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Cablegate: New Zealand Re-Thinks Climate Change

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RR RUEHWEB

DE RUEHWL #0670/01 2400333
ZNR UUUUU ZZH
R 280333Z AUG 06
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 3194
INFO RUEHBY/AMEMBASSY CANBERRA 4519
RHHJJAA/JICPAC HONOLULU HI
RUCPDOC/USDOC WASHDC 0071
RHHMUNA/USCINCPAC HONOLULU HI
RHMFIUU/DEPT OF ENERGY WASHINGTON DC

UNCLAS WELLINGTON 000670

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/ANP AND OES/EGC
COMMERCE FOR 4530/ITA/MAC/AP/OSAO/ABENAISSA
PACOM FOR JO1E/J2/J233/J5/SJFHQ

E.O. 12958: N/A
TAGS: SENV ENRG NZ XV
SUBJECT: NEW ZEALAND RE-THINKS CLIMATE CHANGE

REF: A. 05 WELLINGTON 603
B. 05 WELLINGTON 991

1. (SBU) Summary: While many Kiwis view the United States and
Australia as the big bad wolves of global climate change, NZ
officials are quietly turning the country's policies away
from the Kyoto Agreement and towards longer-term energy and
climate change strategies. The officials are motivated by the
rising costs of the country's Kyoto obligations, concern
about the potential negative impact of those obligations on
the New Zealand economy, and the recognition that NZ's
changing energy needs must be managed in a way that does not
clash with its goal of reducing carbon emissions. In
practice, this means GNZ wants to build on its bilateral
climate change partnerships with key non-Kyoto partners,
Australia and the United States. The Government's new focus
away from Kyoto will likely be evident when Adrian Macey,
GNZ's new Ambassador for Climate Change, participates in
August 29-30 US-NZ bilateral climate change talks in
Washington. End Summary.

New Zealand Climate Change Policy: A House of Straw
--------------------------------------------- ------
2. (U) In June 2005, the NZ government announced for the
first time that New Zealand's green houses gases would likely
exceed its targets under the Kyoto Protocol, costing GNZ an
estimated NZD 307 million (USD 195 million) in carbon credit
purchases (Ref A). The admission was doubly embarrassing
because the Government claimed when it signed onto Kyoto that
New Zealand would be a net seller of carbon credits. The
Government's admissions led to months of opposition party and
business criticism of the Government's commitment to Kyoto in
light of the costs of compliance and failure of countries
such as China and the U.S. to sign the agreement. As a
result of this pressure, GNZ was forced in December 2005 to
scrap its only policy instrument to implement Kyoto -- a
proposed tax on carbon content of petrol and diesel fuel.
Without the tax's anticipated inhibiting effect on carbon
consumption, New Zealand calculated its estimated deficit
position would be 64 million tons of carbon dioxide
equivalent, at a cost of NZD 606 million (USD 385 million)
(Ref B). Elimination of the tax proposal also left the
Government few options to comply with Kyoto by discouraging
consumption.

3. (U) Faced with a reduced menu of options, GNZ ordered a
review of its domestic climate change policy. Last month,
Minister for Climate Change David Parker released a Cabinet
report based on the results of the Government's review.
Citing challenges to New Zealand's future energy needs, the
report for the first time links the government's long-term
climate change and energy policies, while de-emphasizing New
Zealand's more immediate Kyoto Protocol obligations.

4. (U) Also last month, Parker said that thanks to rising oil
prices, New Zealand's projected carbon deficit for the first
Kyoto commitment period (2008-12) has been reduced from last
year's estimates. However it is still a sizable 41.2 million
tons of carbon dioxide equivalent (NZD 390 million; USD 248
million based on a carbon price of USD 6 per ton).

5. (SBU) As it quietly backs away from its public emphasis on
Kyoto, GNZ is simultaneously developing New Zealand's Energy
Strategy (NZES) and a National Energy Efficiency and
Conservation Strategy (NEECS). GNZ announced that a draft of
the NZES would be released in September; however, this has
reportedly slipped until October (or later). GNZ still aims
to complete the three strategy documents in advance of the
United Nations Climate Change Conference in Nairobi in
November.

Asia Pacific Partnership: "Let me in, Let me in"
--------------------------------------------- ---
6. (SBU) According to Australian High Commission contacts,
New Zealand has repeatedly asked Australia about NZ's joining
the Asia-Pacific Partnership on Clean Development and
Climate. Australian officials have reportedly told GNZ that
the Partnership is at an early stage and that Partners wish
to consolidate before considering expansion. Canberra has
also said that despite GNZ requests climate change is not
going to be on the agenda at annual bilateral Australia-New
Zealand consultations.

7. (SBU) Left outside the Asia-Pacific Partnership club, New
Zealand is building on its existing, sizable climate change
cooperation with Australia and the United States. In doing
so, GNZ is also hoping that by increasing its bilateral work
with us, it can show the Kiwi public that New Zealand is
exerting a global influence on climate change even as it
de-emphasizes the importance of adherence to Kyoto. Among
other things, Australia's Minister for the Environment Ian
Campbell recently approved grant funding of AUS$224,000
(US$170,000) for GOA participation in two trilateral projects
(United States, Australia and New Zealand) to assist the
Pacific region in adapting to the possible impact of climate
change. One project is designed to enhance the quality of
climate data generated in the Pacific. The second will
develop a high-quality cyclone database for the South Pacific
and Indian Oceans.

Foreign Minister appoints Climate Change Ambassador
--------------------------------------------- ------
8. (SBU) In a further sign of moving away from Kyoto-centered
policies, at the end of July, Foreign Minister Winston Peters
announced the appointment of diplomat Adrian Macey to the new
position of Climate Change Ambassador. Macey, most recently
NZ's Ambassador to France and the OECD, will be responsible
for handling New Zealand's international negotiations on
climate change, and for increasing cooperation with key
bilateral partners and international stakeholders.
Ambassador Macey will lead the New Zealand delegation to
Washington August 29 to 30, as part of the fourth round of
partnership talks of the U.S.-New Zealand Bilateral Climate
Change Partnership, initiated in 2002.
We have not been able to meet with Macey since his
appointment just a few weeks ago. But we predict his
approach to the meetings will be designed to help New Zealand
meet its goals of enhancing its bilateral climate change
relationship with the U.S. and developing ties with the
Asia-Pacific Partnership.
McCormick

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