 Category Trend Assessment - excluding LULUCF
IPCC Categories	Gas	Base year estimate Gg	2006 estimate Gg	trend assessment	Contribution to trend	Cumulative total
Emissions from enteric fermentation in domestic livestock	CH₄	21810.44	24110.67	0.0338	19.3	19.3
Mobile combustion - road vehicles	CO₂	7534.97	12606.68	0.0320	18.3	37.7
Emissions from Stationary combustion - solid	CO₂	3148.78	6754.95	0.0286	16.4	54.0
Emissions from Stationary combustion - gas	CO₂	7691.14	7938.09	0.0177	10.1	64.1
Emissions from solid waste disposal sites	CH₄	2121.53	1475.39	0.0122	7.0	71.1
Direct emissions from agricultural soils	N₂O	487.19	1736.81	0.0115	6.6	77.7
Emissions from agricultural soils - animal production	N₂O	6850.46	7609.13	0.0102	5.9	83.5
PFCs from aluminium production	PFC	641.68	82.49	0.0074	4.2	87.8
Emissions from substitutes for ozone depleting substances	HCFs & PFCs	0.00	601.35	0.0061	3.25	91.3
Fugitive emissions from oil and gas operations	CO₂	263.48	657.47	0.0033	1.9	93.2
Emissions form stationary combustion – liquid	CO₂	2546.55	3008.08	0.0020	1.1	94.3
Fugitive emissions from geothermal operations	CO₂	357.34	305.68	0.0015	0.8	95.1

1.6 Quality assurance and quality control

Quality assurance (QA) and quality control (QC) are an integral part of preparing New Zealand’s inventory. The MfE developed a QA/QC plan in 2004 as required by the Climate Change Convention reporting guidelines (UNFCCC, 2006) to formalise, document and archive the procedures. The plan is annually updated in conjunction with New Zealand’s inventory improvement plan. As a result of recommendations from the initial review report (UNFCCC, 2007) New Zealand has increased quality control and assurance activities for the 2008 inventory submission. Details are discussed in sections 1.6.1 and 1.6.2 below.

1.6.1 Quality control

For the 2008 inventory submission, the MfE used Tier 1 QC checksheets. The Tier 1 checks are based on the procedures suggested in the good practice guidance (IPCC, 2000) for all key categories.

The initial review report (UNFCCC, 2007) recommended New Zealand intensify the time and resources directed at implementing the QA/QC plan with the aim of reducing the number of minor errors and inconsistencies. New Zealand responded to the recommendation by changing the inventory compilation schedule to allow more time for quality checking.

For the 2008 inventory submission, all sector level data was entered into the CRF Reporter by January 2008. The earlier deadline allowed two months for further quality checking at the sector level (between data spreadsheets and the CRF tables) and checking consistency between the CRF tables and the NIR. Corrections were made to any errors that were found. As a consequence of the earlier deadline, reporting in the agriculture and LULUCF sectors has changed from 3 year averages to single year values.

KPMG were contracted for 3 months to complete quality checks on key categories for the 2006 inventory year and to develop data quality objectives to further advance the implementation of New Zealand’s QA/QC plan. KPMG checked the calculations and assumptions used in the key spreadsheets and models were consistently applied, that the data from the spreadsheets and models were accurately transferred to the CRF Reporter and data from the CRF tables was accurately represented in the draft NIR. KPMG did not identify any significant errors within the source data spreadsheets or between the spreadsheets and the CRF Reporter and the draft NIR.

Data in the Climate Change Convention secretariat’s CRF Reporter database were checked visually for anomalies, errors and omissions. The MfE used the QC checking procedures included in the CRF Reporter database to ensure the data submitted to the Climate Change Convention secretariat were complete.

1.6.2 Quality assurance

New Zealand is in the process of updating its quality control and assurance system to ensure quality is built in at all stages of the inventory compilation process. KMPG developed a risk register to highlight potential risks in the inventory data compilation process. The Ministry for the Environment will use the risk register to aid prioritising further improvements to the inventory.

Quality assurance reviews of individual sectors and categories are included in the national inventory plan and commissioned by the MfE. A list of previous quality assurance reviews, their major conclusions and follow up are included in the excel workbooks available for download with this report from the Ministry for the Environment’s website.

Most of the activity data in the energy and agriculture sectors are compiled using data collected via surveys. These surveys are conducted and administered by Statistics New Zealand who conducts their own rigorous quality assurance and quality control procedures on the data.

