By Mr February 26/04/2016

Minister for Climate Change Paula Bennett has just been in New York signing the UN Paris Agreement. While in New York, Bennett was interviewed by TV One USA correspondent and general nice guy Jack Tame for Television NZ’s Q + A news show.

I wonder if Paula Bennett thought she would get a soft, jokey interview with that nice young man Jack Tame. She certainly didn’t. Tame takes the interview 110% seriously. He does not smile. He delivers his questions and his interruptions through a taught stone-face. And his questions are good.

We need to remember about a year ago, Jack Tame stood in for Mike Hosking on ‘Mike’s Minute’ and gave us a month of refreshingly different short pieces to camera. In that month, Jack Tame talked about climate change. And he concluded with a minute titled climate tipping points. So Tame takes climate change and climate change policy seriously.

Tame gave Bennett a couple of minutes to gush enthusiastically about the signing of the Paris Agreement before he cuts straight to the Morgan Foundation’s Climate Cheats report which alleges that the New Zealand Government was complicit in allowing dubious international carbon credits (Russian and Ukrainian and emission reduction units or ‘ERUs’) into the New Zealand Emissions Trading Scheme.


“I want to pivot quickly to the ETS. As you know, a report by the Morgan Foundation has concluded New Zealand, in their words, effectively ‘cheated’ its way to commitments made under Kyoto by trading in international carbon credits that were of dubious integrity at best. Do you accept that term? Cheating?”

Paula Bennett


“I accept, actually, that there were dubious carbon credits last year when the Stockholm report came out. So, actually, the Morgan report’s nothing new. So half of it is kind of right, you know? Yes, there were dubious credits. We found out. We’re not using them now. We don’t hold any of them. And we definitely won’t again. And then, quite frankly, the other half of his report is factually incorrect.”

Jack Tame quickly responded with about a half dozen pertinent follow-up questions about the New Zealand Government’s failure to stop the inflow of dodgy units.

  • “what part of ‘Climate Cheats’ report is factually incorrect?”
  • “we did continue trading on those credits for a long period when other countries abandoned them”
  • “but the government allowed that trading”
  • “So you don’t accept that was cheating?”
  • “it wasn’t in the spirit of the commitments made under Kyoto”
  • “but I think the question is how do we make up for that shortfall?”

Bennett eventually tried to ‘flip’ the questions onto a diversionary track; the undefined way forward with the Paris Agreement. Tame then flips her diversion back on her by implying she is being a hypocrite in grandstanding over the signing of the Paris Agreement when she knows that New Zealand has 124 million surplus emission units in the bank because of the influx of the dodgy Ukrainian units into the emissions trading scheme.


“But how do you come to New York and say, ‘These are our commitments. Yeah, sure, the last time we had commitments, we reached them by purchasing credits of dubious quality when internationally, these things were slagged off.’ Now you come here and say, ‘Believe us this time. We’re not gonna buy credits of dubious quality.’”

Bennett then hides behind a false statistic – that 80% of the units were okay.  She tries, again unsuccessfully, to move the interview on. Tame goes to the ethics of the matter in his next question and focuses on what would be the right thing to do.


“Would it not be a stronger thing for the government to come to New York and say, ‘Yes, we’ve made a mistake. We’re going to rectify this by either making up that shortfall in credits that were of dubious quality by purchasing extra ones, or making greater commitments in the future.’ Wouldn’t that be in the spirit of the Paris agreement and in the previous commitments under Kyoto?”

Bennett resorts finally to an old trick often used by Nick Smith and Tim Groser. She invokes the old canard that New Zealand is one of the few countries that has an emissions trading scheme!

Returning to this statement by Bennett:

“I accept, actually, that there were dubious carbon credits last year when the Stockholm report came out. So, actually, the Morgan report’s nothing new. So half of it is kind of right, you know? Yes, there were dubious credits. We found out. We’re not using them now. We don’t hold any of them. And we definitely won’t again. And then, quite frankly, the other half of his report is factually incorrect.”

“We’re not using them now. We don’t hold any of them”

How many dodgy international units are we talking about? According to the Kyoto Protocol ‘True-Up’ Report, of December 2015, New Zealand cancelled 373 million units to comply with the Kyoto Protocol. The numbers and types of units cancelled were: 97 million imported dodgy Emission Reduction Units (“ERUs”), 16 million imported Certified Emission Reduction units (“CERs”), 81 million removal units (“RMUs”) and 179 million Assigned Amount Units (“AAUs”). The surplus units kept by the Government, after the cancelling were 124 million AAUs.

Back in 2014, the Greenhouse Gas Inventory ignored the dodgy imported units completely and showed that New Zealand would comply with the Kyoto Protocol and have a small surplus of only 8 million units (which would be AAUs).

The 97 million dodgy imported ERUs, 16 million imported CERs, and 10 million RMUs ended up in the Government’s accounts as emitters imported them and gave them (‘surrendered’ them) to the Government to meet their NZ emissions trading scheme obligation.

Every unit imported and surrendered enabled the Government’s ‘Kyoto position’ to grow significantly from the 8 million unit surplus as noted in 2014 above, to the December 2015 surplus of 124 million Assigned Amount Units.

The Government had a little flexibility in which units could be kept as a surplus. There was a limit on ERUs, a prohibition on having surplus RMUs and no limits on surplus AAUs. So the Government preferentially cancelled all the ERUs, all the CERs and all the RMUs and kept (as surplus) as many AAUs as possible.

‘Credible’ AAUs

So every dodgy Ukrainian ERU that entered the NZ emissions trading scheme allowed the New Zealand Government to have an extra ‘credible’ AAU in the number of surplus units carried forward. To use an analogy, the Kyoto cancellation process allowed the Government to ‘launder’ the dodgy international units into a ‘credible’ currency, the Assigned Amount Units.

The Ministry for the Environment’s 2020 position report shows that the Government intends to use 123.7 million surplus units from Kyoto’s Commitment Period 1 to plug the gap as expected emissions will be above the 2020 emission target.

So back to Bennett’s statement on the dodgy units “we are not holding them”. That is spin and semantics. The Government is holding an extra large surplus of ‘credible’ AAUs ONLY because millions of ERUs were cancelled.

And the statement “We are not using them”. That is double spin. Firstly, the Government used the dodgy units to comply with the Kyoto Protocol. And secondly, the Government is using the surplus of AAUs, which it has in such large numbers only because of the dodgy units, to claim compliance with the 2020 target even while emissions increase. That is just grossly unethical.


Well done, Jack Tame, that’s the best interview a New Zealand journalist has ever given a New Zealand Minister of Climate Change. Keep it up!

Read the full interview transcript here.

Featured image: CC wikipedia

0 Responses to “NZ uses dodgy Ukrainian carbon credits, minister in denial”

  • The whole Carbon trading scheme is dodgy.
    The Crown NZ govt is dodgy and corrupt.
    New Zealand was not known for being a “big polluter” and probably if the Crown’s corporations and banks behind the trading scheme had actually measured amount of plant food (or C02) NZ produces the story would be very different. We would be owed more money by the oligarchy..
    The whole putting an arbitrary and random price on “Carbon” for profit is madness.

  • It is madness as NZ is estimated emissions to be .2% (point two percent) not even on the chart.
    Of course the venture capital investors ( eg Al gore’s hedge fund) want to make money off putting a random price on Carbon .putting the misguided people of NZ on the Carbon mythology hook. Now that is unethical.