Climate change update – debrief on COP21 Paris and what it means for you

16 February 2016

With submissions on the Emissions Trading Scheme due on 19th February, Emily Dowding-Smith, SBN’s resident climate change geek, takes a look at COP21, what New Zealand advocated for and what it means for your business.

Over the next couple of years there will be changes to policy and law on climate change in New Zealand, some of which stems from the Paris Agreement. Right now the Government is reviewing the New Zealand Emissions Trading Scheme and submissions on priority issues are open until this Friday 19 February. It may be relevant for your business to make a submission.

SBN attended the Ministry of Foreign Affairs and Trade debrief on the Paris Agreement which came out of COP21 in December 2015.  Below I outline for you what New Zealand advocated for so you can keep an eye on where our climate change policies and laws are heading.

What was COP21?

The United Nations Framework Convention on Climate Change (UNFCCC), 21st session on the Conference of Parties (COP) occurred in early December 2015 in Paris, France. Strong French diplomacy and hosting, hard work in the build up to the main conference, along with strong political will internationally (especially following the attacks in Paris), are all credited with having a role in forging a successful agreement.  It is still early days and much work needs to be done to put the high level international agreement into the domestic legal system.

What happened?

The outcome of COP21 was the Paris Agreement, with the following targets:

  • A global goal holding temperature increase to below 2 degrees above pre-industrial levels, with parties agreeing to make efforts to keep it below 1.5 degrees.
  • Economy wide reduction targets with an end point target. Full details can be found here.

The targets will be reviewed or renewed every five years. Countries have different target years of 2020 or 2030 and eventually we will transition to an agreement that is across all parties with synchronised dates for those targets. This will take time.  

Financial support has been pledged for developing countries and the intention is that over time and with this financial support, those countries will become better able to report on the requirements stipulated in the agreements.  Reporting on targets is key to the success of the agreement, but countries don’t all have the resources to do so.

What is New Zealand’s position?

New Zealand’s target is to reduce its greenhouse gas emissions to 30% below 2005 levels by 2030.  Our national targets are set out in a document called the Intended Nationally Determined Contribution (known as an INDC).  All countries taking part in the UNFCCC process lodge these goals. New Zealand lodged that with UNFCCC in July 2015. The full report can be found here.

What are the key areas for New Zealand?

The Ministry of Foreign Affairs and Trade debrief focused mainly on carbon markets and land use.  These are the two main areas that New Zealand advocated for in Paris. They were both included in the final version of the Paris Agreement.

  1. Carbon markets

New Zealand was a strong advocate for the inclusion of carbon markets as a means of reducing emissions. These are markets created from the trading of carbon emission allowances. The idea is to encourage or help countries and companies to limit carbon dioxide (CO2) emissions.  Carbon emissions trading is a way of reducing greenhouse gas emissions produced by polluters.

In Paris around 50 countries talked about the use of carbon markets and a willingness to engage in global carbon markets. Leading up to the agreement it was thought carbon markets may not make it into the final document because they are controversial. However, in the end there was an entire article in the Agreement included, which New Zealand sees as a win.  The strong stance New Zealand took internationally on this, coupled with the review of the Emissions Trading Scheme (ETS), sends a signal to businesses that New Zealand plans to continue with emissions trading.   

It’s important to note that the inclusion of carbon markets was a divisive issue as many countries consider that there should be non-market based mechanisms used to reduce impact of climate change on the environment (e.g. Venezula and Bolivia).  What that means in practice and what those non-market initiatives are is still unclear.  

  1. Land use (agriculture and forestry)

The second main point New Zealand wanted in the agreement related to land use.  Again it was seen as a win. Agriculture has always been a sensitive topic for both developing and developed countries. This is largely due to the scale of the agriculture: developing countries tend to have smaller scale or subsistence agriculture and women as the back bone of their agricultural systems, with fewer resources and therefore fewer emissions due to the type of farming.  Developed countries (like New Zealand) tend to have large scale industrial agriculture as a part of their economy, which has a stronger impact on greenhouse gas emissions through the inherent larger energy use, pesticide and machinery inputs and the types of crops or animals grown. It is very difficult therefore to have common intentions around a topic like agriculture with such different backgrounds.

In Paris, discussions honed in on useful hooks for agriculture such as the references to the importance of food security and ensuring food production is not compromised or threatened as countries transition to a low carbon economy. However what that means in practice remains unclear.  What we do know, however, is that agriculture is clearly included in the Paris Agreement. It remains to be seen what New Zealand plans to do in order to mitigate or reduce these emissions, aside from research into reducing burping from cows.

What do the carbon markets and the Emissions Trading Scheme mean for my business?

The review of the ETS may have implications for your business, depending on whether you trade in carbon or you plan to do so.  It is important to know that there are also voluntary options out there which mean you don’t have to sign up for the ETS.  You can always voluntarily offset your emissions, for example through great initiatives like Ekos or Million Metres.

When will this all take place?

Nothing is really going to happen right away. The Paris Agreement opens for accession in April 2017.  This is when States can become a party to the treaty (same legal effect as ratification). Once the New Zealand Government has ratified the treaty it still has to get through our domestic Parliament processes in the House of Representatives, including going through the Select Committee procedures before it can even be passed into law.  This also takes some time. 

So it will be a matter of keeping an eye out for the public submissions when they come up if you have a firm stance either way.  The indications given by Government are that the post-Paris work programme will take a few years. Paris is seen as a milestone but we are still a long way off working out the nuts and bolts of how to make these intentions a reality.

Emily Dowding-Smith, Transformation Leader, Restorative Food and Water