New Zealand's First Emissions Reduction Plan a Critical Turning Point

Chief Executive Jo Hendy sets out the Commission’s expectations for the Government’s first Emissions Reduction Plan.

By Jo Hendy, Chief Executive, He Pou a Rangi Climate Change Commission

Aotearoa New Zealand will enter a critical new phase in climate action when the Government releases its first Emissions Reduction Plan next month.

The Emissions Reduction Plan will outline the path the Government has decided to take over the next three years to achieve the country’s emissions reduction targets.

The Government will need to have considered the independent advice that He Pou a Rangi Climate Change Commission delivered last year, as well as evidence from its own public consultation, and the advice of a wide range of government ministries and officials.

It is an incredibly important piece of work and will have significant impacts for all New Zealanders.

The Emissions Reduction Plan needs to be able to deliver an immediate change in gears in our national response to climate change. We need strategies that will drive strong emissions reductions across all sectors, and that give certainty around the direction of travel for businesses, investors and communities.

So what should we expect to see in the first plan? In a few words: urgency, decisiveness, cohesion, and collaboration. A comprehensive plan with a clear pathway to meeting Aotearoa New Zealand’s first emissions budget, with Government working alongside business, industry and Iwi/Māori.

In more detail, here are some of the priority action areas that we will be looking for in the ERP:

Strengthening the NZ Emissions Trading Scheme (NZ ETS)

The Government must outline work to improve the operation of the NZ ETS, the flagship policy tool of climate action in Aotearoa New Zealand.

This includes reviewing industrial allocation, establishing effective market governance, and developing levers that ensure the NZ ETS drives the reduction of gross emissions.

It’s also imperative to identify complementary policies to address the barriers or market failures preventing emissions reductions that the NZ ETS will not overcome.

A clear plan will be needed for the recently announced Climate Emergency Response Fund, made up of $4.5 billion of proceeds from the NZ ETS.

Treaty partnership and a Māori Emissions Profile

Government should provide detail on how it will partner with Iwi/Māori to develop and implement plans and policies across all aspects of the transition to a climate resilient, low emissions future. This will need to uphold the principles of Te Tiriti o Waitangi/The Treaty of Waitangi to manage impacts and ensure an equitable transition for Iwi/Māori.

All agencies need to ensure that Iwi/Māori have the tools and resources they need to equitably participate in the transition, and to ensure the Crown-Māori partnership is upheld.

A distinct Māori Emissions Profile should be developed, which quantifies total Iwi/Māori contributions to national emissions and emissions reductions, to help address inequity in the evidence and information used to inform policy.

Research and development should be directed towards mātauranga Māori, to enable innovation and an equitable knowledge base.

Funding should be available to support Iwi/Māori that are not economically able to transition equitably.

The role of forests and accelerating a bioeconomy

Forests have an important strategic role to play but we need to make sure we have ‘the right trees in the right places’. The Government needs to support landowners to significantly expand native forests along with scaling up pest control. It’s important for the Government to get the policy settings right so we don’t see uncontrolled afforestation of permanent pine forests. A strategy is needed for accelerating the bioeconomy, and should outline the role that forests and other crops could play in supplying it. This should include research and innovation to drive down costs and to test out commercial applications, and collating data on existing biomass resource supply and demand to identify potential supply chains and to enable industry to plan.

Reducing biological emissions from agriculture

We need to reduce agricultural emissions. The Government should accelerate change through an agricultural emissions pricing mechanism, extending services to support changes to on-farm practices, targeted investment in research and development, and assisted deployment of new technology.

Action on transport

The Government needs policies that ensure all light vehicles entering New Zealand by 2035 (or 2030 if possible) are low emissions, and to accelerate the uptake of electric vehicles.

There should also be policies to help local authorities encourage and enable more walking, cycling, public transport and shared transport to displace vehicle use.

New Zealand needs to fully decarbonise heavy transport and freight by 2050. To set us on that path, the Government needs to work in partnership to develop a national low-emissions freight strategy. The strategy should cover ground transport, shipping and aviation.

Transitioning to a low-emissions energy system

The Emissions Reduction Plan needs to include plans for a National Energy Strategy. The energy transition in Aotearoa will require a coordinated approach to support low-emissions technologies, infrastructure, regional development, and workforces, while making sure our energy system is reliable and affordable. This transition and transformation require partnership with Iwi/Māori, and collaboration with business, industry and other stakeholders.

The strategy should include a commitment to phase out coal for electricity generation, the introduction of a renewable energy target of at least 50% of energy consumption and scaling up investment into energy efficiency to help firms and ratepayers save money and lessen demands on the electricity grid.

Urban form and buildings

The Emissions Reduction Plan can reduce emissions by setting out how we change the way we plan and build our environment, our homes, workplaces, towns and cities.

We hope to see policies and approaches to enable this, including measuring the emissions impacts of urban development decisions, and using this information to drive better decisions across infrastructure, buildings and transport systems.

The plan should set out how the Government will drive the transition to higher performance, lower-emissions buildings, including retrofitting existing buildings, and how it will increase energy efficiency assistance to low-income households, to ensure they can benefit from lower emissions, lower energy costs and healthier buildings.

Reducing waste and developing a circular economy

The country’s waste strategy needs to be updated. The new strategy should set goals to reduce biogenic methane, ensure all landfills that accept organic waste have gas capture, and prioritise ongoing data collection across the waste sector.

The recently launched consultation for “Transforming Recycling” is a welcome step and we look forward to further actions to move Aotearoa to a more circular economy, with a clear governance structure including tasking a minister and lead agency.

Reducing industry emissions

The ERP will need to demonstrate how the Government will work alongside industry to reduce barriers for switching away from fossil fuels and improving energy efficiency for process heat. There should be support and funding for innovation to decarbonise hard-to-abate industrial sectors, such as steel, cement and aluminium.

An equitable transition

The transition will impact some communities, sectors and regions more than others. These impacts need to be managed to ensure the transition is equitable.

The ERP will need to show how Government will partner with businesses, workers and Iwi/Māori in industries such as agriculture and oil and gas, to develop industry transformation and emissions reduction plans. These should outline investment, innovation, objectives and skill needs.

There also need to be policies to support workers in impacted industries to retrain and move into low-emissions industries, and to support new and evolving low-emission industries.

Assessing progress

Of course, the ERP is just the beginning.

Later this year, the Commission will start work to monitor the Government’s progress towards meeting its emission budgets, the emissions reduction plan, and the country’s 2050 targets.

It will be essential for the Government to gather quality information that helps the Commission understand whether the goals of policies are being met – so we can learn about what works and what doesn’t work for future ERPs, policies and programmes.

The Emissions Reduction Plan will be a major leap forward for Aotearoa New Zealand but, of course, it is just a plan and it is the first one.

Most important will be the step change in our country’s climate response and emissions reductions that need to follow – ensuring that the transition is moving in the right direction, and at the right pace.