The passing of the Zero Climate Bill is a milestone to celebrate – but National is showing it fundamentally doesn’t understand the climate crisis and why such legislation is essential, says Rod Oram
The Zero Carbon Bill passed unanimously by Parliament last week will guide us on a challenging and rewarding journey. It will help us make our economy and society far more sustainable in economic, ecological, social and cultural terms. Along the way we will improve many of the ways we use natural resources and technology.
As the Productivity Commission wrote two years ago in its issues paper on the low emissions economy:
“…the shift from the old economy to a new, low-emissions economy will be profound and widespread, transforming land use, the energy system, production methods and technology, regulatory frameworks and institutions, and business and political culture.”
In all that the Zero Carbon Act will be an utterly crucial and pivotal framework. It sets our goals for emissions reduction by 2050 and a system of declining five-year carbon budgets to get us there. It also establishes the independent Climate Change Commission to assess our progress and to recommend changes to government policies, strategies and goals.
But rightly it is not a huge, all embracing piece of legislation that deals with all the actions we have to take. Almost all of those are still being developed by government, business and civil society. The first piece of enabling legislation is already in Parliament. It is designed to finally make the Emissions Trading Scheme an effective way to price carbon emissions. For the first 11 years of its life political compromises had rendered it useless.
Far more importantly, the actions we take will become far bolder as we gain confidence, skills and ambition on the way to a low emissions economy. We have to because the climate pledges we and almost every other country made in the 2015 Paris Agreement will fail to keep the rise in temperature to 1.5c.
But the Paris Agreement does include a “ratchet mechanism” to get countries to increase their commitments. This begins next year when countries communicate their updated, or second round of pledges. In 2023 the agreement calls for a global stocktake on climate mitigation action and the financial mechanisms for it. In 2025 countries make their third round of pledges, followed by another stocktake in 2028.
“…as the realities of climate change become increasingly apparent, it is inevitable that governments will be forced to act more decisively than they have so far.”
The increasing understanding of the dangers and damage of the climate crisis will ensure this process ramps up action by countries, the UN’s Principles for Responsible Investment programme concluded in a report earlier this year entitled The Inevitable Policy Response.
“Government action to tackle climate change has so far been highly insufficient to achieve the commitments made under the Paris Agreement, and the market’s default assumption appears to be that no further climate-related policies are coming in the near-term. Yet as the realities of climate change become increasingly apparent, it is inevitable that governments will be forced to act more decisively than they have so far.
“The question for investors now is not if governments will act, but when they will do so, what policies they will use and where the impact will be felt. The IPR project forecasts a response by 2025 that will be forceful, abrupt, and disorderly because of the delay.”
Smart and responsible companies are beginning to understand how rapid and far changing such responses have to be. Which is precisely why they are demanding certainty from their governments about the legislative frameworks that will be used to achieve them.
The nightmare of National
Yet, while National voted for the Zero Carbon Bill it pledged to substantially change the legislation within 100 days of it next forming a government.
Such irresponsible action would be a nightmare for all of New Zealand society, not just business. It could kneecap our response to the climate crisis in ways far more damaging than National’s decade-long destruction of the Emissions Trading Scheme after it took office in 2008.
In staking out this position, National is showing it fundamentally doesn’t understand the climate crisis and why such legislation is essential.
It is also playing an age-old short-term, divisive political game. Both run completely against the positive, co-operative political culture we need to respond to the climate crisis.
National lists seven changes it would make to the climate legislation. None of them are based on facts or common sense.
1. That the target for biological methane reduction be recommended by the independent Climate Change Commission.
This would be a duplication of effort, causing only a lengthy delay in setting a goal rather than identifying the much lower goal that National wants. The Commission would use the same New Zealand and international evidence as the Government has, such as the work of our Biological Emissions Reference Group and the UN’s IPCC. Anyway, the new goal would still have to be approved by parliament because it retains the ultimate decision making power.
2. That the Bill make clear the stated aim of the Paris Agreement is for greenhouse gas reduction to occur in a manner that does not threaten food production. Currently the Bill cherry-picks from the Agreement.