1.6.3 The Climate Change Convention annual inventory review

New Zealand’s greenhouse gas inventory was reviewed in 2001 and 2002 as part of a pilot study of the technical review process (UNFCCC, 2001a; 2001b; 2001c; 2003), where the inventory was subject to detailed in-country, centralised and desk review procedures. The inventories submitted for the years 2001 and 2003 were reviewed during a centralised review process. The 2004 inventory was reviewed as part of the Kyoto Protocol initial review. This was an in-country review held from 19 to 24 February 2007. In all instances, the reviews were conducted by a review team comprising of experts nominated by Parties to the Climate Change Convention. Review reports are available from the Climate Change Convention website (www.unfccc.int).

New Zealand has consistently met the reporting requirements under the Climate Change Convention and the Kyoto Protocol. The submission of the inventory to the Climate Change Convention secretariat is consistently within the allocated six weeks of April 15th as required under decision 15/CMP.1 The national system for the greenhouse gas inventory, the national registry, and the 1990 (base year) greenhouse gas inventory was reviewed by an expert review team in February 2007. The expert review report (UNFCCC, 2007) concluded that:

“New Zealand’s greenhouse gas inventory is consistent with the Revised 1996 IPCC Guidelines and the IPCC good practice guidance, and adheres to the reporting guidelines under Article 7 of the Kyoto Protocol”
“New Zealand’s national system is prepared in accordance with the guidelines for national systems under Article 5, paragraph 1, of the Kyoto Protocol and reported in accordance with the guidelines for the preparation of the information required under Article 7 of the Kyoto Protocol”
“New Zealand’s national registry is fully compliant with the registry requirements as defined by decisions 13/CMP.1 and 5/CMP.1”.

These significant developments allowed New Zealand to be one of the first four Parties to be eligible to participate in the Kyoto Protocol mechanisms. New Zealand’s registry was operational on January 1, 2008.

1.7 Inventory uncertainty

Uncertainty estimates are an essential element of a complete greenhouse gas emissions and removals inventory. The purpose of uncertainty information is not to dispute the validity of the inventory estimates, but to help prioritise efforts to improve the accuracy of inventories in the future and guide decisions on methodological choice (IPCC, 2000). Inventories prepared following IPCC good practice guidance (IPCC, 2000 and 2003) will typically contain a wide range of emission estimates, varying from carefully measured and demonstrably complete data on emissions to order-of-magnitude estimates of highly variable estimates such as N₂O fluxes from soils and waterways.

New Zealand has included a Tier 1 uncertainty analysis as required by the Climate Change Convention inventory guidelines (UNFCCC, 2006) and good practice guidance (IPCC, 2000 and 2003). Uncertainties in the categories are combined to provide uncertainty estimates for the entire inventory in any year and the uncertainty in the overall inventory trend over time. LULUCF categories have been included using the absolute value of any removals of CO₂ (Table A7.1). Table A7.2 calculates the uncertainty in emissions only (ie, excluding LULUCF removals).

The calculated uncertainty for New Zealand’s total inventory (emissions and removals for a given year) in 2006 is ±± 16.6 per cent. The uncertainty in the overall trend from 1990 to 2006 is lower at ± 4.6 per cent. The uncertainty in total emissions (excluding removals) is ± 20.6 per cent with ± 5.4 per cent uncertainty in the trend of emissions.

The high uncertainty in a given year is dominated by emissions of CH₄ from enteric fermentation (refer to section 6.2) and N₂O emissions from agricultural soils (refer to section 6.5). These categories comprise 11.9 per cent and 8.7 per cent respectively of New Zealand’s total emissions and removals uncertainty. The uncertainty in these categories reflects the inherent variability when estimating emissions from natural systems, eg, the uncertainty in cattle dry-matter intake and CH₄ emissions per unit of dry matter. With the agricultural sector comprising approximately half of New Zealand’s emissions, high uncertainty in a given year is inevitable. Removals of CO₂ from forest land are also a major contribution to the uncertainty for 2006 at 6.6 per cent of New Zealand’s total emissions and removals. In comparison, the uncertainty in CO₂ emissions from burning of fossil fuels is only 1.5 per cent of the total.

Uncertainty in the trend is dominated by CO₂ emissions from the energy sector, at 2.7 per cent of the trend. This is because the uncertainty in energy activity data is greater than the uncertainty in energy emission factors and the energy sector is the second largest contributor to total emissions. The other major contributors to trend uncertainty are removals of CO₂ by forest land with 2.3 per cent and N₂O from agricultural soils with 1.1 per cent.

