AAUs See Assigned amount units

activity data Information such as official statistics on an activity regarding, for example, fossil fuel consump-tion, or animal numbers which is used together with emission factors to derive greenhouse gas inventory data.

Annex B/Annex B Parties Annex B of the Kyoto Protocol provides a list of developed country Parties and Parties that are undergoing the process of transition to a market economy (often referred to as 'economies in transition'), together with the quantified emission limitation or reduction commitment allocated to them under the Protocol. The Parties so listed are also Parties to the UNFCCC. New Zealand is included in Annex B.

Annex I Parties Annex I to the UNFCCC provides a list of developed countries, countries that are undergoing the process of transition to a market economy (or 'economies in transition'), and one regional economic integration organisation (the European Community). Those listed in Annex I that have signed and ratified the UNFCCC are referred to as Annex I Parties. Annex I has been amended since the UNFCCC came into force with the addition of several new countries, particularly from Eastern Europe. New Zealand is included in Annex I. The term non-Annex I Parties refers to Parties to the UNFCCC from developing countries.

assigned amount Emissions allowed in the period 2008 to 2012. For New Zealand, this is equal to five times 1990 emissions on a C02 equivalent basis. See also Kyoto forests below.

assigned amount units In an emissions trading regime assigned amount units is one term proposed for the tradeable form of Annex B Parties' assigned amount -the 'unit of trade'. These would be denominated in tonnes of C02 equivalent.

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BAU See Business-as-usual

bioenergy/biofuels Bioenergy is heat, electric power, light or transport fuels generated as a result of the conversion of a biomass resource. Biofuels include firewood and wood process residues as well as fuels such as ethanol from sugar cane and biogas from waste.

BPO Best Practicable Option, as defined in the Resource Management Act 1991.

BRANZ Building Research Association of NZ.

business-as-usual Continuing to operate with no new policy initiatives, i.e. what would happen if current conditions continued. carbon intensive Tending to produce a relatively large quantity of carbon emissions per .unit of output, or per unit of an activity.

carbon intensive Tending to produce a relatively large quantity of carbon emissions per unit of output, or per unit of an activity.

CDM See Clean development mechanism.

CERs Certified emission reductions (from CDM activities for example)

certificates Another general term for the unit of trade in an emissions trading regime

CFCs Chlorofluorocarbons. CFCs are ozone-depleting substances controlled under the Montreal Protocol. They are also greenhouse gases, but because of atmospheric cooling associated with ozone depletion, CFCs are judged to have zero net Global Warming Potential. Greenhouse gases that are also ozone-depleting substances are specifically excluded from the UNFCCC.

CH4 Methane is a greenhouse gas with emissions coming from ruminant livestock, landfills, coal mining and other sources. It has a 100-year Global Warming Potential of 21.

clean development mechanism The clean development mechanism (CDM) is one of the Kyoto Implementa-tion mechanisms. It is designed to assist both Annex I and non-Annex I Parties by allowing certified emissions reductions accruing from projects in developing countries to contribute to compliance with Protocol commitments by Annex B Parties.

climate-friendly A general term for technology, actions or attitudes that don't contribute, or contribute less than the norm, to the risks of climate change (e.g. carbon-free or low-carbon intensive means for generating energy).

CO2 Carbon dioxide is a greenhouse gas with emissions coming primarily from fossil fuel combustion and industrial processes.

CO2 equivalent Using carbon dioxide as a basis, Global Warming Potentials (GWPs) have been developed which provide a means of comparing the impact on the climate system of different greenhouse gases. This allows emissions of greenhouse gases to be given in CO2 equivalent terms, e.g. 1 tonne of CH4 is said to be equivalent to 21 tonnes of CO2 over a 100- year time period. COP Conference of the Parties to the UNFCCC.

COP Conference of the Parties to the UNFCCC.

CRI Crown Research Institute

dead weight loss A loss in economic welfare (value to individuals), for example when prices are increased and, correspondingly, lower levels of output are demanded and produced.

demand side decisions Decisions that affect the level of consumption of goods and services, such as electricity.

developed country Parties Developed countries (core OECD) and one regional economic integration organisation (the European Community) are listed in Annex II of the UNFCCC. Those listed in Annex II that have signed and ratified the UNFCCC are referred to as Annex II, or developed country, Parties.

discount rate The discount rate is a rate of interest or return used in 'present value analysis' to convert costs and benefits at different points in time into a value in today's dollars, e.g. at a discount rate of 10%, $1.10 in one year's time has a present value of $1. The choice of discount rate may reflect market interest rates and judgements about society's 'rate of time preference' (relative value placed on future rather than present day outcomes).

dynamic response effects Where there is a permanent change in relative prices, an on-going incentive is created to seek cost-effective opportunities, leading over time to the reallocation of resources and investment.

economic instruments Policy instruments that aim to change behaviour through explicitly changing prices of a product or activity.

