Hon David Parker
Minister Responsible for Climate Change Issues

20 September 2007 Media Statement

Updated emissions balance reinforces need for action

Climate Change Minister David Parker says the latest projection for New Zealand’s carbon balance for 2008-2012 reinforces the need for the substantial climate change initiatives the government announced today.

The Minister released the projected balance for the first commitment period of the Kyoto Protocol at the same time as the government announced an emissions trading scheme, which he said would have a significant impact on the balance.

The balance, also known as the net position, is estimated at a deficit of 45.5 million tonnes of carbon dioxide equivalent (Mt CO2e). This is an increase of 4.3 Mt CO2e over last year’s estimate of the Kyoto deficit of 41.2 Mt CO2e.

Mr Parker said the main factors behind the rise in the estimated deficit were projected increases of 4.3 Mt CO2e of emissions from the agricultural sector, 1.5 Mt CO2e from the energy sector and 1.3 Mt CO2e from the transport sector. These increases are offset by an upwards revision of New Zealand’s Kyoto allowance of 1.9 Mt CO2e.

The projections reflect the government’s agreed policies up to April 2007.

“These projections show that unless we change our economy and our society so that we use our resources more sustainably, and reduce our greenhouse gas emissions, our impact on the environment continues to climb,” David Parker said.

“The government has taken this projection into account in formulating the policies we are announcing today.

“I am confident that we can nearly halve this projected deficit to 25 Mt or less, through the implementation of an emissions trading scheme, and associated initiatives.”

The Ministry’s net position report (Projected balance of emissions units during the first commitment period of the Kyoto Protocol) is published on its website at www.mfe.govt.nz. Specific emissions data for each sector are published by the agency responsible, for example, energy and industry emissions are available from the Ministry for Economic Development.

The Treasury’s latest price estimation for Kyoto compliant emission units calculates a likely cost of carbon of US$11.90, (NZ $15.48 at 30 June exchange rates). The report is available on Treasury’s website at http://www.treasury.govt.nz/kyotoliability/.

Using the updated net position and carbon price, the valuation of the Crown’s projected liability under the Kyoto protocol as at 30 June 2007 is $704 million (unaudited). The audited figure will be released with the Financial Statements of Government in early October.

ENDS

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