Climate Change & New Zealand’s Emissions Trading Scheme

Whether you buy into the concept of climate change or not, scientists are apparently detecting that the earth’s climate is gradually becoming hotter and more variable. According to studies, this is due, in part, to increased levels of carbon in the earth’s atmosphere. Human activity since the industrial revolution which gave rise to mass centralised population , such as driving cars, farming and deforestation, produces what are known as ‘greenhouse gases’ because they gather in the earth’s atmosphere and ‘trap’ the sun’s heat on the planet.

If in fact climate change is taking place, scientists say that the greatest impact for New Zealand would be on our water resources with higher rainfall in the west, less in the east and an increase in extreme weather events such as droughts.

The New Zealand government signed and ratified the United Nations Framework Convention on Climate Change in 1993 whose international conferences have led to the adoption by many countries of the Kyoto Protocol. This is essentially a legally binding agreement which obligates its parties to reduce their greenhouse gas emissions.

New Zealand’s Emissions Trading Scheme is the government’s instrument designed to assist with its international obligations by placing a cost on the emission of greenhouse gases. This cost is intended to provide an incentive to reduce emissions across New Zealand’s energy; industrial, solvents; agriculture; waste and forestry sectors of the economy.

An Emission Unit (known as an NZU) is required to cover every two metric tonnes of greenhouse gas emissions in a calendar year until the end of 2012, after this date the ratio will be 1:1. New Zealand’s Climate Change Response Act 2002 legally obliges participants in the above industries to acquire NZUs proportionate to their emissions.

The Agricultural sector, which is such a strong economic driver in North Otago, is said to make up approximately half of New Zealand’s emissions. It is not compelled to enter into the ETS until 2015, however forestry and industrial are already obliged.

In a recent report on the operation of the ETS in New Zealand, the climate change minister Nick Smith indicated that its implementation has gone smoothly; New Zealand is now on target to meet its Kyoto Protocol targets; greenhouse gas emission reduction is taking place and new investment in forestry and renewable energy sources is gathering momentum.

It seems that going green is working, although you couldn’t convince our dear neighbours of that, whose minerals industry has recently introduced a $10m advertising campaign to build anti ETS sentiment in the hope that Australia’s version is defeated.