Is 2,750 KT of Credit A Big Issue For New Zealand Agriculture?

Andrew D of the Physics Department at the University of Queensland has put much effort into his comments on my earlier post (please read them all).  He concedes that I have a point about the Kyoto rules but reckons I am overstating the case.  According to Andrew (I have asked him to explain this a bit more fully, and he has in his most recent comment) New Zealand’s 24,866 kt of methane emissions are produced from 2,750 kt of stored carbon.  That is carbon that has been absorbed by our pasture, but for which the agriculture sector gets no credit.

Would an 2,750 kt offset be significant for New Zealand agriculture?  I believe that it would, particularly when you remember what our Kyoto obligation is.  Our obligation is to restrict emissions to 1990 levels.

Many thanks Andrew for the effort you have put in on this.

In 1990 New Zealand emitted 22,413 kt of methane (CO2 equivalent).  In 2006 we emitted 24,866 kt of methane.  That is a 2,453 kt increase.  The 2,750 kt of offset that the New Zealand agriculture sector is being denied by the silly Kyoto rules would mean we have no carbon liability.

Looked at another way we need to buy credits to offset our methane liability.  At a cost of NZ$30 per credit x 2,453,000 we are required to buy credits worth $73,590,000 to offset our Kyoto methane liability.  I deem this significant particularly as the tax payer is currently set to meet the cost of any liability coming from agriculture (agriculture is not due to be part of the ETS until 2013).  I would much rather that $74 million was spent on something other than Russian AAUs.

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4 Responses to “Is 2,750 KT of Credit A Big Issue For New Zealand Agriculture?”

  1. Andrew D Says:

    Thanks for your thanks!

    While I am happy with the simple calculation I outlined given the assumptions, those assumptions have biological and political components that I am uneasy about and that would reward further research and greater thought. In fact I would hope that those with expertise in those areas have already thought about the many subtelties in assessing the impact of agriculture on GHG emissions, and the politics of limiting these emissions. If there is a southerly change I’ll try to do some research on that in coming days 🙂

    (By the way, how easy would it be to spend $74 million having diplomats litigate this kind of question?)

  2. Andrew D Says:

    By the way, wouldn’t you need to apply the same 11% discount to NZ 1990 methane emissions? That is to regard 1990 levels as being only 22,413-2465 = 19 948 kt CO2 equiv folllowing the same reasoning as for 2008?

    This means the proposed reduction in our liability is not roughly the growth of methane emissions since 1990 but about 11% of that.

  3. charlesf Says:

    THat would be a matter for negotiation. Yes, if the silly rules around forest planted before 1990 are changed.

  4. PaulL Says:

    Behind on the commentary, so I’ll put a few things on this post.

    Firstly, my discussion is entirely ignoring the questions of whether global warming is real, is measurable, or is human caused. I personally think the science is showing that those things are probably all true, but it is by no means certain. Like one of the commenters on kiwiblog, it seems to me there is enough risk to be worth doing something, so long as that something is measured and relatively inexpensive (which definition currently proposed measures don’t meet).

    Secondly, I think it makes much more sense to apply emission controls at the consumer than the producer. Why? The reasoning is a bit long.

    Kyoto was designed to work when everyone in the world participates. As soon as one or more countries choose not to participate, then you get leakage, and that leakage can substantially distort markets. If you can import steel from NZ, who tax at point of production the carbon content, or China, who don’t, then the Chinese steel will be much cheaper. Steel production will shift to China, with probably net more carbon emissions than before.

    I prefer a regime where any country or trading bloc can independently decide to do something. Attributing emissions to the country of consumption makes this much easier. It also has the side benefit of making clear the real carbon emissions of a country like Sweden (or one of those Scandanavian places) that claims to be carbon neutral because they exported their dirty industries.

    In terms of what I’d like to do about it, with minimum cost, I’d like to see NZ choose to control our total impact on world emissions independently of the rest of the world. We would apply carbon taxes at the border to imported product, and apply carbon taxes at source (oil, coal, farming) within NZ. We would refund those taxes on export.

    Over time, we would harmonise our regime with other like minded countries, and we wouldn’t refund tax on export to those countries, nor apply tax to imports from those countries. Give it long enough, and the whole world could play.

    Also, to provide some incentive for other countries to participate, I’d add about 15% to the estimated carbon content of any imported product that didn’t come from a country that had a reliable carbon measurement system. A little bit of trade protection, but also a way to make sure that places like China can’t just lie about their carbon content.

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