Analysis: The Climate Change Commission has called for “transformational and lasting change across society and the economy” to respond to the climate crisis. Marc Daalder reports
In an historic, landmark report, the Climate Change Commission finds New Zealand will miss its emissions reduction targets if it doesn’t engage in “strong and decisive action now” and recommends 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”.
Although ambitious, the Commission’s emissions budgets can be met through actions and technologies available now, not theoretical innovations that have yet to occur.
“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.”
They can also be met without an over-reliance on planting new exotic or native forests. While these will play a role in reducing emissions, it will be in a sustainable manner where the primary focus remains on reducing gross emissions.
“Aotearoa must focus on decarbonising and reducing emissions at the source. As a country, we can no longer rely on forests to meet our climate change targets,” the Commission wrote.
“Current government policies do not put Aotearoa on track to meet our recommended emissions budgets and the 2050 targets.”
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 was committed to reducing emissions in line with the Commission’s recommendations.
“The Commission’s draft advice sets out an achievable blueprint for New Zealand to become a prosperous, low-emissions economy,” she said.
“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.
“Achieving our emissions reduction targets require both an enhanced and sustained response and the Government is committed to that. The Commission’s advice shows we’ve made a good start, highlights the economic opportunities ahead and proves it is both affordable and achievable.”
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.
Read more: Key takeaways from the Climate Change Commission’s advice
Read more: Climate Minister James Shaw: ‘We can do this’
Read more: The climate science behind the Commission’s findings
The budgets
The Commission’s budgets chart a pathway over the next 15 years in which New Zealand emits considerably less than it is currently projected to. That involves steep cuts across every sector of the economy, but particularly in transport and other sources of long-lived gases like carbon dioxide.
By 2035, under the Commission’s advice, transport emissions would nearly halve from 16.6 million tonnes a year to just 8.8. Those reductions are particularly drastic when compared to New Zealand’s current trajectory, which would see 14.4 million tonnes of emissions from the transport sector in 2035.
In heat, industry and power, emissions in 2035 would be 6 million tonnes lower under the Commission’s pathway than currently projected. Forestry, meanwhile, would receive a big boost. While trees currently suck 9.5 million tonnes of CO2 out of the atmosphere every year and were expected to up that to 10.7 million by 2035, the Commission wants to see that figure increase by more than half to 14.5 million tonnes.
Agriculture, meanwhile is responsible for significant emissions in both short-lived methane and long-lived gases. The sector is currently responsible for 90 percent of biogenic methane emissions, totaling about 1.2 million tonnes of CH4 a year. That figure was expected to decline slightly to 1.07 million tonnes by 2035 but the Commission’s pathway would see it drop further to 0.97 million tonnes by that date.
Long-lived agricultural emissions mostly come in the form of nitrous oxide, a potent gas which is hard to abate as it comes naturally from the urine of livestock. Given this, the long-lived emissions cuts for agriculture are less steep than in other sectors – the Commission wants it to fall from 8.3 million tonnes of CO2 equivalent (Mt CO2e) in 2018 to 6.9 million by 2035.
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 budgets would not be able to be met by offshore mitigation or the purchase of carbon credits. Domestic action alone would be permitted to reach the emissions cuts required.
“The only circumstances that at this stage would justify the use of offshore mitigation is as a last resort in exceptional circumstances beyond the Government’s control, such as force majeure events, where domestic measures cannot compensate for emissions impacts,” the Commission wrote.
The Commission’s emissions budgets will also lead to changes to the Emissions Trading Scheme. As it stands, the effective floor and ceiling on the carbon price in the ETS is $20 and $50 respectively. However, the Commission would like to see the ceiling rise to $70 as soon as possible and rise 10 percent a year from there, plus inflation. By 2030, the market should allow for at least a price of $140 a tonne. The floor should also be brought up to $30 as soon as possible, the Commission said, and increase by 5 percent plus inflation each year thereafter.
Need to act now
The Commission’s advice emphasises the importance of acting now. In part, this is because urgent emissions reductions are needed to reduce the threat of climate change.
The Intergovernmental Panel on Climate Change (IPCC) reported in 2018 that the world needed to halve emissions by 2030 if it wanted a serious chance at limiting global warming to 1.5 degrees above preindustrial levels. For more on the climate science undergirding the Commission’s report, see David Williams’ review of the evidence.
