There is a 33% gap between the government’s new climate change target and New Zealand’s expected performance, all up.  The overshoot is greater than previously expected as projected emissions are higher.

The gap is one of the new metrics that can be derived from the cabinet paper that sets out New Zealand’s emissions target for 2020 – released to the Sustainability Council under the Official Information Act.

Based on this paper, New Zealand recently committed to reducing its emissions in 2020 to 5% below 1990 levels, or providing carbon credits to make up the difference.  That single-year target translates into a carbon budget for the 2013 to 2020 period of about 510 megatonnes of carbon dioxide equivalent (Mt).

Government projections show gross emissions for that period are expected to total about 680 Mt – around 33% above the target, and 8% above the level projected two years ago.

When carbon absorbed by crop forests is also counted, this roughly halves the gap to about 15% above the target on a net emissions basis.  The trouble is, those trees may be absorbing carbon and reducing net emissions today, but they are planned to be cut down in the 2020s and the bulk of the carbon will then be released again.

So looking at emissions for just the eight-year period and also including the carbon absorbed by crop forests, the government estimates in the cabinet paper that New Zealand is 78 Mt over the target.  That is up considerably on projections from 2011 under which New Zealand would have met the target.  And once liability for the future release of another 90 Mt from crop forests is factored in, the long-term picture is a total excess of about 170 Mt resulting from this period.

The cost of the extra 90 Mt depends on the future price of carbon credits.  It represents a contingent liability to taxpayers of $2.3 billion at the price the government traditionally uses to assess climate policy options ($25/tonne), and could be many times that figure.

The government plans to pay the other half of the bill (the 15% difference between the target and net emissions) using international carbon credits it will hold over from the initial Kyoto period of 2008 to 2012.  That is a novel accounting approach for a country that is not taking a second commitment under Kyoto and if it does not get the required international agreement, New Zealand could end up paying for this other 78 Mt later on as well.

The overall effect is to put much of the cost of today’s excess emissions on tomorrow’s taxpayers.  At least the majority of the bill for failing to reduce gross emissions in line with the target is simply being put on the credit card.

Until carbon budgeting legislation is put in place that requires governments to properly account for carbon, and to commit to long-term emission reduction plans, they can too easily keep sending the bills to our children.