EECA Energy Efficiency and Conservation Authority.

EES Energy Efficiency Strategy.

El Nino/La Nina Southern Oscillation The El Nino/La Nina Southern Oscillation (or ENSO) is a natural feature of the Earth's global climate system. El Nino is a periodic development of unusually warm ocean waters along the tropical South American coast and out along the equator. The Southern Oscillation is a seesaw of atmospheric changes that occurs between the southeast Pacific Ocean and the Indonesian region. Coupled together and reinforcing each other, the El Nino's oceanic and atmospheric components cause major shifts in the pattern of winds, cloudiness and rainfall. La Nina is an approximately opposite extreme between El Nino events which has weaker impacts on the climate (Basher, 1998). Research is currently underway to assess the potential effect of human- induced climate change on the frequency and severity of El Nino / La Nina events.

elasticity Elasticity refers to the degree of sensitivity or responsiveness of demand or supply to a change in one of the variables that influence demand and supply, such as price.

emission factors Emission factors are used together with activity data to derive greenhouse gas inventory data. They are usually expressed as mass of greenhouse gas per unit of activity, e.g. kilograms of CO2 per unit of energy, or kilograms of CH4 per animal.

emissions intensity Emissions per unit of output, or the quantity of emissions resulting from the production of something, or the undertaking of an activity.

emissions trading Emissions trading regimes allow participants to buy or sell emission units within a pre-determined cap or target that sets a level of allowed emissions. International emissions trading is one of the Kyoto implementation mechanisms.

ENSO See El Nino/La Nina Southern Oscillation

enteric bacteria Bacteria that live in the gut of animals. Enteric bacteria in ruminants, such as cattle and sheep, produce the methane these animals emit, with most of the emissions occurring via the mouth.

ESCO Energy service companies. These may provide, for example, 'packages' of technology, information, training and financing.

fossil fuels Coal, natural gas, and fuels derived from crude oil (e.g. petrol and diesel) are called fossil fuels because they have been formed over long periods of time from ancient organic matter.

FRST Foundation for Research, Science & Technology

GDP Gross Domestic Product.

Gg Gigagrams, the unit used in reporting greenhouse gas inventory information under the UNFCCC. One gigagram (1Gg) is the same as 1,000 tonnes (1kT).

Global Warming Potentials Global Warming Potentials (GWPs) provide a means of comparing the impact on the climate system of emissions of different green-house gases. The GWP index is relative to CO2 which is given a GWP of 1. As greenhouse gases have differing atmospheric lifetimes, GWPs also have a time component. A time horizon of 100 years is used in this document as the time horizon approved for reporting purposes under the UNFCCC including the first commitment period under the Kyoto Protocol. (See also C02 equivalent.)

grandparenting Grandparenting is an approach for distributing certificates at no charge to emitters based on set criteria such as an historical level of emissions.

greenhouse gas Greenhouse gases trap some of the heat the Earth radiates back into space. The greater the concentration of greenhouse gases in the atmosphere, the greater the potential for a warmer planet and changes to the climate. The greenhouse gases included in the Kyoto Protocol are CO2 , CH4 , N2 O, PFCs, HFCs and SF6 .

Green Package A Government Budget allocation specifically to assist the Government achieve its environmental and conservation objectives, including addressing the risks of climate change. The climate change policy areas benefiting from this funding include improving greenhouse gas inventories, and developing and implementing a comprehensive monitoring programme for carbon storage in New Zealand soils, indigenous forests and scrublands.

GWPs See Global Warming Potentials

HFCs Hydrofluorocarbons (HFCs) are a group of greenhouse gases used in a range of industrial applications. 100-year Global Warming Potentials for these gases range from 140 to 11,700.

INC/FCCC Intergovernmental Negotiating Committee for a Framework Convention on Climate Change.

industrial processes In the climate change context, industrial processes refer to activities such as iron, cement, steel and aluminium manufacture that release greenhouse gases as part of the manufacturing process independent of any emissions associated with energy transformation and use.

IPCC Intergovernmental Panel on Climate Change

IRL Industrial Research Limited

joint implementation Joint implementation is one of the Kyoto implementation mechanisms and involves project level trading between Annex I Parties.

KT Kilotonnes or thousands of tonnes.

'Kyoto forests' 'Kyoto forests' are a subset of forest sinks, those originating from new forests planted since 1 January 1990. Increases/ decreases in carbon stocks in these forests in the period 2008 to 2012 are added to/subtracted from a Party's assigned amount. In addition, decreases in carbon stock in the period 2008-2010 from any deforestation since 1990 is subtracted from a Party's assigned amount.