Global warming is dependent on the net amount of carbon in the atmosphere. Globally, we’ve chosen, via inaction, to use up the vast majority of our carbon budget over the past three decades despite our knowledge that there was only so much left. The choices before us now are to go over budget and contribute to disastrous warming or to drastically curtail our emissions to a degree greater than any time in human history.
In mid-April, at the height of global lockdowns in response to the coronavirus pandemic, experts estimated emissions in 2020 would be 5.5 percent lower than the previous year. But to meet the 2030 target of halving the world’s emissions, we must see greenhouse gas output decline by 7.6 percent every year for the rest of the decade.
The longer we wait, the worse the problem gets.
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.
For example, fossil fuel heating systems in buildings can last for two decades or longer. That means gas or coal systems installed now will still be emitting in 2041, regardless of what other policies are created to reduce emissions.
“The homes, buildings and infrastructure we build now will still be here in 2050. We need to think about our choices with climate change in mind. That means using low emissions technologies and prioritising energy efficiency,” the Commission recommended.
Likewise, vehicles that enter New Zealand today will be driven until they are 19 years old. We could be using inefficient fossil fuel vehicles well into the 2030s, even if the fleet begins to rapidly electrify in the coming years.
Lastly, the massive gap between where we are and where we need to be provides another reason for urgent action. The Commission found New Zealand was way off track and would be emitting 6.3 million more tonnes of long-lived gases like carbon dioxide and nitrous oxide than it was meant to in 2050. Biogenic methane – a short-lived gas from livestock and waste decomposition – would fall 12 percent by 2050, falling far short of the current target to reduce biogenic methane emissions by 24 to 47 percent by that date.
Urgent action doesn’t need to mean reckless action. The Commission outlined a wide range of principles to ensure the transition to a low-emissions Aotearoa is carried out justly, with regard for workers in fossil fuel-reliant industries and low-income and Māori communities which may be hit hardest.
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.”
Transport
The advice identified transport as the sector with the most potential for swift and deep emissions cuts.
“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.
“This means changing the way we travel and move goods. New Zealanders should be able to walk and cycle more. Freight will need to come off the road and onto rail and shipping. To lower emissions we will need to change the way we plan and build our cities to make it faster and easier to get around. Having an integrated public and shared transport system both locally and across Aotearoa will encourage a shift in the way we live and travel.”
The Commission called for an “integrated national transport network” which allows people to get around by walking, cycling, public transport – pretty much anything other than their own private vehicle.
More working from home would see the average household travel distance drop 7 percent by the end of the decade.
By 2035, the end of the third emissions budget, the Commission wants to see more than half of the distance travelled by light vehicles be in electric vehicles (EVs). By the same date, more than two fifths of the light fleet should be EVs, after imports of fossil fuel vehicles are banned some time between 2030 and 2035.
Getting to those benchmarks won’t happen on current projections without more intervention in the vehicle market.
“An ambitious package of policies is needed to address these barriers. Fiscal incentives to lower the upfront costs of EVs will be an important part of this and should be introduced as a matter of urgency,” the Commission recommended.
In the meantime, efforts to lower the emissions of fossil fuel vehicles with a vehicle emissions standard were endorsed by the Commission.
Heavier transport can also be decarbonised, with 84 percent of medium trucks and 69 percent of heavy trucks imported in 2035 being electric. Moving freight off the road could also reduce emissions – by the end of the decade, 4 percent of freight-tonne kilometres should be moved from the road to electrified rail and coastal shipping.
That means increased electrification of rail by 2025 and the electrification of ferries and coastal shipping after that date. The use of biofuel blends could also decarbonise heavy transport, with the Commission recommending New Zealand build capacity to produce 70 million litres of low emissions fuel per year by 2030 and double that from 2035.
That would require another seven plants with the same capacity for biofuel production as Z Energy’s Wiri facility.
Agriculture
Agriculture is responsible for half of our emissions when converted to carbon dioxide equivalent. However, the vast bulk of this is in the form of methane, a short-lived gas which has a powerful warming impact on the atmosphere but wanes after a few decades. That requires a different approach from long-lived gases like carbon dioxide, which have less impact per tonne but will still be around to heat the globe for centuries – if not millennia – after methane breaks down.
Alongside methane, the primary sector releases considerable amounts of nitrous oxide – a long-lived gas which is more powerful than carbon dioxide. It will be difficult to reduce methane and nitrous oxide emissions to zero without reducing herd sizes to zero, but some reductions are called for and tools exist to realise them now.
