Editorial: Kyoto blow no reason to bow out

Much gnashing of teeth has followed the revelation that the Kyoto Protocol will not, as previously advertised, be a financial plus for this country. An anticipated surplus of carbon credits worth $500 million for the first commitment period, 2008 to 2012, has, the Government conceded last week, now turned into a deficit of the same sum. The National Party, relishing the obvious embarrassment factor in this $1 billion turnaround, has called for an immediate review of New Zealand's continued participation in the protocol. Any such scrutiny will surely conclude this is an exercise we should not exit at the first sign of a setback.

The reasons for this are implicit in the questions raised by the National leader, Don Brash. He said his party needed to be convinced that global warming was occurring; that warming was being caused by human activity; and that the sacrifices were commensurate to any potential gain.

Dr Brash is being disingenuous in even raising the first two questions. He knows only too well that an overwhelming majority of the world's scientists are convinced that climate change is real. And that, only recently, a statement by 11 of the world's leading scientific academies attributed most of the warming of recent decades to human activity. Unquestionably, it makes common sense to reduce emissions to 1990 levels, as required under the first commitment period.

Based on that, Dr Brash's third question becomes somewhat redundant. It would be more reasonable to assess what would happen if New Zealand was not ready to make that "sacrifice". The actual improvement projected under the first stages of the protocol is modest, but at least it is a first step in combating global warming. To do nothing would be to condemn future generations to even greater sacrifice.

Dr Brash might also ponder what would happen if, as National has previously proposed, New Zealand were to pull out of the protocol in 2012 if the United States and Australia had not ratified it by then. Withdrawal would mean reneging on an international agreement that had been signed by every member of the OECD except those two countries. That would inevitably be viewed dimly, especially as it involved a country only too willing to promote a clean, green image. In essence, withdrawal is not an option.

The country's attention should, instead, be focused on reducing the extent of the taxpayers' sacrifice and, in so doing, making its contribution to a campaign embraced by most nations. That requires an appreciation of how the projected carbon-credit terms turned so quickly, and so radically, against New Zealand. In general terms, refined modelling has imposed a greater penalty for vehicle emissions, and for increased deforestation and a slump in the rate of new planting of commercial forests.

The forestry situation reflects improved returns on sheep and beef farming - itself a significant flatulence-based contributor to greenhouse-gas emissions - and lower returns to tree growers. Remedying that to any degree may depend on the cyclical nature of livestock returns. Certainly, incentives to plant trees should be avoided because of their potential to distort.

The greatest immediate potential for improvement may, therefore, lie in the area of vehicle emissions, where the Government could be far more active. It will also trust the new carbon tax is a catalyst for reduced emissions. Hope, however, must be replaced by surety when it comes to the greenhouse agreements designed to secure local companies' international competitiveness.

The long-term rationale for the Kyoto Protocol is untainted by this carbon-credit reversal. The short-term reality for New Zealand is less inviting. As is probably the medium term, when sterner targets will be set. But that can be no reason for taking our eyes off the big picture.