Vote Climate Change - Supplementary Estimates 2011/12

Details of Multi-Year Appropriations#

Information Supporting the Supplementary Estimates Vote Climate Change#

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister for Climate Change Issues (M12)

ADMINISTERING DEPARTMENT: Ministry for the Environment

MINISTER RESPONSIBLE FOR MINISTRY FOR THE ENVIRONMENT: Minister for the Environment

Part 1 - Summary of the Vote#

Part 1.3 - Trends in the Vote

Summary of Financial Activity

Part 2 - Details and Expected Performance for Output Expenses#

Part 2.1 - Departmental Output Expenses#

Administration of the Emissions Trading Scheme (M12)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will decrease by $251,000 to $236,000 in 2011/12. This decrease is due to merging of this appropriation with Non-Departmental Output Expenses: Emissions Trading Scheme. The functions of this appropriation were transferred to the Environmental Protection Authority in December 2011.

Climate Change MCOA (M12)#

Scope of Appropriation#

Explanation for Use of Multi-Class Output Expense Appropriation#

These output classes grouped together under this MCOA contribute to the outcome of ensuring New Zealand becomes a successful low-carbon society that is resilient to climate change impacts on its climate, economy and lifestyle. These output classes share a particular focus on decreasing New Zealand's net emissions of greenhouse gases below business as usual levels in a cost-effective way.

Expenses and Revenue#

Reasons for Change in Appropriation#

Significant priorities that have been progressed in 2011/12 include considering the recommendations of the Emissions Trading Scheme (ETS) Review Panel and continuing to participate in international negotiations on a post-2012 international climate change agreement. Following the Conference of the Parties in Durban in 2011, the Government is considering decisions on the nature of any international commitments to 2020, including whether to sign up to a second commitment period under the Kyoto Protocol.

As a result of balancing the above priorities with those in Vote Environment, and undertaking various initiatives to improve the effectiveness of the Ministry, this Multi-Class Output Appropriation will decrease by $1.907 million to $9.023 million in 2011/12.

Output Performance Measures and Standards#

Land Use and Carbon Analysis System (M12)#

Scope of Appropriation and Expenses#

Revenue#

Reasons for Change in Appropriation#

This appropriation will decrease by $15.131 million in 2011/12 due to the merging of Votes Climate Change and Environment and a transfer of funding to a new Multi-year appropriation under Vote Environment from 2012/13. The total spending across the years remains unchanged.

Output Performance Measures and Standards#

Part 2.2 - Non-Departmental Output Expenses#

Intended Impacts, Outcomes and Objectives#

Emissions Trading Scheme (M12)#

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

This appropriation was approved during the year to fund the New Zealand Emissions Trading Scheme (NZ ETS) functions which were transferred to the Environmental Protection Authority.

With the establishment of the Environmental Protection Authority:

• the Ministry for the Environment transferred its Departmental Administration of Emissions Trading Scheme functions, and
• the Ministry of Economic Development transferred its Departmental Emissions Trading Implementation and Provision of Climate Change Unit Register and Information functions.

Output Performance Measures and Standards

Part 5 - Details and Expected Results for Other Expenses#

Part 5.2 - Non-Departmental Other Expenses#

Allocation of New Zealand Units (M12)

Scope of Appropriation

Reasons for Change in Appropriation

This appropriation will increase by $649.970 million to $1,558.975 million in 2011/12. This is primarily due to:

• an expense transfer from 2010/11 to 2011/12 for the allocation of units to pre-1990 forestry sector, and
• changes in the accounting treatment of expenditure with the allocation of New Zealand Units recognised earlier.

Impairment of Debt Relating to the New Zealand Emissions Trading Scheme (M12)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation will increase by $14 million to $15 million. This is due to the likelihood that the Crown will not receive a percentage of amounts owed by participants for the surrender of units, penalties issued and interest on those penalties.

In the past year, the Crown has encountered instances where participants in the Emissions Trading Scheme have been obliged to surrender units and have not done so and have subsequently entered receivership. To reflect historical collection experience, this appropriation has been increased.