Frequently Asked Questions

The Paris Agreement is an international treaty signed in 2015 by 197 countries under the framework of the United Nations Framework Convention on Climate Change (UNFCCC). Its primary objective is to limit global warming to below 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels.

The Paris Agreement aims to strengthen the ability of countries to deal with the impacts of climate change and to support their efforts to adapt to its effects. It also seeks to increase financial flows to help developing countries reduce their greenhouse gas emissions and adapt to the impacts of climate change.

Under the Paris Agreement, countries are required to submit national climate action plans, known as Nationally Determined Contributions (NDCs), every five years. These plans outline the steps each country will take to reduce their greenhouse gas emissions and mitigate the impacts of climate change.

The Paris Agreement also established a mechanism to promote cooperation among countries, known as the “global stocktake,” which will occur every five years. The stocktake will assess the collective progress towards meeting the goals of the Paris Agreement and identify areas where additional efforts are needed.

The Paris Agreement entered into force on November 4, 2016, and as of 2021, 191 countries have ratified the agreement. The United States, under the previous administration, withdrew from the agreement in 2020 but rejoined under the current administration in 2021.

In summary, the Paris Agreement is a global effort to combat climate change by limiting global warming to below 2 degrees Celsius and supporting countries in adapting to the impacts of climate change.

The Kyoto Protocol and the Paris Agreement are both international treaties aimed at addressing global climate change but there are several key differences between the two agreements

1. Binding vs. non-binding: The Kyoto Protocol was a legally binding treaty that required developed countries to reduce their greenhouse gas emissions by a specified amount. The Paris Agreement, on the other hand, is a non-binding agreement that relies on the voluntary commitments by countries to reduce their emisions.
2. Scope: The Kyoto Protocol only applied to developed countries, while the Paris Agreement applies to all countries, including both developed and developing countries
3. Emisions reduction targets: Under the Kyoto Protocol, developed countries were assigned specific emmission reduction targets that they were required to meet. Under the Paris Agreement, countries submit their own voluntary emisions reduction targets, known as the Nationally Determined Contributions (NDCs).
4. Timeframe: The Kyoto Protocol called for a 5% reduction in greenhouse gas emissions below 1990 level by the pariod between 2008 and 2012, while the Paris Agreement which was signed in 2015, covers the period after 2020 up to 2030. Under the Paris Agreement, all countries who have signed up aim to substantially reduce global greenhouse gas emissions in an effort to limit the global temperature increase in this century to 2 degrees above pre-industrial levels, while pursuing the means to limit the increase to 1.5 degrees.
5. Adaption: The Paris Agreement places a greater emphasis on adaptation to the impacts of climate change, including providing financial and technical support to developing countries, though climate financing mechanisms such as the Green Climate Fund.

In summary, the main differences between the Kyoto Protocol and the Paris Agreement are that the Kyoto Protocol was a legally binding treaty with specific emissions reduction targets for developed countries, while the Paris Agreement is a non-binding agreement with voluntary emissions reduction targets for all countries, and whereas the Kyoto Protocol focused on mitigation, under the Paris Agreement there is a greater emphasis on adaptation to the impacts of climate change.

If you are an organisation that wants to go carbon neutral, there are several steps you can take:

1. Measure your emissions: Before you can reduce your emissions, you need to know how much you are emitting. You can calculate your organisation’s carbon footprint by using tools such as the GHG Protocol or carbon calculators.
2. Set a target: Once you knwo your emissions, you can set a target for reducing them. A common target is to achieve net-zero emissions, which means that any remaining emissions are offset by activities that remove carbon from the atmosphere.
3. Manage and Reduce your emissions: Impliments measures to reduce your emissions, such as increasing energy efficiency, using renewable energy, switching to low-emissions trasport, and reducing waste.
4. Mitigate and offset your emissions: After you have reduced your emissions as much as possible, you can offset any remaining emissions by purchasing carbon credits or investing in projestc that reduce emissions, such as renewable energy or reforestation projects.
5. Communicate to your commitment: Let your stakeholders know about your commitment to going carbon-neutral and the steps you are taking to achieve it. This can help build support got your organisation’s efforts and encourage others to take action on climate change.
6. Continuously monitor and improve: Regularly monitor your emissions and progress towards your target, and identify opportunities for further emissions reductions or offsets.

Going carbon neutral requires a commitment to reducing emissions, investing in clean energy and technology, and taking responsibility for the environmental impact of your organisation. It is an important step towards addressing the urgent issue of climate change and creating a more sustainable future.

In general, it is not recommended for individuals to purchase or trade carbon credits due to the risks involved. However, in New Zealand, residents can open an account in the New Zealand Emissions Unit Register and buy and sell New Zealand Units (NZUs). To do this an individual needs to be a New Zealand registered company or a New Zealand resident.

