Climate Change Minister Tim Groser announced at the beginning of November that New Zealand will not be signing up to a CP2 under the Kyoto Protocol after the current commitment period expires at the end of this year. This means that New Zealand has decided not to be bound by mandatory Kyoto obligations for a further period, so that it has greater flexibility in how it sets out to achieve its greenhouse gas emissions reduction objectives in the immediate future. Instead of committing to CP2, the Government has stated its intention to set new targets under the broader, non-binding United Nations Framework Convention on Climate Change (UNFCCC), which the Minister says will align New Zealand with the climate change efforts of developed and developing countries which collectively are responsible for 85% of global emissions, including the United States, China, India, Canada, Brazil and Russia.
The Minister's announcement about CP2 was made the same day that the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill ("Act") passed its third reading in the House and received a Royal asset on 13 November 2012. The Act amends the Climate Change Response Act 2002 to extend the current transitional period which protects domestic GHG emitters from full obligations under the NZ ETS. Specifically, the Act extends (with no specified end date):
- the current one-for-two surrender obligations (half-price trading) for ETS participants (other than those in the forestry sector);
- the price cap for carbon of $25 per NZU; and
- the exclusion of biological agricultural emissions from surrender obligations.
These moves are somewhat unsurprising given the Government has consistently voiced concern as to the effect climate change obligations could have on the economy, but they do remain highly controversial. Greenpeace says New Zealand is turning its back on the Kyoto Protocol "to join an infamous club of the world's dirtiest economies and most belligerent climate wreckers" and the Green Party recently accused the Government of "the moral crime of ecocide". For more detailed discussion on the changes, please see our recent climate change update here. A more comprehensive analysis, including of how these changes relate to and affect resource management, can be found in the upcoming Resource Management Bulletin (Volume 9, Issue 16).