“Agriculture has a large role to play. There have been improvements in the last few decades, but more action is needed to bring everyone in line with the best,” the Commission wrote.
“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.”
Dairy, sheep and beef animal numbers would be reduced by greater numbers than projected under current policies, with dairy, sheep and beef herd numbers likely to shrink about 15 percent by 2030. From 2025, some dairy land may also be transitioned into horticulture – around 2,000 hectares per year.
Despite this, productivity is expected to remain stable – the dairy sector would be producing the same tonnage of milk solids per year in 2035 as it did in 2018, with a smaller herd and fewer emissions, while sheep and beef farmers would produce slightly more meat even as livestock numbers and emissions fell.
Also from the middle of the decade, selective breeding for lower emissions sheep would become common practice, reducing biogenic methane emissions from sheep and beef farming by 1.5 percent by the end of the decade and 3 percent by 2035.
In addition to meeting the Commission’s budgets, adopting these existing practices and technologies would allow the agricultural sector to meet the lower level of the 2050 methane reduction target. New technology like methane inhibitors or vaccines would likely be needed to meet the upper level of nearly halving emissions from 2017 levels – or even surpass it. In one modelled scenario, biogenic methane was reduced 59 percent by 2050.
“It is likely these technologies will become available, and this would increase the speed and efficiency of reducing methane emissions,” the Commission found.
Forestry
For the forestry sector, the Commission outlined a far-reaching vision anchored on three tenets: That forestry can not be used to offset stable gross emissions in the long-term, that there is a role for permanent native forests in offsetting residual gross emissions in the long-term and that there is an untapped potential for biofuel in the sector.
“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.”
That’s because any given hectare of plantation or permanent forest sequesters less and less carbon over time, but must be kept in forest to stop the carbon it has already absorbed from returning to the atmosphere. Given enough time, and with no meaningful reductions to gross emissions, a net zero strategy premised on forestry means you eventually run out of land.
Read more: Why can’t we plant our way out of climate change?
The Commission still envisions a limited but crucial role for forestry offsets. That comes in the form of native forest, which sucks up more carbon over a longer time period, but doesn’t absorb as much as exotic pines do in the shorter horizon of a couple of decades.
New native forests should begin to be planted over the next 10 years so they can come to fruition in time to have an impact. However, that planting programme would reach maturity in 2030 and continue for at least two decades. It would be targeted at less productive land, often marginal land on high-country sheep and beef farms but could be carried out in such a way to reduce the impact on farmers’ operations. The farmers themselves could also benefit from carbon credits earned by these forests.
“There is an estimated 1.15 to 1.4 million hectares of erosion prone land, much of which would not be suitable for production forestry but could be suitable for converting to permanent forest,” the Commission noted. Some 740,000 hectares of this may regrow forests on its own without new planting needed if pests are managed.
Specifically, the Commission says 300,000 hectares of new native forest could be established by 2035. From the middle of this decade, the Commission wants to see 16,000 new hectares planted in native forest a year, ramping up to 25,000 from 2030 on. Exotic afforestation, meanwhile, would slump from 25,000 new hectares a year in the 2020s to “no new exotic afforestation for carbon removals by 2050”.
The emissions these forests would be offsetting are those long-lived gas emissions that cannot be abated by 2050. For example, air travel may not yet be fully decarbonised or some industrial processes may still require the burning of fossil fuels to reach appropriate temperatures.
“With a sustained high rate of planting through to 2050, new native forests could provide a long-term carbon sink of more than 4 MtCO2 per year, helping to offset residual long-lived greenhouse gas emissions from hard-to-abate sources,” the Commission proposed.
Lastly, the Commission expects plantation forestry will continue apace and sees another decarbonisation potential in that industry.
“Bioenergy offers a low cost route for decarbonising some sectors, including process heat. Overall, there appears to be a large potential biomass supply from collecting and using waste from forestry and wood processing,” the Commission found.
Moreover, “timber can displace emissions intensive materials such as steel and cement in buildings. This reduces embodied emissions and can lock up carbon for several decades.”
However, in the third budget period, between 2031 and 2035, the Commission wants New Zealand to “ramp down planting new exotic plantation forests for carbon storage”.