We recommend only purchasing voluntary carbon credits from an approved carbon standard such as for example VERRA or the Gold Standard. We also recommend looking into the double counting issue and ensuring that the projects are not being counted twice so once under the Paris Accord and once in the voluntary market.

Companies that are validating, auditing, and verifying their own carbon credits in the voluntary market and who do not use a third-party registry should be avoided at all cost. International best practice requires using an approved standard and methodology and it requires third party validation and verification. It requires that the carbon registry used is not the registry of the company creating the carbon credits.

The slow development of compliance carbon markets under Article 6 of the Paris Agreement and the growth of voluntary carbon markets has led to an issue with double counting where carbon credits can potentially be accounted for and sold twice – once in a compliance market and once in the voluntary carbon market. The Paris Accord calls for letters of corresponding adjustment where there is an issue of double counting.

For example, any company in New Zealand that proposed to sell New Zealand Units (NZUs) and Verified Emission Reduction (VER) units from the same set of forests is undertaking double counting. This is not allowed.

VCM stands for voluntary carbon market which is a market that allows companies and individuals to offset their greenhouse gas emissions voluntarily through the purchase of carbon credits. There is no obligation to buy carbon credits in the voluntary carbon market which is why it is called voluntary. 

This contrasts to compliance markets such as the New Zealand Emissions Trading Scheme (NZ ETS) in New Zealand, the Australian Carbon Market in Australia, the Federal Carbon Credit Pricing System in Canada, or the European Union Emissions Trading Scheme (EU ETS) in Europe. In these schemes there are participants with mandatory obligations to purchase carbon credits every year.

The international carbon market is made up of both the voluntary carbon market and the compliance carbon markets.

The World Bank State of the Carbon market report is published every year in May/June. You can read about the state and trends of the carbon markets in various countries around the world. The 2023 version of the World Bank State and Trends of Carbon Pricing report can be found here.

The first thing to note about the New Zealand Emissions Trading scheme is that it is optional to join but that if a land owner joins there are benefits (from carbon sequestration) and also liabilities (when the trees are cut down).

For further information on how to join please click here on the Ministry of Primary Industries (MPI) website.

New Zealand has committed to a 50% reduction in net greenhouse gas emissions below 2005 levels by 2030. In order to achieve this target, New Zealand has put in place a range of domestic policy measures including the New Zealand Emissions Trading Scheme (NZ ETS). New Zealand intends to meet its commitments mainly through domestic measures. However, it does not rule out accessing carbon credits via internationally transferred mitigation outcomes (ITMOs) under Article 6 of the Paris Agreement.

The number of NZUs obtained each year depends on the life and age of the trees. To assist you with making the calculations you can use the look up tables developed by the Ministry of Primary Industries which can be found here.  If you have over 100 hectares of land then you need to will need to use carbon look up table specifically related to your land.

A VER is verified emission reduction and is used in the voluntary carbon market or VCM and it can be used by any company who voluntarily wants to go carbon neutral and reduce their emissions to net zero. In contrast, an NZU is a New Zealand Unit which is issued by the New Zealand government to participants in the New Zealand Emissions Trading Scheme.

NZUs are issued by the New Zealand government and ACCUs are issued by the Australian government and so they are backed by government legislation and regulation. Hence, if you buy an NZU or an ACCU you can be sure that it has a value and that it can be sold in the future.

NZUs are issued by the New Zealand government to participants in the New Zealand emissions trading scheme. Emitters in the New Zealand Trading scheme include all sectors of the economy (liquid fossil fuels, stationary energy, industrial processes and waste) except for agriculture sector where there are currently no obligations for emitters. 

After years of consultations and discussions about whether or not the agriculture sector should enter the NZ ETS, the agriculture sector emitters are expected to pay a farm based levy which is not the same as having to surrender an NZU.

ACCUs are issued by the Australian government and is administered by the Clean Energy Regulator for projects that avoid or sequestered carbon buy land restoration projects. The main buyer of ACCUs is the Australian government through the Emissions Reduction Fund (ERF). ACCUs can aslo be bought by buyers in the voluntary carbon market in Australia. 

This is a significant difference from the way that the carbon market works in New Zealand. In New Zealand, NZUs are for the compliance market only and VERs are for the voluntary market. In Australia, an ACCU can be used in both the compliance or the voluntary carbon market.

No. You cannot swap and ACCU for an NZU. There is no linkage between the carbon pricing mechanisms in Australia and the one in New Zealand at the current time.

No. At the current time, you cannot import ITMOs into Australia

You can open an account at the New Zealand Emissions Unit Register at the following website here. You need to be a New Zealand registered company or individual in order to open an account.

You can open an account at the Australian Unit Register at the following website here. You need to be a Australian registered company or individual in order to open a registry account.