Actually, the references to food and farming in the text are minimal, and are in the non-binding parts of the text. Here they are in full:
“Recognising the fundamental priority of safeguarding food security and ending hunger, and the particular vulnerabilities of food production systems to the adverse impacts of climate change, this Agreement, in enhancing the implementation of the Convention, including its objective, aims to strengthen the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty, including by:
Increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience and low greenhouse gas emissions development, in a manner that does not threaten food production.”
It is clear a global revolution in food, farming and land use has begun, judging by the discussion about agriculture at Paris and in countless international, national and local forums in the years since, and in the ambitions of some major businesses and NGO alliances. Such a revolution is the only way we can feed more people and feed them better, while also significantly reducing the worldwide damage farming does to land, water and ecosystems, and reducing farming’s contribution to the climate crisis.
Farming-as-usual, or even some incremental improvements in the best systems available now is absolutely not an option. One simple summary of this is the “top 10 facts on food and climate change” the UN’s Food and Agriculture Organisation published at the Paris negotiations:
– 75 percent of the world’s poor & food insecure people rely on agriculture & natural resources for their livelihoods.
– FAO estimates that world food production must rise 60 percent to keep pace with demographic change. Climate change puts this at risk.
– According to the IPCC, crop yield declines of 10-25 percent may be widespread by 2050 due to climate change.
– Rising temperatures are predicted to reduce catches of the world’s main fish species by 40 percent.
– Although global emissions from deforestation have dropped, deforestation & forest degradation account for 10-11 percent of global greenhouse gas emissions. Emissions from forest degradation (logging & fires) increased from 0.4 to 1.0 gigatons of carbon dioxide per year 1990 – 2015.
– Livestock contributes nearly 2/3 of agriculture’s greenhouse & 78 percent of its methane emissions.
– Climate change can transfer risks of food-borne diseases from one region to another, threatening public health in new ways.
– FAO estimates that the potential to reduce emissions from livestock production (methane especially) is about 30 percent of baseline emissions.
– Currently, 1/3 of the food we produce is either lost or wasted. The global costs of food wastage is about US$2.6 trillion per year including US$700 billion of environmental costs and US$900 bn of social costs.
– Global food loss & waste generate about 8 percent of humankind’s annual greenhouse gas.
As I noted in my October 25 column, if you’re seeking insight and inspiration on these challenges you can read, for example, the recent report Growing Better: Ten Critical Transitions to Transform Food and Land Use from the Food and Land Use Coalition. Its members include the World Business Council for Sustainable Development, which in turn has major agribusinesses among its members, and the World Resources Institute.
Another of the multitude of other initiatives underway is the Commonwealth’s programme on regenerative agriculture which draws in part on indigenous knowledge in member countries.
We pride ourselves in New Zealand on being among the best farmers in the world, thanks to our skills as agricultural innovators and our rapid response to market signals. But there is little evidence we understand this global food and farming revolution. Instead our major farming lobbyists and the National Party that represents say that incremental change in existing practices is the best they can achieve, and our climate policies should be tailored to them. But that would shift an unfair burden and cost of change to all other sectors of the economy. Even worse, if farming doesn’t pull its weight, then we will fail to meet our international climate commitments.
3. Strengthen provisions that consider the level of action being taken by other countries and allow targets to be adjusted to ensure we remain in step with the international community.
The response to the climate crisis ranges vastly from a handful of countries that are on track to decarbonise their economies to those which are wildly off track. For chapter and verse on this, read the analysis of Carbon Action Tracker, starting with its report on New Zealand. The conclusion includes us in the “insufficient” category of the analysis: “If all government targets were in this range, warming would reach over 2c and up to 3c.”
Thus it is impossible to work out in aggregate the responses of the countries we compete against and peg our goals, policies and strategies to them. Even if we could, there would be a lag in our response that would further disadvantage us. Thus, each country has to plot its own path of acting as quickly and effectively as it can. Those that do so will reap economic rewards from their carbon mitigation and adaptation to climate change.