Kyoto (implementation) mechanisms The three Kyoto implementation mechanisms are international emissions trading, joint implementation, and the clean development mechanism.

legal entities Companies, firms, incorporated societies, environmental organisations and individuals.

LULUCF Land Use, Land Use Change and Forestry.

marginal cost of emissions abatement The cost of the next unit (i.e. tonne) of emission reduction, usually expressed as dollars per tonne of C02 equivalent.

merit order Actions to abate greenhouse gas emissions taken in the order of least to most costly.

MEPS Minimum Energy Performance Standards.

MT Millions of tonnes.

NGA Negotiated Greenhouse Agreement. An agreement between a company or organization and Government covering actions on greenhouse gas emissions reduction.

net carbon dioxide emissions CO2 emissions from energy and industrial processes less CO2 removals by forests.

NIWA National Institute of Water and Atmospheric Research

non-price barriers Where the response to changes in price may be altered or diminished as a result of factors such as lack of information, cultural practice or institutional constraints.

no regrets measures Measures which are worth doing anyway regardless of their climate change component, or, emission reduction measures where the economic benefits outweigh the costs..

NOAA National Oceanic and Atmospheric Administration (USA).

NPS National Policy Statement (under the Resource Management Act 1991).

NSSCCC National Science Strategy Committee for Climate Change.

N2O Nitrous oxide is a greenhouse gas with emissions coming from agricultural soils, nitrog-enous fertiliser, fossil fuel combustion and other sources. It has a 100-year Global Warming Potential of 310.

OECD Organisation of Economic Co-operation and Development

opportunity cost The cost of foregoing an alternative choice when making a decision, i.e. the benefits that could have accrued from the alternative option if the first option had not been chosen.

PAYE Pay As You Earn.

PFCs Perfluorocarbons are a group of greenhouse gases which are used in a range of industrial applications and are produced during aluminium smelting. 100-year Global Warming Potentials for these gases range from 6500 to 9200.

PGSF Public Good Science Fund

point of obligation The point at which the legal requirement to hold a certificate to offset emissions is placed. (There are also other 'obligations' such as reporting.)

present value Present value is a means for calculating the equivalence, in today's dollars, of costs and benefits in the future. See discount rate.

project level trading This is where an investor can receive credit for emissions reductions that are derived from a project they undertake that is external to their regular business (e.g. an industrial plant investing in a ruminant methane reduction project). Project level trading would enable real, verifiable, and additional emission reductions in sectors not covered under an emissions trading regime to earn credits that could be used by those under the regime.

R&D Research and Development.

RMA Resource Management Act 1991.

SBI Subsidiary Body for Implementation (see UNFCCC subsidiary bodies below).

SBSTA Subsidiary Body for Scientific and Techno-logical Advice (see UNFCCC subsidiary bodies below)

sequestration The verifiable removal and storage of CO2 from the atmosphere. The term is usually applied to forests and soils. The oceans also sequester CO2 , and the term is also applied to 'artificial' sequestration such as the reinjection of CO2 into gas and oil wells. (See also sinks.)

SF6 Sulphur hexafluoride is a greenhouse gas used in electrical switchgear and other industrial applications. Its 100-year Global Warming Potential is 23,900.

sinks In New Zealand the term 'sinks' is generally applied to planted forests which remove CO2 from the atmosphere (see also sequestration). More broadly, sinks are any process whereby greenhouse gases are removed from the atmosphere and include atmospheric chemical processes, uptake by terrestrial ecosystems, and oceanic physical and chemical processes.

supply side decisions Decisions regarding the level of production of goods and services

transaction costs The costs incurred by firms and individuals in making decisions or taking actions such as trading. Transaction costs include informa-tion, search, monitoring and administration costs. They usually exclude direct abatement costs associated with reducing emissions.

UNEP United Nations Environment Programme.

UNFCCC United Nations Framework Convention on Climate Change.

UNFCCC subsidiary bodies The UNFCCC has two permanent subsidiary bodies, the Subsidiary Body for Implementation (SBI), and the Subsidiary Body for Scientific and Technological Advice (SBSTA). The Ad Hoc Group on the Berlin Mandate (AGBM) and the Ad Hoc Group on Article 13 (AG13) were two temporary subsidiary bodies that were established for a set time, to achieve a specified outcome.

unit of trade The tradeable unit in an emissions trading regime e.g. 'certificate' or AAU denominated in tonnes of CO2 equivalent.

USEPA United States Environmental Protection Agency .

utility maximisation A behavioural assumption: given choice, individuals will usually try to maximise the benefit (and minimise the cost) to them.

WMO World Meteorological Organisation.

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