Where to now for Government climate negotiations?

Gareth MorganEnvironment1 Comment

Yesterday we revealed the Government’s covert plan to cook the books – by changing the accounting rules for forestry they planned to mask our growing greenhouse gas emissions. It appears that they were trying to slip this through under the radar of international negotiations, which seems unlikely now that the plan is out in the open. So what options does the Government now have at the Marrakesh climate negotiations?

Cooking the books

In case you missed yesterday’s news, the Government has a covert plan to cook the books to cover up our growing greenhouse gas emissions. The plan hinges on changing the way that carbon stored in plantation forests is accounted. As long as the forest is replanted then it stores a certain amount of carbon over the long-term, but on top of that there is a growth and harvest cycle where carbon is temporarily stored and then released. The current accounting rules follow this cycle, so we receive all the credits while the forest is growing and then have to pay some back on harvest – it’s more akin to piling up debt on your credit card. New Zealand has been doing this for years and we’re due to pay all that debt back in the 2020s. Bummer.

Under its plan to change the forestry accounting rules in 2020, the Government would get to keep all the carbon units we have received, without having to pay any back – in other words get its liability cancelled. This would wipe an estimated 79 million tonnes of greenhouse gas emissions off the books – about one year’s worth for the country.

This accounting trick is neatly summarised by the gif above.

This means that New Zealand’s current 2030 commitment would not in fact be a progression on past emission undertakings at all, violating a key principle of the Paris Agreement. We would have continued on our merry way as we have since 1990 increasing our emissions year after year. The risk of NZ being allowed to get away with this change in the foresty rules is that it sets a harmful precedent that could undermine global climate change efforts. What’s good for the goose would see the gander of other participants all clambering for similar ‘get out of jail free’ cards.

To account for the impact of the rule change, our analysis indicates the Government’s current target of -11% on 1990 levels must be increased to a 30% reduction. Otherwise we are yet again rorting the world’s attempts to reduce emissions (remember all the fraudulent foreign credits we pigged out on, until the global community barred us from trading?).

Government response

Yesterday the Climate Change Minister Paula Bennett initially sidestepped questions, deferring to the Ministry for the Environment (MfE) instead. The Ministry wouldn’t comment on our findings, saying that negotiations are underway and none of the details are settled as yet. Later in Parliament Minister Bennett continued this line, and added There are other consequences of doing it [the change in accounting approach], which I freely admit, and that is part of the work that is going on at the moment.”

In other words the issue we have raised is correct, and no attempt has been made to dispute the numbers. Other than that, officials and the Minister are hiding behind the excuse of “nothing is decided” until the negotiations are over. But New Zealanders have a right to know our negotiating position, particularly given we’re up to our old tricks again of cheating our way out of the Paris Agreement principle of progression before it has even begun.

Against the backdrop of this reality there were a few gems in the government’s answers yesterday. MfE did say that New Zealand was committed to “ensuring that our approach to forestry has environmental integrity”. Sounds good, although it’s a bit of a fob off. Minister Bennett gave this response to a question from Dr Kennedy Graham: 

Dr Kennedy Graham: If the Government were to succeed in getting these preferred rules accepted and then implemented the proposed accounting rules, would it make its 2030 climate change more ambitious in order to compensate?

Hon PAULA BENNETT: It would depend, as I have said, on what those rules end up being and on what the transition is, but certainly all of that will be made transparent and, I am sure, will be openly debated. [emphasis author’s]

If that is the case, why is there so much secrecy at the moment Minister? The Government’s original plan appears to have been to sneak these new rules in under the radar, but that will no longer be possible, with other countries wise to the ruse. Of course the Minister may not have been aware of that tactic. Like the fraudulent credits scandal, this is looking more like another chapter of indefatigable efforts to rort the system the Minister has inherited from her predecessor, Tim Groser.

Actions speak louder than words. If the Minister is going to live up to her rhetoric about getting real on climate change, and the Ministry for the Environment wants to honour their promise of environmental integrity, they need to heed the recommendations in our report. Let’s look at our Government’s options for the negotiations taking place in Marrakesh over the next two weeks.

Transparency please?

First up, the Minister and Ministries seem like they are trying to keep everyone in the dark until the rules have actually been set. So they’ll countenance debate only after the event. That suggests very strongly that they will not compensate for the forestry rule change by lifting the emissions reduction target for 2030 from 11% to 30%. New Zealanders deserve to know the substance of the commitments our Government is making on climate change before they are signed. If we are going to have a transparent discussion as Minister Bennett asserts, it must be now not after the rules are set. All that will do is confirm New Zealand has cheated, yet again.

Dump the Junk

Rather, what we expect the Government to do is use the surplus credits available as at 2020 to cover the accounting change. But as we have argued previously to recover any modicum of honesty and respectability in our policy we need to cancel any credits we have in store, to the extent they came about via our past dealings in cheap, fraudulent foreign credits from Russia and the Ukraine.

Raise the 2030 Target

But if there’s real commitment to ensuring environmental integrity as the Minister is declaring, they need to do as we have suggested – compensate for the emissions that would be wiped off the books, by increasing the 2030 target commensurately. We need to raise the target to a 30% reduction on 1990 levels by 2030. That would equate with an 11% reduction using the current accounting approach.

Readers need to appreciate, this challenge of reducing emissions has been no harder for New Zealand than it has been for other countries. But because we have done nothing for the past 8 years, that inaction is catching up with us. We need a plan to actually reduce emissions, and quickly. Our inaction to date is going to cost this country more than it would have if we had already acted instead of cheated.

Where to now for Government climate negotiations? was last modified: November 3rd, 2016 by Gareth Morgan
About the Author
Gareth Morgan

Gareth Morgan

Facebook Twitter

Gareth Morgan is a New Zealand economist and commentator on public policy who in previous lives has been in business as an economic consultant, funds manager, and professional company director. He is also a motorcycle adventurer and philanthropist. Gareth and his wife Joanne have a charitable foundation, the Morgan Foundation, which has three main stands of philanthropic endeavour – public interest research, conservation and social investment.