4. That the Bill ensure the Commission consider economic impacts when providing advice on targets and emissions reductions.
This is already deeply embedded in our policy development and our response to climate change. Moreover, the analytical disciplines for doing so are developing fast globally. Examples include:
– The ETS mechanisms over the past decade that award free carbon credits for emissions intensive and trade exposed companies.
– ProdComm’s work on the low emissions economy over the past three years.
– The analysis of our Interim Climate Change Committee (the precursor to the permanent Commission established by the ZCB), such as its reports this year on agriculture and the electricity sector.
Crucially such work identifies economic pluses from acting on climate change (such as greater investment, better technology, new jobs and improved efficiency), economic negatives (such as stranded assets) and transition costs (such as helping sectors and companies invest in change, and ensuring a just transition for citizens so nobody bears an unfair burden).
This is far superior to National’s mindset of a one-eyed focus on negative costs, which it uses as an excuse for inaction and for letting particular sectors or players continue with largely business-as-usual.
5. That the Bill ensure the Commission consider the appropriate use of forestry offsets, and have regard for the carbon sink represented by tree crops, riparian planting, and other farm biomass.
This is a valid contribution by farming to our climate response. But work on this is already underway, such as the description of the issues involved in Action on Agricultural Emissions, the April 2019 report by the Interim Climate Change Committee. It will obviously be on the agenda of a recently established primary sector / government working group. It is working on ways to measure farm emissions, spread best practice on how to reduce them and to devise a pricing mechanism for emissions. The group has a 2025 deadline for its work.
6. That emissions budgets be split between biogenic methane and carbon dioxide as recommended by the Parliamentary Commissioner for the Environment.
The ZCB has already done that. It sets separate targets for CO2 and methane. In due course, the Climate Change Commission will set five-year budgets for them, which will reduce over time to guide emitters to the long term goals.
Again, it’s important to emphasise that the Commission will be reviewing regularly the effect of policies, the rate of emissions reduction, and the economic and technological factors in that complex matrix of issues. Based on that analysis it can recommend reductions or increases in the goals to the government of the day, with parliament having the final decision on whether to adopt the changes.
Simon Upton, the Parliamentary Commissioner for the Environment, however, took his argument far further in his proposals in March. He said forestry credits should only be available to farmers to offset their emissions. That would mean CO2 emissions from industry, transport, infrastructure, housing and all other uses of fossil fuels will need to be fully reduced in real terms, not partially offset by forestry credits.
Upton acknowledged that would massively increase the cost to the economy of CO2 mitigation. But he said it would also achieve real cuts in emissions while reducing the land switched from farming to forestry and cutting the risk of disease and fires in forests re-releasing the CO2 sequestered in trees.
If National sought to implement Upton’s entire vision it would change our legislative framework far more radically than National’s neutering of the ETS a decade ago. It would fundamentally undermine the climate strategies and investments business is warming up to. It is precisely the policy shock business adamantly and rightly opposes.
7. That the Bill include a greater commitment to investment in innovation and research and development to find new solutions for reducing emissions.
Investing in innovation and R&D, and more importantly commercialising them, are mechanisms crucial to reducing our emissions, as ProdComm has clearly identified in its climate work.
National has failed to demonstrate it understands the climate crisis, our gains from responding to it and the pivotal importance of the Zero Carbon Bill in tackling it.
The Government responded to the ProdComm’s very comprehensive report on our transition to a low emissions economy in July. The paper outlines how it has accepted all but one of the Commission’s 77 recommendations and has plans underway, or in preparation for all of them, including on innovation and R&D.
But driving such improvements in our economy are second order issues for other policies, strategies and legislation guided by the ZCB. They are not first order issues that should be in the framework legislation.
In summary, National has failed to demonstrate it understands the climate crisis, our gains from responding to it and the pivotal importance of the Zero Carbon Bill in tackling it.
In voting for the Bill but promising to compromise it significantly at the first chance it has, National has proved it can’t be trusted on our climate or other environmental challenges.
In playing fast and loose, it has created a significant political liability for itself, even among business, its traditional party stalwarts.
