12 October 2004

Business accolade for government climate change programme

A Ministry for the Environment (MfE) programme to award tradable emissions units to businesses, individuals and other organisations tackling climate change has won the Supreme Award at this year’s BearingPoint Innovation Awards.

The Projects to Reduce Emissions programme is administered by MfE's Climate Change Office. Through it, units are awarded to projects that will lead to a net reduction in the emission of greenhouse gasses over business as usual that make a successful application through a tender process, the second round of which closes this Friday. Ten million units have been available through this process to date.

The BearingPoint Innovation Awards recognise and promote world-class innovation in service to the public and in organisational management in the public sector. They are jointly sponsored by BearingPoint and the Institute of Public Administration New Zealand (IPANZ). This year's winners were announced last night in Wellington.

Judy Lawrence, Director of the New Zealand Climate Change Office, accepted the Supreme Award on behalf of the Projects to Reduce Emissions team.

“The Project to Reduce Emissions programme has already proven to be a winner among businesses. Many New Zealand businesses are reaping the benefits to their bottom line of doing something positive to tackle climate change and increasing their competitiveness as a result," says Pete Hodgson, Convenor of the Ministerial Group on Climate Change. "I am delighted that this innovative Climate Change Office programme has now been recognised through receiving this business sponsored award."

“I congratulate the New Zealand Climate Change Office on this award. It’s great to see work within the public sector that leads to significant benefit to the environment and the economy, being recognised in this way.”

As winner of the Supreme Award, the New Zealand Climate Change Office is now eligible to compete in the Commonwealth Association of Public Administration and Management (CAPAM) Innovation Awards.

Questions and Answers

What is the Projects to Reduce Emissions programme?

The Government has developed the Projects to Reduce Emissions programme to support initiatives that will reduce emissions of greenhouse gases. The programme is a key plank in the Government’s climate change policy package. This Projects first tender round was run in 2003 and offered a pool of four million emissions units or “carbon credits”. Businesses, organisations and individuals were invited to submit proposals for projects to reduce emissions of greenhouse gases in return for a share of the pool of emission units. A second tender round with six million emission units on offer opened on 30 August 2004. It will close on 15 October 2004.

What are Projects?

Projects are a domestic mechanism incentivised by Kyoto Protocol emissions units. For an initiative to qualify as a project it must achieve quantifiable reductions in greenhouse gas emissions that would not otherwise occur. It must also be additional to “business as usual”, i.e. the project owner must prove that without the award of emission units the project would not otherwise proceed.

What is an emission unit or “carbon credit”?

An emission unit is equivalent to one tonne of carbon dioxide (or its equivalent in other greenhouse gases) that would otherwise have been emitted into the atmosphere. Emission units are effectively tradable allowances for greenhouse gas emissions. Each country with targets under the Kyoto Protocol must hold sufficient emissions units to match its emissions during the first commitment period of the Protocol. International markets for carbon trading are developing and project owners are able to sell their units on this market.

How much is an emission unit worth?

The international market sets the price for emission units. Last December, Meridian Energy’s Te Apiti wind farm, one of two early projects the Government supported, was offered a contract to sell its emission units to the Netherlands Government. This involved the first international sale of New Zealand’s Kyoto credits. The average price for the tender round in which Meridian Energy agreed to sell its units to the Netherlands Government was NZ$10.50 a unit. Emerging prices under the European Union Emissions Trading Scheme also provide indications of what emission units are currently worth.

What other projects have been awarded emission units in the Projects to Reduce Emissions programme?

Twelve other successful projects have been announced. They are: Fire-Logs New Zealand Limited’s proposal to produce wood pellets from waste sawdust for domestic and industrial use. Watercare Services Limited’s proposed staged installation of hydro energy turbines at three water supply dams in the Hunua Ranges and a bypass channel in the Waitakere Ranges. New Zealand Refining Company’s proposed electricity and steam co-generation plant at the Marsden Point refinery Southern Paprika’s proposed bio-energy plant to heat glasshouses. TrustPower’s proposed enhancement of an existing hydro generation scheme at Waipouri. TrustPower’s proposed enhancement of an existing hydro generation in Taranaki. Te Rere Hau Windfarm, New Zealand Windfarms – a proposed 50 megawatt wind farm in Manawatu. Toronui Mini-Hydro Power Scheme, Esk Hydro Power – a proposed mini-hydro scheme on the Pask family’s Toronui station in northern Hawkes Bay. Awapuni Landfill, Palmerston North City Council – a proposed scheme for generating electricity from landfill gas. Wainui Hill Wind Farm – a proposed wind farm of up to 30 megawatts on Wellington’s Wainui hills. Genesis Hau Nui Wind Farm, Wairarapa – a proposed five megawatt extension of the existing wind farm. Genesis Awhitu Wind Farm, South Auckland – a proposed wind farm of 19 megawatts on the Awhitu peninsula.

Details of the remaining two projects awarded emission units in the first tender round will be announced in due course.

What is the status of the Kyoto Protocol?

More than 120 countries have ratified the Kyoto Protocol, including the member states of the European Union, Canada, Japan, Norway, Iceland and a number of Eastern European countries. The Kyoto Protocol will enter into force if 55 countries (including developed countries that were responsible for 55 per cent of developed-country carbon dioxide emissions in 1990) ratify the Protocol. Russian ratification is the key to entry-into-force. On 30 September, the Russian cabinet approved ratification of the Kyoto Protocol and sent it to the State Duma or lower house of the Russian Parliament. The Duma is expected to debate ratification this month.

What happens if the Kyoto Protocol does not enter into force?

If the Kyoto Protocol does not enter into force the Government’s agreements with project owners will automatically be terminated.

ENDS

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