Friday, March 23, 2007

Climate change: miscalculations

The Sustainability Council's Simon Terry has a piece in the Listener this week on the failure of New Zealand climate change policy [PDF]. While the thrust of the article is a call for our major polluters - farmers - to pay the full cost of their emissions rather than dumping it on the taxpayer, a significant portion of it explores the history of the 2005 Kyoto shock, when we discovered that we would miss our Kyoto target by 36.2 megatonnes of CO2-equivalent. After exploring government cabinet papers, Terry blames two things for this. The first was an over-estimate of our baseline, which saw our Kyoto assigned amount shrink by 15% in 2001. The second was government policy failure:

the government programmes supposed to reduce total emissions by 10% turned out on closer examination to be worth 0%... the inconvenient truth was that all the announced steps the Environment Ministry had for the past three years sworn were going to make a meaningful difference to New Zealand's emissions were assessed to have no measurable effect.

The programmes in question were those of EECA and the National Energy Efficiency and Conservation Strategy, which were expected to save 21 MTCO2-e over the first Commitment Period. And the reason for this total failure seems to have been systematic underfunding by the government. A 2002 cabinet paper [PDF] noted that in order to deliver the projected reductions from energy efficiency,

EECA estimates additional funding increasing from $4.6 m per annum to $25.7m in 2006/07 will be required. $4.6m is being sought in the 2002-3 budget to commence funding of this work." (p. 11).

Actual funding lagged well behind this. According to the 2002 estimate of appropriation for Vote: Energy Efficiency and Conservation [PDF], EECA's budget increased by just over $1 million between 2002 and 2003 - a quarter of what was needed. In 2003 [PDF] it was raised to $13 million, and in 2006 [PDF] it was at $21.1 million, just over half of what was believed to be necessary. In short, the government banked on emissions reductions - but then did nothing to bring them about.

But that's not the whole story. There's a second major failure Terry doesn't notice: bad data on forest plantings leading to a false sense of security about our net position. All through the 90's, and right up until 2005 policy was founded on the belief that there would be more than enough trees to counter any rise in emissions, and that therefore there was no hurry to impose real policies to reduce emissions. This belief was founded on projections of high forest planting rates extending well into the future. And those projections were systematically wrong.

The table below compiles data from the Ministry of Agriculture and Forestry's 2005 National Exotic Forest Description [PDF], and the Ministry for the Environment's 1994 [PDF], 1997 [PDF] and 2001 [PDF] national communications under the UNFCCC. All figures are in hectares.

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Actual plantings 73,900 83,600 63,700 51,200 40,000 33,600 30,100 22,100 19,900 10,600
1994 estimate 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000
1997 estimate 70,000 70,000 70,000 55,000 55,000 55,000 55,000
2001 estimate 40,000 40,000 40,000

It should be clear from the above that the New Zealand government has been basing its climate change policy on bad data from the beginning. This has, to use Terry's words, undermined minister's ability to make appropriate policy and blown away much of the lead time we had to make changes. Instead, we spent a decade sitting on our thumbs, secure in the belief that the problem was already solved (while of course taking no steps to ensure it would be).

Someone at MAF needs to be held accountable for this. Unfortunately, given the timespan involved, the people responsible have almost certainly left to become consultants.


"Someone at MAF needs to be held accountable for this"

Yes i am sure that is going to happen - just like all those people at corrections have been held accountable over recent weeks

Posted by Anonymous : 3/23/2007 03:33:00 PM

the government should care about reductions in surplus just as much as it cares about reductions in deficit because it is all agregated in a national deficit/surplus anyway. (and on the other side is agregated in incentives for carbon reduction)


Posted by Anonymous : 3/24/2007 08:03:00 AM

GNZ: Caring about reductions in surplus would entail actually doing something about the problem - and the existence of a surplus was used as an excuse to avoid doing anything of the sort.

Yet another example of how people are not economists.

Posted by Idiot/Savant : 3/24/2007 11:34:00 AM

Hmm, the insiders I spoke with said that there was always a huge uncertainty with the forestry and emissions data and that was indicated in reports. But the politicians chose to ignore the uncertainties and cherry pick the data that best supported their policies.


Posted by Anonymous : 3/26/2007 10:46:00 AM

Insider: well, there's huge uncertainties about how much a tree is worth - but that's a different question. This is a consistent overestimate of how many trees there will be, and based on when various data is released, I think they certainly could have known at the time that those planting rates had not been seen in years.

I'll be doing more poking into this. This sort of persistent long-term policy failure needs to be explored, so it isn't repeated.

Posted by Idiot/Savant : 3/26/2007 11:37:00 AM

As I understand it, it has been systematic changes by this government that have reduced plantings. e.g. Re-nationalisation of forests, tax dis-incentives to forestry, high exchanges rates forcing pulp & paper production off-shore.
Do we want to produce our own food here at a carbon cost, or are we happy to buy in food from coutries that don't care about carbon?

Posted by Anonymous : 3/30/2007 02:36:00 AM