2011-2012 Annual Report - Full Version - PDF - Palmerston North ...

Carbon Credits◊◊PNCC has an agreement with the Crown toreduce carbon-dioxide equivalent (methane)emissions from 2006 to December 2012 in returnfor being awarded carbon credits. This will beachieved through the use of the cogenerationplant at the City’s landfill. PNCC is required tomonitor the methane destruction and electricitygeneration (which determines the credits) usingan approved methodology. From 2008 to 2012this will be independently audited in arrears by aUN-certified climate change auditor.Under a Kyoto mechanism PNCC has soldexpected carbon credits from 2008 to December2012 to the Austrian Government in a contractbetween PNCC and KummunalKredit (asagent for the Austrian Government). Duringthe year carbon credits have been generatedand included in income. The agreementincluded minimum required carbon creditsto be generated. During the year it has beenagreed that should these minimum levels notbe achieved no consequential remedies will beenforced and therefore no provision is requiredfor any future generation shortfall.Emission Units◊ PNCC owns land and forests subject to theNew Zealand emissions trading scheme. Thishas implications should the land be deforestedwith the Government providing compensationemission units for this restriction. PNCC hasreceived 13,220 compensating emission unitsrelating to qualifying pre-1990 forests whichare recorded at a nil value. No provision hasbeen made for the remaining possible creditentitlement that may be received.◊Should forest land be deforested, PNCC may beliable for deforestation penalties relating to pre-1990 forest land of approximately 620 hectares.As it is intended to re-plant this land in forests,with no current intention of deforestation, noliability is provided.Unquantified contingent liabilities◊ There are various claims that PNCC are currentlycontesting which have not been quantified dueto the nature of the issues, the uncertainty of theoutcome and/or the extent to which PNCC havea responsibility to the claimant. The possibilityof any outflow in settlement in these cases isassessed as remote.Contingent assets◊ PNCC enables sports clubs to construct facilities(eg club rooms) on reserve land. These clubscontrol the use of these facilities and PNCC willonly gain control of the asset if the club vacatesthe facility. Until this event occurs these assetsare not recognised as assets in the Statement ofFinancial Position.Financial Statements Note 27Palmerston North City Council Annual Report 2011/12175