At a time when neighboring Australia is getting ready to launch a national program to reduce carbon emissions, officials from New Zealand report a similar project in their own country is meeting with early success. Adopted in its current form about one year ago, New Zealand’s emissions reduction program has already helped the island nation cut carbon while encouraging renewable energy and reversing deforestation.
New Zealand is currently the only major economy outside of Europe with a comprehensive national carbon policy. Based on a cap and trade model, New Zealand’s carbon program has successfully started to reduce emissions of the main gases that cause climate change. The policy is also helping New Zealand meet its obligation to reduce carbon emissions under the Kyoto Protocol.
Some of the most noticeable impacts of New Zealand’s carbon policy have been in the forestry sector. This isn’t surprising, because emissions from forestry were the first to be regulated at a national level. Back in 2008 the New Zealand government began forcing forestry operations to pay for carbon emissions, providing an incentive to avoid unsustainable deforestation.
The effect on New Zealand’s forests has been noticeable. In 2007 the country was experiencing a net loss in forest cover of 16,000 hectares annually. Today New Zealand’s forest cover is actually growing, as the amount of land re-planted with trees each year outstrips the area of forest loss. This is good news not only for the climate, but for the unique plants and animals that call New Zealand’s forests home.
In the summer of 2010 New Zealand’s carbon reduction policy expanded to include other sectors of the economy—namely industry, energy, and transportation. That was also the year the current version of the national carbon trading program went into effect. One year later, polluting companies covered by the program are successfully cutting their carbon emissions. A recent government report found that only 2% of polluters were failing to comply with the law.
In the year since the national carbon policy went into effect, no major new fossil fuel infrastructure has been built in New Zealand, ending years of growth in polluting energy. Meanwhile 1,340 megawatts of renewable energy capacity are being added to the grid—an encouraging sign of a trend toward cleaner energy sources. The national carbon policy is credited with have helped trigger this shift.
News of New Zealand’s successful carbon policy could hardly have come at a better time, as it provides a measure of reassurance for policymakers in nearby Australia. The Australian government seems set to pass its own climate policy, which will start out as a tax on carbon and shift to a cap and trade program a few years out. Australia’s trading program could eventually be linked to New Zealand, a move that lawmakers in both countries hope to encourage.
Outside of New Zealand and Australia, countries in the European Union have been participating in a carbon trading program for years. Other major polluters, however, have been slow to adopt this or any other comprehensive strategy for curbing emissions.
In 2010 the United States failed to pass a national climate policy supported by President Obama. China has plans to experiment with carbon trading at a regional level, but has yet to implement a comprehensive national climate policy. Other large economies from India to Japan have made varying levels of commitment to reduce their carbon emissions, but so far lack a dependable mechanism for doing so.
The success of New Zealand’s climate policy may have a ripple effect that extends far beyond the small island country’s borders. Though especially relevant for Australia, policymakers in other countries could also learn from New Zealand’s progress. If they study New Zealand’s experiences thoroughly, they may discover cutting the emissions responsible for climate change isn’t quite so hard, after all.
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