New Zealand has landed in a pickle over its forest accounts. The age structure of NZ’s plantations means that major harvesting is due to start late this decade and continue into the 2020s. Combine this with the new afforestation/reforestation debit-credit rule and the gains NZ wrangled in LULUCF look likely to evaporate – its carbon accounts skewed into the negative. ECO might even have a rare twinge of sympathy for NZ.
But ECO has no sympathy for New Zealand when it comes to gross emissions. They’ve continued rising since 1990 and are projected to continue rising, even with its much-talked-about-but-rather-weak Emissions Trading Scheme.
Worse, having agreed in Cancun that developed countries should write a low carbon development plan, New Zealand is showing no sign of writing one. It certainly has no plan to get gross emissions on a downward trajectory.
Instead New Zealand is planning just everything possible to increase emissions: dairy farming expansion, unprecedented levels of coal mining, a major road building programme, more oil and gas exploration, and, to cap it all (no pun intended) off, the state owned mining company wants to dig up 1.5 billion tonnes of lignite and turn it into fuel and fertiliser.
It’s no wonder New Zealand wants rules for setting QELROs that would enable it to meet its 20% by 2020 target and end the second commitment period with over 22 million spare AAUs – a tidy sum for a small country.
So, where does all this leave New Zealand’s decisions on CP2 of Kyoto, its 2020 target and its QELRO? NZ is quietly desperate to accommodate its planned increase in gross emissions and expected blow-out in net emissions. With no intention of actually reducing gross emissions, NZ’s only course of action is to play with the accounting system. This means trying to ensure maximum carry-over of surplus AAUs from CP1 to CP2, securing access to the cheapest carbon credits possible (euphemistically “full recourse to carbon markets”) and a handout of AAUs from new accounting rules.
It looks like New Zealand’s decision on CP2 will depend on who New Zealand wants to be friends with and whether the accounting system is sufficiently favourable. Failing to meet a voluntary commitment under the Copenhagen Accord has political consequences, but failing to meet a binding commitment under CP2 has political and economic consequences. So no surprises then that New Zealand has not submitted its QELRO, is focused on the accounting and has also created an impossible hurdle (see the demand for a "balancing agreement" in its recent submission) in case an excuse is needed to bail from the Kyoto ship.