On Tuesday, the Government announced the cancellation of the final 21.5 million Kyoto Protocol carbon credits it held, marking the end of an era which damaged confidence in international carbon markets, Climate Minister James Shaw said.
Nearly 300 million overseas carbon credits were brought into New Zealand from the global carbon market set up under Kyoto. That’s equivalent to more than three times the country’s annual emissions.
Later research determined a significant number of these units didn’t represent actual emissions reductions – they were “hot air”.
Shaw told Newsroom he was proud he cancelled the 84 million remaining “hot air” credits as soon as he could after coming into government in 2017.
“We had roughly 120 million Kyoto-era units when I got into government. We did an assessment of the hot air units and we cancelled 94.5 million of those some years ago,” he said.
“That cleaned out the registry from all the hot air stuff.”
About 6.5 million of the remaining, higher integrity units were used to meet New Zealand’s second Kyoto target, which spanned 2013 to 2020. Everything left over – 21,472,629 credits – was cancelled this week.
How New Zealand met its 2020 Kyoto target
“We don’t want to carry anything over from the Kyoto period to the Paris period,” Shaw said. That’s because even legitimate Kyoto credits represent emissions reductions that have already occurred, rather than ones that will occur during the 2021 to 2030 period covered by our Paris target.
“We don’t think that any country should be counting activity from previous times towards a future requirement.”
New Zealand follows Australia in making this move. Two weeks ago, Australia scrapped its remaining 700 million Kyoto credits.
The hot air credits have had a lasting impact on New Zealand’s climate response, Shaw said. We’re still hoping to meet our Paris target through purchasing up to 100 million tonnes of offshore emissions cuts, but that’s more difficult in a post-Kyoto world.
“It was so dodgy and it had caused such a huge problem for us as a country. But we’re still living with the legacy of that, which is that no one trusts international action any more,” he said.
“For me, the cancellation of the hot air units, the completion of the 2020 target and the cancellation of all the excess Kyoto units is part of trying to restore our integrity for the Paris period. Trying to walk into that with nothing hanging over from the past. To the extent that we are going to be working with other countries to reduce global emissions, we want to do that in a way that has real environmental integrity to it.”