Over the last century the amount of CO₂ in our atmosphere has risen. Coincident with this rise has been an increase in the global average temperature, up by nearly one degree Celsius. A majority of climate scientists believe that these trends are related and are driven in large part by our usage of fossil fuels (Figure 4).



If these trends continue, global temperatures could rise by a further one to four degrees by the end of the 21st century, potentially leading to disruptive climate change in many places.

A major step in the development of global policy instruments was the signing of the 1997 Kyoto Protocol. It establishes legally binding greenhouse gas emission allowances for all developed countries
that have ratified it. New Zealand, representing 0.2% of global greenhouse gas emissions and with an economy that is highly climate dependent, is one of 141 ratifying countries.

New Zealand’s greenhouse gas emissions profile is unique with around half coming from agriculture in the form of nitrous oxide and methane (Figure 5). These non energy related emissions are outside the scope of this project.



Energy-related greenhouse gas emissions, from fossil fuel use in transport, electricity generation, manufacturing and construction, account for 43% of the total.

At present, transport, contributing around 19% of emissions, is nearly 100% dependent on fossil fuel (oil and gas products), but the picture looks very different for electricity generation, which contributes only 8.5% of the total emissions. Figure 6 shows that with our extensive use of renewable energy sources (hydro, geothermal and wind), we are currently one of the leading countries in the world in terms of low CO₂ emissions from power generation.



Starting from this high renewables base, New Zealand’s position would worsen through additional fossil fuel generation to meet increased electricity demand. By contrast, Australia’s emissions, due to heavy reliance on coal and gas, are more than four times higher than New Zealand’s on a per-unit of electricity basis offering a greater potential for improvement.

New Zealand faces the challenge of balancing climate change considerations against increasing energy demand. The choice of energy options available may become constrained by the way we limit or alter our use of fossil fuels to mitigate potential climate change impacts.

The New Zealand Government has introduced domestic policies to try to change energy use. In our economy some greenhouse gas emissions come from economic activities and demand – such
as agricultural emissions of methane. Other emissions are the indirect outcome of the supply mix used to provide energy to support economic activities. There are two general ways to reduce emissions:

1. Demand Side – reduce demand for emissions-intensive activities:
a. Reduce the size of our economy;
b. Change our economic mix to reduce the contribution of emissions-intensive sectors; or
c. Reduce “unnecessary” emissions (avoid wasting energy).

2. Supply Side – reduce the emissions intensity of direct and indirect productive activities:
a. Reduce supply from emissions-intensive activities (fossil fuel use) and replace it with supply from non-emissions-intensive sources (e.g. renewables);
b. Continue the supply mix but use improved technology to increase efficiency of energy supply; or
c. Continue the supply mix but capture and store greenhouse gas emissions.

Both demand and supply side approaches have a role in achieving sustainability.