Govt cool on Kyoto surplus surprise

The Government and the Labour Party say New Zealand still faces big challenges on climate change despite latest figures showing liabilities under the Kyoto Protocol have swung from deficit to surplus.

A Ministry for the Environment report released yesterday showed the liability had shifted from an estimated deficit of $546 million last year to an estimated surplus of $241 million.

And while the Government and Labour were cautious, the report provoked starkly different reactions from Business New Zealand and the Greens.

Business NZ chief executive Phil O'Reilly said the changed position gave the Government room to move on the emissions trading scheme, which is under review.

"We should now take the time to thoroughly explore all options for reducing carbon emissions while safeguarding economic growth."

But the Greens co-leader, Jeanette Fitzsimons, said the figures had eliminated the Government's last excuse for doing nothing.

"We cannot continue to rely on the global economic downturn, bad weather and accounting tricks to make our reductions for us," she said.

The liability is an estimate of how much New Zealand will have to spend to buy carbon credits if climate change emissions are not reduced to levels agreed under the Kyoto Protocol, or how much its credits would be worth if its emissions reduce.

The cost is based on Kyoto Protocol units - a unit is equivalent to one tonne of greenhouse gas converted to its carbon dioxide equivalent.

Environment Minister Nick Smith said the latest estimate was positive but he was cautious about what was going to happen between now and 2015, when the liability becomes effective.

The report showed the main reasons for the swing from deficit to surplus was the 2007-08 drought and improved information on carbon
storage in forests.

"It is good news that we may exceed our Kyoto target but we need to be cautious of these projections given their volatility," Dr Smith said.

"It is difficult for the Government to make sound climate change policy when projections have ranged from a 55 million tonne surplus in 2002 to a 64 million tonne deficit in 2006."

Labour's climate change spokesman, Charles Chauvel, said there was no room for complacency.

"I'm not knocking the good news contained in today's announcement, but let's not kid ourselves."

He said the figures contained only one year of actual data - for 2008 - and four years of projections.

- NZPA