Emissions target will have to rise later

August 10, 2009

Media Release

Business leaders: emissions target will have to rise later

The New Zealand Business Council for Sustainable Development says the Government's opening offer to reduce New Zealand's greenhouse gas emissions by 10 to 20% by 2020 will need to be improved during coming international negotiations.

The opening offer of 10% and up to 20% will put New Zealand into the international negotiations at Bonn this month, but the country will need to be more ambitious for the Copenhagen talks in December.

New Zealand's aim should be to get all major emitting nations into a comprehensive global agreement.

"We need a global solution to climate change. No single country can fix it. Offering 10% plus 10%, with conditions is an important first step in helping the world make progress. We need 20% minimum - and the potential to go higher again - to inspire other nations to take on the commitments needed," Business Council Chief Executive Peter Neilson says. "To fix it we need all major emitters engaged in the solution.

"If this is the offer for the Bonn talks in August we'll need a much better one by Copenhagen in December."

The Business Council also welcomes a statement by Climate Change Issues Minister Nick Smith at today's post-Cabinet media conference that the Government would proceed with an all-gases, all-sectors emissions trading scheme (ETS). The Minister said the Cabinet had made substantial progress with the ETS and its ambition was to have ETS details settled by Copenhagen (December).

Mr Neilson says certainty over the ETS would end investment blight caused by the review of the scheme which started last November.

Meantime, the emissions reduction target at its upper end of 20% falls short of what New Zealanders believe should be done. A July 27-31 ShapeNZ online survey of 2,251 people nationwide shows they are much more ambitious than the Government: 49% want the country to set a target of 20% or more. Only 16% want reductions of 10% or less.

"New Zealanders don't want to be seen as bludgers - they want to do their fair share," Mr Neilson says.

The Business Council*, which includes some of the country's largest enterprises, says one of the aims of developed countries proposing targets is to encourage high-emission developing countries, like India and China, into a new international agreement which effectively tackles climate change.

The business leadership group - whose 63 member companies' annual sales of $59 billion equate to about 43% of gross domestic product - says the best outcome for both the planet and New Zealand from the Copenhagen talks later this year will be "a very widely shared commitment" to reduced global emissions sufficient to stabilise climate change gases at 450ppm by 2050.

The International Panel on Climate Change's (IPCC's) 2007 Report suggests that stabilising emissions at 450 ppm will require developed Kyoto Annex 1 countries (including New Zealand) to collectively agree to reduce emissions by between 25% and 40% below 1990 levels by 2020, on the way to 80% to 95% reductions by 2050.

The Business Council advised the Government to offer a unilateral 20% reduction in its 1990 gross emissions by 2020, and offer a possible reduction of 30% or more by 2020, if international climate change treaty talks adopt proposals which put our trade-exposed industries on a fairer footing. (The detailed submission is here http://www.nzbcsd.org.nz/story.asp?id=1011 ).

Mr Neilson says while countries take a "responsibility" commitment expressed in gross emissions, it is our net emissions position that we have to pay the rest of the world for.

In New Zealand's case our 24% growth in gross emissions since 1990 is expected to be offset by forestry growth. So by 2018 to 2020 the net position is effectively zero.

This means the recommended 20% cut in gross emissions is effectively a 20% cut from a zero base.

The 20% target assumes that if we cannot achieve the total reduction domestically we will have to "buy" the balance internationally.

While there are expectations that countries will make an effort to reduce their own domestic emissions, the reason a global cap and trade system was proposed by the Americans was to ensure the least-cost way of reducing emissions can be achieved.

To achieve a 20% cut by 2020, the country would probably get 10% of this from forestry, at least 5% from efficiencies in energy, transport and agriculture, and - depending by how much we reduce - buy up to another 5% of emissions reductions from other countries.

In the United States, reducing acid rain, using a cap and trade scheme like New Zealand's emissions trading one, cost half what was expected.

Any delay in emissions reductions means bigger cuts will need to be made later at greater cost. That price will be fewer opportunities for our food exports and tourism.

ENDS

Note for Editors:

Latest polling on New Zealanders' emission cut target views is available at

http://www.nzbcsd.org.nz/story.asp?StoryID=1012

*As a leadership organisation the Business Council proposes well researched policies providing the best long-term solutions for New Zealand. Some member companies will have different positions and are free to advocate them.

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