In most instances, the uncertainty values are determined by either expert judgement from sectoral or industry experts, by analysis of emission factors or activity data, or by referring to uncertainty ranges quoted in the IPCC documentation. A Monte Carlo simulation was used to determine uncertainty for CH₄ from enteric fermentation and N₂O from agricultural soils in the 2001/2002 inventory. As there have been no significant changes to the emission factors and or activity data, the 95 per cent confidence intervals developed from the Monte Carlo simulation were extended to the 2006 inventory.

1.8 Inventory completeness

The New Zealand inventory for the period 1990-2006 is complete. In accordance with good practice guidance (IPCC, 2000), New Zealand has focused its resources for inventory development on the key categories. Some categories considered to have negligible emissions are reported as “not estimated”. Where this has occurred explanations have been provided in the NIR and in the CRF tables.

The LULUCF data are the best estimate possible given the presently available data. The Land Use and Carbon Analysis System (LUCAS) is being developed to improve the accuracy of these data. Estimates using this system will be included when available. Development of the LUCAS will also reduce uncertainty by using country-specific emission and removal factors and use spatial data mapped specifically for the Climate Change Convention and Kyoto Protocol reporting. Details of the LUCAS development are included in Annex 3.2.

1.9 General notes

Units

Standard metric prefixes used in this inventory are:

kilo (k) = 10³ (thousand)

mega (M) = 10⁶ (million)

giga (G) = 10⁹

tera (T) = 10¹²

peta (P) = 10¹⁵

Emissions are generally expressed in gigagrams (Gg) in the inventory tables:

1 gigagram (Gg) = 1,000 tonnes = 1 kilotonne (kt)

1 megatonne (Mt) = 1,000,000 tonnes = 1,000 Gg

Gases

CO₂ carbon dioxide

CH₄ methane

N₂O nitrous oxide

PFCs perfluorocarbons

HFCs hydrofluorocarbons

SF₆ sulphur hexafluoride

CO carbon monoxide

NMVOC non-methane volatile organic compounds

NO_x oxides of nitrogen

SO₂ sulphur dioxide

Global warming potentials

The global warming potential is an index, representing the combined effect of the differing times greenhouse gases remain in the atmosphere and their relative effectiveness in absorbing thermal infrared radiation (IPCC, 2007).

The Climate Change Convention reporting requirements (UNFCCC, 2006) specify that the 100-year global warming potentials contained in the IPCC Second Assessment Report (IPCC, 1995) are used in national inventories. The indirect effects of a number of gases (CO, NO_x, SO₂ and NMVOCs) cannot currently be quantified and consequently these gases do not have global warming potentials. In accordance with the Climate Change Convention reporting guidelines (UNFCCC, 2006), indirect greenhouse gases that do not have GWPs are reported in the inventory but are not included in the inventory emissions total.

Common Global Warming Potentials (100 year time period)

(refer to http://unfccc.int/ghg_emissions_data/items/3825.php )

CO₂ = 1 HFC–32 = 650

CH₄ = 21 HFC–125 = 2,800

N₂O = 310 HFC–134a = 1,300

CF₄ = 6,500 HFC–143a = 3,800

C₂F₆ = 9,200 HFC–227ea = 2,900

SF₆ = 23,900

Conversion factors

From element basis to molecular mass From molecular mass to element basis

C - CO₂: C x 44/12 (3.67) CO₂ → C: CO₂ x 12/44 (0.27)

C - CH₄: C x 16/12 (1.33) CH₄ → C: CO₂ x 12/16 (0.75)

N - N₂O: N x 44/28 (1.57) N₂O → N: N₂O x 28/44 (0.64)

Notation keys

In the common reporting format tables, the following standard notation keys are used:

NONot occurring: when the activity or process does not occur in New Zealand.

NANot applicable: when the activity occurs in New Zealand but the nature of the process does not result in emissions or removals.

NENot estimated: where it is known that the activity occurs in New Zealand but there is no data or methodology available to derive an estimate of emissions. This can also apply to negligible emissions.

IEIncluded elsewhere: where emissions or removals are estimated but included elsewhere in the inventory. Table 9 of the Common Reporting Format details the source category where these emissions or removals are reported.

CConfidential: where reporting of emissions or removals at a disaggregated level could lead to the disclosure of confidential information.

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New Zealand’s Greenhouse Gas Inventory 1990–2006