The Climate Change Commission has released a landmark report on decarbonising the economy. Here’s everything you need to know
On Sunday, the Climate Change Commission released an historic report calling for “transformational and lasting change across society and the economy” in response to the climate crisis.
The report found New Zealand will miss its emissions reduction targets if it doesn’t engage in “strong and decisive action now” and recommended ambitious limits on the amount of greenhouse gases the country should be allowed to release over the next 15 years.
The Commission’s draft advice to the Government includes three emissions budgets covering five-year periods to 2035, recommendations on how to meet these budgets and a finding that New Zealand’s target under the Paris Agreement “is aligned with an approach – that if adopted by all nations – carries major risks in the ability to limit global warming to 1.5°C”.
New Zealand is currently on a pathway to emit 112.5 million more tonnes of greenhouse gases between 2022 and 2035 than the Commission’s budgets call for.
Reacting to the release of the report, Jacinda Ardern said the Government would revise its Paris target.
“Reaching our emissions reduction targets by 2050 is both achievable and affordable according to the Commission’s advice,” she said.
“The Commission’s draft advice sets out an achievable blueprint for New Zealand to become a prosperous, low-emissions economy. The report demonstrates we have the tools we need to achieve our target, but calls on us to accelerate our work. As a Government we are committed to picking up the pace and focusing much more on decarbonisation and reducing emissions rather than overly relying on forestry.”
Here are the key takeaways from the report:
Urgent, equitable change needed
The Commission says its budgets, which call for New Zealand to emit far less over the period to 2035 than it is currently projected to, can be met without the need for any new technology.
“Transformational and lasting change across society and the economy will be needed, but the Commission’s analysis shows the tools to start the work to reach our targets and address climate change in Aotearoa already exist.”
However, those tools are not currently being used to the fullest extent.
“Current government policies do not put Aotearoa on track to meet our recommended emissions budgets and the 2050 targets.”
Even the gentlest of the Commission’s recommended cuts still involve emitting far less than the country is projected to in the near future. Over the first budget period, between 2022 and 2025, New Zealand would emit an average of 67.7 million tonnes a year – down from currently expected 68.7 million. Then the gap widens. For the second period, between 2026 and 2030, average annual emissions would drop to 57.3 Mt, instead of the projected 63.9 Mt. In the final period, from 2031 to 2035, the country would emit an average of just 44.6 Mt rather than the forecast 57.8 Mt.
These represent cuts from 2018 emissions of 2.1 percent, 17.2 percent and 35.5 percent, respectively.
The Commission found the cost of action was lower than previously expected – less than 1 percent of projected annual GDP. Under current policy settings, GDP is expected to be $512 billion in 2050 (and that doesn’t take into account the cost of not acting, in terms of the price of carbon offsets and the impacts of worsened climate change). Meeting the targets in the Zero Carbon Act would still see GDP reach $508 billion that year.
“This is the equivalent of taking another 6 to 7 months to get to the same level of GDP as under current policy settings. Our modelling shows that Aotearoa can decarbonise the economy while continuing to grow GDP.”
Acting sooner rather than later is also important because some changes take time to bed in. “2050 is not far away – particularly if you consider the life span of infrastructure, vehicles, buildings – and people,” the Commission wrote.
While the overall economy is likely to be unaffected or even benefit from the transition, certain communities may be disproportionately affected. The Commission recommended the Government target assistance and support to low-income and Māori communities which may feel the brunt of decarbonisation.
Most heavy industry would continue to operate at current levels under the Commission’s modelling, except for the Tiwai Point aluminium smelter and the Methanex methanol facility, which would close. Across the coal mining and oil and gas sectors, between 600 and 1,100 more people would lose their jobs by 2030 – in addition to the 600 lob losses already projected under current policy settings.
However, new job opportunities would arise in the circular economy, in biofuel and hydrogen research, production and distribution and in other new technologies.
“A well-signalled transition will allow time to plan and support workers to retrain and redeploy into new areas of work,” the Commission found, recommending the Government launch an Equitable Transitions Strategy.
Centralised planning will also be needed to implement the response – the Commission recommended a new budget appropriation specifically for climate change be created.
Decarbonisation will affect every part of the economy, the Commission said.
Transport will be one of the most important targets for change.
“Our analysis shows that reducing transport emissions is crucial to meeting our emissions budgets and reaching net zero by 2050 – this will have an immediate and lasting impact,” the Commission wrote.
Vehicle travel should be rapidly electrified, with incentives for purchasing EVs an urgent policy priority and a ban on fossil fuel vehicle imports by 2035 on the cards. Access to walking, cycling and public transport should also be upgraded.
In freight, trucks should be decarbonised and significant amounts of freight should be moved off the roads and onto rail and coastal shipping, which are easier to electrify.
Expected significant uptake of electric vehicles would see electricity demand skyrocket. By 2035, the Commission wants to see considerable new renewable electricity generation capacity built. This doesn’t have to take the form of hydroelectric stations, which can have negative environmental impacts. Instead, all of the new demand could be met with new wind, solar and geothermal generation.
Fossil fuel use in heating and industry should also be phased out where possible. The Commission expects no new natural gas connections to buildings would be made after 2025. In industry, boilers should be rapidly converted to electricity or biomass, at an equivalent rate of one or two large dairy factories per year.
The report envisions the “near complete decarbonisation of low and medium temperature heat used in industry, electricity generation, energy use in buildings and land transport”.
Some of that biomass could come from a new approach to forestry. Traditionally, New Zealand has relied on forestry to offset growing emissions. The Commission wants to see far less reliance on this, except in the case of residual emissions from hard-to-decarbonise sources like heavy industry and air travel.
“Forests have a role to play, but we can’t plant our way out of climate change,” the Commission wrote.
“Relying heavily on forestry before 2050 is likely to make maintaining net zero long-lived greenhouse gas emissions after 2050 difficult. It would delay action, lead to higher cumulative emissions and make the job ahead of us more difficult.”
Waste from plantation forests should be turned into biofuel and new, permanent native forests should be planted to serve as a long-term sink for residual emissions.
In agriculture, methane reduction targets can be met purely through existing farm management practices and the use of selective breeding for low emissions sheep – a proven method. New technologies like methane vaccines or inhibitors or selective breeding for low emissions dairy cattle are not needed to meet the current targets. However, if they do develop, New Zealand could and should overachieve its targets.
“There are changes farmers can make now to reduce emissions on their farms while maintaining, or even improving, productivity. This includes reducing animal numbers and better animal, pasture and feed management. Policy support is needed to make this happen.”
Other sectors like waste and buildings will also need to decarbonise. The Commission expects to see a quarter less waste end up in landfills by 2035. Buildings should also be more energy efficient at that time.
Stakeholders and members of the public can submit on the advice until March 14 and the final recommendations will be released on May 31. The Government has until the end of the year to accept the Commission’s proposed budgets or come up with its own and to create an emissions reduction plan for meeting the budgets.