Introducing the Kyoto Escalator: did anyone sign the protocol in good faith?

By Mr February 29/06/2012

Simon Johnson introduces the Kyoto Escalator chart (inspired by the Skeptical Science Escalator chart) and argues that New Zealand was just as complicit as the major European countries in negotiating the Kyoto Protocol so that it could be complied with while gross and net emissions continued to increase.

New Zealand's Gross net and Kyoto greenhouse gas emissions 1990 to 2012

The Kyoto Escalator: New Zealand’s Gross greenhouse gas emissions (blue) increase by 19%; Net emissions (brown) increase by 23% and ‘Kyoto’ emissions (red) are less than average 1990 gross emissions.

Professor Dave Frame is the new director of the Climate Change Research Institute at Victoria University of Wellington. He is a University of Canterbury-trained scientist who has worked for some years in Britain. He has just joined the climate change fray with a very interesting opinion editorial “International focus needed over climate” in the Dominion Post. Welcome to climate change issues back in New Zealand, David.

Frame notes that New Zealand does not want to be thought of as the country that reneges on international treaties.

“Reputationally, accepting commitments and then failing to deliver on them is not a look New Zealand likes. “Doesn’t honour the treaties it’s signed” is not one of the few sentences we want people to remember about us.”

So, yes, I agree, New Zealand should honour the treaties it signs. I hate to nitpick, but isn’t New Zealand a country that is remembered for a treaty that we didn’t honour? Is our record on international climate change treaties any better?

Frame goes on to describe some of the different motivations underlying the negotiations that lead to the Kyoto Protocol.

“…the Kyoto Protocol was a no-win situation for places like New Zealand. In the 1990s Britain and Germany were reducing their emissions of greenhouse gases for non-climate-related reasons (declining manufacturing and the collapse of the coal industry in Britain; technological substitution in the case of post-reunification Germany).”

“Kyoto’s structure, reductions of emissions by some specific fraction compared with 1990 levels, were designed with this in mind, since it allowed Europe to appear to “take the lead” without actually doing anything very different from what they were going to do anyway. It was an approach so clearly aligned with the near-term reputational interests of some stakeholders that the Nobel prize-winning strategist Tom Schelling wrote of it: ‘I cannot help believing that adoption of such a commitment is an indication of insincerity’.”

Frame believes New Zealand’s negotiators were innocent parties who acquiesced in these machinations while Britain and Germany portrayed themselves as “leaders” on climate change, even though their emissions reductions basically consisted of doing what they were going to do anyway.

While I am a little disappointed that Britain and Germany acted in such a self-serving way, I don’t doubt that David Frame is correct about their motives. However, I don’t think that New Zealand Inc. can claim to be have been acting on the purest of motives. On 31 October 1997, the then Minister of Climate Change Simon Upton gave a speech about New Zealand’s negotiating position three weeks before the UNFCCC meeting in Kyoto.

Upton stated that within New Zealand’s negotiating position, using forest sinks to offset increases in emissions was just as important as the Protocol including international emissions trading, an all-gases approach and prompt acceptance of commitments by developed countries.

“Sequestration of carbon in sinks (such as forests) should qualify alongside emission reductions for the purposes of counting progress towards any targets that are agreed.”

Upton continues:

“I want to say why sinks are important – spelling out in broad terms the economic benefits to New Zealand of counting sinks – and explain briefly how New Zealand considers they ought to be treated. Then I want to say why – even though the correct treatment of sinks is both fair in terms of the Convention, and good for New Zealand’s economy – sinks nevertheless do not and cannot protect New Zealand emitters of greenhouse gases from adjustment.”

“Adding to carbon stocks through afforestation should count positively; reducing stocks (through forest harvest, land clearance and such like) should count negatively.”

“If – and I emphasise if – sequestration is treated in the way New Zealand has long been advocating, then the major contribution we expect to make to removing carbon from the atmosphere in future years will earn us ‘credits’.”

However, Upton provided several cautionary notes. If New Zealand’s forest carbon credits were recognised in Kyoto, it might have been perceived as special pleading. Also fairness suggested that forest owners should receive those credits, and be able to sell them. As opposed to the Government keeping them for compliance with Kyoto.

“New Zealand’s stance on sinks has been treated with scepticism by some because, superficially, it looks as though it may be special pleading by New Zealand to take advantage of our sinks to reduce the pressure on emitters to make adjustments. We do not see it that way. New Zealand has been clear in responding to other countries that we do not see the accrual of sink credits as a way to insulate New Zealand from acting to reduce emissions. We see New Zealand’s sink credits being an integral part of the international emission trading market. As such, we see New Zealand emitters facing the world price for carbon emissions provided that price is generated by a free market in emission permits.”

“Let me now turn to a related question: why recognition of sinks nevertheless does not and cannot protect New Zealand emitters of greenhouse gases from adjustment. It might be suggested that New Zealand’s interest in sinks stems purely from a desire to secure for itself a large buffer that would allow for significant growth in greenhouse gas emissions. That is not the case — nor do I believe would it be credible to pursue such an objective.”

“It would simply not be credible to advocate least cost tradeable mechanisms for the world and then seek to keep New Zealand’s forest credits for domestic use only. Sequestration credits should accrue to the forest growers who earn them, and they should be free to place them on the world market.”

So Simon Upton foresaw two problems with using the credits from forest carbon sequestration as a buffer to allow growth of GHG emissions (what New Zealand in fact did). There was the reputational problem of New Zealand’s insincere negotiating position in the Kyoto discussions. And there was the problem that the credits should accrue to the owners of the forests, not the Government.

However, Upton and the New Zealand negotiators got what they wanted: the Kyoto Protocol allowed developed countries to balance growth in greenhouse gas emissions with home-grown carbon sinks recognised between 2008 and 2012 in terms of meeting the agreed target.

As we can see from the Kyoto Escalator graphic, in spite of gross greenhouse gas emissions increasing by 19% (blue line) and net emissions increasing by 23% since 1990 (brown line), New Zealand is on track to comply with the Kyoto accounting rules (the red line) as the 1990 start point is ‘gross’ and the 2008 to 2012 target is ‘net’.

New Zealand’s climate change officials solved the “whose credits?” problem by inventing a non-Kyoto ‘junk’ currency to be issued to the commercial foresters instead of Kyoto units (and to buy off greedy emitters); the New Zealand Unit. The real Kyoto forest carbon removal units are kept “off the balance sheet”. In the New Zealand Greenhouse Gas Inventory 1990-2009 and in the Kyoto Protocol net position report, the carbon sequestration from 2008 to 2012 is estimated from forest surveys. The actual Kyoto removal units will not be recognised until after 2012. It is these as-yet unissued units that will offset the 19% increase in New Zealand’s gross GHG emissions since 1990.

It seems since Simon Upton’s time, we have developed collective amnesia about intentionally negotiating the Kyoto Protocol so that we could rely on forest carbon sinks to buffer increases in greenhouse gases. Has any one of the Kyoto Protocol parties negotiated and acted in good faith? New Zealand certainly hasn’t.