NZ Emission Trading Scheme:

1. NZ Emission Trading Scheme: How agriculture, horticulture & forestry will cope with what is required Green Party Viewpoint Kennedy Graham, MP NZIAHS Forum, Lincoln University, 22 August 2012 Authorised by Kennedy Graham, Parliament Buildings, Wellington.

2. Overview I. What is required (globally; nationally)? II. Coping (nationally) - NZ ETS • III. Agric., hortic., forestry ‘coping’ IV. Other countries ‘coping’

3. I. What is required? • Not just problem of climate change - Ecological crisis • E.F. crossed Earth-share (= bio-prod. capacity pc) in 1981; • overshoot: 18% in ’92; 50% in ‘10. • Over-consuming planet’s resources • = permanent ecological theft from the next generation. • US lifestyle sustainable population = 2.2 b. [2012 = 7 b., 2050 = 9 b.] • Biodiversity loss = 100 - 1000 times above natural rate. • GHG emissions rising = ‘dangerous anthrop. interf. with climate system’ MGT (13.9°C) + 2°C (difficult) to +6°C (intolerable).

4. Global Ecological Crisis

5. What is required (focusing only on climate change) • 1992 UNFCCC Objective: • stabilisation of GHG concentrations in atmosphere at level avoids dangerous anthropogenic CC • 2010 Cancun COP-MOP • UNFCCC objective = + 2°C (MGT) above ore-industrial level (1750) • [0.8°C already; 0.7°C committed = 1.5°C certain = 0.5° left] • = 450 ppm concentration • Global carbon budget (80% prob. of + 2°C) • Potsdam: 565 Gt. Further GHG emissions • WWF: 1990-2100 GCB = 1600 Gt CO2e (net); • 2009-2100 = 870 Gt.; = 9.5 Gt /yr. (=20% of current) • Known global fossil fuel (FF) reserves = 2,795 Gt. • Therefore: • To avoid dangerous Cl.Ch. = can extract / emit only 20% FF reserves • = switch to low-carbon econ. (betw. 2030 – ‘50)

6. What is required (focusing only on climate change)

7. Current global emissions profile World Resources Initiative (2009)

8. What is required (focusing only on climate change) – NZ NZ 5th Comm., Table 5.1 (2009) / Review Panel Report (2011)

9. Responsibility Target NZ Voluntary Pledge: 20202050 52 Mt. 30 Mt. 15 % 50 % (below 1990 levels) From 77 to 52 (33%) in transition period 2012-20: through (KP2?): (a) emission cuts (b) net removals (LULUCF) (c) international credits From 77 to 30 (61%) in ‘global legal agreement’ (LCA) 2012-50 NB: NZ pledge = inadequate for ‘global emissions gap’

11. NZ Sectoral Analysis

12. ETS – Outline

13. ETS – Latest Development Climate Change Response (Emissions Trading and Other Matters) Amendment Bill

14. ETS – Latest Development Conclusion: 2009 weakening of a weak ’08 Act, further weakened by 2012 Bill = will not meet the test of ‘what is required’

15. The 2012 Bill • Objectives: • Ensure ETS ‘more effectively supports NZG economic growth priorities’ • ETS flexibility for transition (2013-20) • Improve ETS administration • Change current treatment of synthetic gases • Primary Measures: • Maintain 1 for 2 surrender obligation beyond 2012, indefinitely • Maintain $25 price cap, indefinitely • Agriculture: defer indefinitely • Forestry: (a) offsetting for pre-Kyoto foresters • (b) Claw back 2nd tranche of allocation to pre-Kyoto foresters

16. The 2012 Bill • Primary Measures (cont.): • Allow auctioning on NZUs allocated, or covered under a future global agreement • Extend ban on export of NZUs (except foresters) • Remove requirement to ‘back’ all NZUs issued, with a Kyoto unit • Align NZ-ETS with latest international-accepted GWP potentials (forcing metrics) • Remove ETS obligation on imports of synthetic GHGs (SGGs) & substitute levy (cars; goods) • Other measures pertaining to SGGs

17. Other Countries ‘Coping’ - Sweden • EU Target = 20 %Sweden = 40 % reduction in national emissions not covered by the EU scheme9% drop in gross emissions from 1990 to 2007 and average economic growth of 2.3% per annum when New Zealand’s growth of 3.1% over that period was based on a 30% increase in gross emissions • Might the reason be that Sweden has, to quote its Government, “succeeded in breaking the link between economic growth and greenhouse gas emissions” – that is, succeeded with decoupling when New Zealand demonstrably has not?

18. Other Countries ‘Coping’ Sweden, Ireland, NZ (1990-2007) Sweden Ireland NZ Gross emissions- 9% + 25% +30% (agric. emissions) - 10% - 7% +16% Economic growth +2.3% +3.1% Dairy herd -34% ‘reductions’ +45% “Sweden has broken the link betw. econ. growth & GHG emissions.” = decoupling Measures carbon tax ETS mkt. pr. (NZ$175) ($5) Targets (2020)EU = 20-30% EU = 20-30% Sweden = 40% 10-20%

19. Ireland – Agriculture Measures • Methane & Nitrous Oxide Reductions • Single Payment Scheme • Rural Environment Protection Scheme • Organic Farming (1% agricultural land; target = increase 5% p.a.) • Cross-compliance • Disadvantaged Areas Compensatory Allowance Scheme • Lower Slaughter Age • Commonage Framework Plans • Animal Husbandry • Animal Diet Research • Manure Management & Agricultural Soils • Legislation • Nitrates Directive • Anearobic Digestion • Bio-energy

20. Green Policy • Target: 40% reduction (2020/1990) = 48.0 Mt. • 36.2 Mt. from domestic • Electricity 5.3 • Industry 1.9 • Transport 4.7 • Agriculture 2.7 • Dairy stocking rate 2.2 • NO reduction (sheep, beef) 0.5 • Forestry • 25,000 ha/y pine/exotics 10.1 • 5,000 ha/y indigenous 0.8 • Pest control (219,000 DOC) 8.7 • Pest control (priv. indig.) 2.0 • 21.6