Reality of Complying With Kyoto a Blow to 'Clean, Green' New Zealand

By Patrick Goodenough | July 7, 2008 | 8:16 PM EDT

( - New Zealand's government is being challenged to justify the country's continued participation in the Kyoto Protocol after it admitted that complying with the climate change treaty will cost taxpayers about one billion NZ dollars (U.S. $714 million).

The news has rattled New Zealanders, who previously were led to believe that participating in Kyoto would earn the country millions of dollars in carbon "credits."

The admission is a blow for a left-leaning, green-friendly government, which last month announced that one of the world's first carbon tax regimes -- entailing higher prices for gas, electricity and coal -- would come into effect in 2007.

The opposition center-right National Party has called for an immediate formal review of the country's participation in Kyoto, accusing the Labor government of a major policy blunder.

"They were so intent on looking good to their socialist friends in Europe that they forgot the enormous cost to New Zealand taxpayers," National leader Don Brash told lawmakers in Wellington.

The protocol requires industrialized countries to reduce emission of CO2 and other pollutants blamed for climate change by set amounts during the 2008-2012 period. The U.S. and Australia have refused to ratify the treaty, citing economic concerns and pointing to the fact that major developing countries -- and big polluters -- such as China and India are not required to meet emission targets.

Kyoto allows for trading in carbon credits, and New Zealand, which promotes itself as a "clean, green" nation, had expected to be in a position to sell credits to heavier polluters. But revised projections show that the country will instead likely have to buy credits, at taxpayers' expense.

On Thursday, Brash said a review was needed because of the new information on the financial cost to New Zealand, and also because "there is very considerable debate about whether the enormous cost of slowing the growth of greenhouse gas emissions is worth bearing, relative to the modest reductions in temperature which such reductions might achieve."

A review was also in order, he said, because major countries were still refusing to ratify the protocol, and because there was still some debate about whether global warming was taking place - and if it was, about the role played by human activity.

Last December, Prime Minister Helen Clark said at the opening of a wind farm that "there is good money to be made from the Kyoto processes, and I am confident that many New Zealand businesses will prosper as a result."

In a boisterous debate in parliament this week, she fended off Brash's criticism, saying New Zealand had not joined Kyoto in order to make money from carbon credits, but "so that we do not freeload on other countries' efforts."

She said her earlier statement on making money from Kyoto had referred to businesses profiting from developing clean-energy technologies.

Conservative ACT Party leader Rodney Hide then asked Clark whether there was any argument that would convince her that New Zealand should dump Kyoto, or whether "look[ing] good on the world stage" was enough for her.

The prime minister responded that "New Zealand prefers to be on the side of seven of the eight G8 countries on this subject." She accused the opposition of having its Kyoto policy "written in Washington."

Clark's environment minister, Pete Hodgson, argued that "the science debate is over," pointing to a recent statement by G8 national scientific bodies that "there is now strong evidence that significant global warming is occurring."

Nonetheless, National environment spokesman, Nick Smith, said if the party forms the next government after elections expected later this year, it would consider pulling out of the Kyoto Protocol.

"We have a reluctance for New Zealand to withdraw from agreements that have been signed because it is not good for our name internationally," Smith said. "But we now have to weigh up whether to withdraw, given the scale of this error."

In a research poll last February, 70 percent of respondents said they were aware that New Zealand was a signatory to the Kyoto Protocol, and of those, 68 percent said they were in favor of the country having signed up.

ACT lawmaker Deborah Coddington, whose party opposed ratifying Kyoto, ridiculed Hodgson for spending half a million dollars in one year on a campaign to educate New Zealanders about global warming.

"It's the minister who should be educated about the effects of signing up to foreign feel-good treaties," she said.

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Patrick Goodenough
Patrick Goodenough
Spencer Journalism Fellow