Energy
In the power sector, the Commission said its emissions budgets could be met without the construction of new hydroelectric stations. However, they do involve significant investment in new wind, solar and geothermal electricity generation as demand spikes due to population growth, the uptake of electric vehicles and the decarbonisation of industry.
“We need to almost eliminate fossil fuels. This means ending the use of coal,” the Commission wrote.
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”.
Fossil fuel baseload generation should be phased over the first budget period, emissions from geothermal generation should be reduced in the second period and the third period would see the renewable generation base greatly expanded and 95 percent renewable generation achieved.
Much of the exact timeline depends on the fate of the Tiwai Point aluminium smelter, which announced in January that it would remain open through the end of 2024, at least. As the smelter uses 13 percent of the country’s current electricity supply, its eventual exit could free up massive amounts of renewable power from the Lake Manapouri hydro scheme and defer the need to build new generation for a few years.
The Commission expects some new generation to be built over the next few years, then a pause as Tiwai’s closure (pegged by the report for 2026) adds the equivalent of a 572 MW generator coming suddenly online, and then a major build programme from the late 2020s. From 2027 to 2035, more new net electricity generation is expected to be built than has been built since 1990.
Much of this will be in wind, which the Commission expects will be able to generate an extra 10 terawatt hours by 2035.
Some gas-powered generators would continue to operate for a time to provide the system with the security it needs – New Zealand’s current dependence on hydroelectricity puts it at risk of running out of power in a dry year without the flexibility offered by fossil fuels. The sole remaining coal-fired plant, at Huntly, would close much sooner.
As natural gas production and use wanes, the Commission expects methanol company Methanex – which uses 40 percent of New Zealand’s gas supply – would also close.
In industry, the Commission says the technology to decarbonise low and medium temperature process heat already exists. It notes coal boilers in the food processing sector are already being converted to biomass or electric boilers and that this process will continue until coal use for food processing is eliminated. That means converting the equivalent of “one to two very large dairy processing plants away from coal each year or converting a larger number of smaller plants”.
Such an endeavour should see emissions from boilers halve by 2035, from 4 million tonnes of CO2e in 2018 to just 2 million.
Those industrial processes which require extremely high temperatures which cannot currently be reached by electricity or biomass will have their emissions offset by the native tree planting programme described above.
“High temperature process heat is more challenging to decarbonise and our path sees continued use of gas and coal in these sectors. While there is potential to further decarbonise a range of industrial processes through emerging technologies, we do not assume these are available for uptake before 2035.”
Under this framework, all of New Zealand’s heavy industries continue to operate unabated – except for aluminium and methanol production.
Other sectors
The Commission also recommended changes in the waste and building sectors.
In waste, the Commission recommended shifts that were as much cultural as they were policy-based.
“Aotearoa needs to fundamentally change the way it deals with and thinks about waste. A transformation in this sector will not only reduce emissions but move us from a throw away culture to one that values our resources.”
That meant reducing waste in the first order and putting mechanisms in place to capture methane emissions from landfills to destroy or convert to green gas or electricity in the second order.
By 2030, the total amount of organic waste ending up in landfills should have reduced by nearly a quarter.
“Reusing and recovering waste materials is a key part of a circular economy. Our path would see a reduction in the amount of waste generated and a focus on reducing the amount of organic waste, such as food, wood and paper, that go into landfills,” the Commission wrote.
Energy efficiency in buildings should also be improved, the Commission said. Homes built in 2035 should be a third more efficient than they are today. Phasing out of fossil fuels for heating is also important, so the commission recommends coal use in buildings be eliminated by 2030 and no further natural gas connections to the grid or bottled LPG installations after 2025. Instead, buildings would be heated either by burning biomass or electric heat pumps.
Just transitions
This is, as the Commission puts it in the report, a call for “transformational and lasting change across society and the economy”. That transformation has the capacity to leave people behind if not managed carefully.
“We expect employment will rise in the circular economy, development of biofuels and hydrogen, and in deploying and supporting new technologies.”
For example, the plan to decarbonise buildings is reliant on people switching to electricity and an early end to the use of portable gas for heating – even though that method is disproportionately relied on by poorer New Zealanders.
“Portable LPG heaters are a relatively expensive and unhealthy way of heating homes. We recognise that people may not have an alternative or better choice, and to ensure an inclusive transition it is important that everyone can equally access affordable electricity to adequately heat their homes,” the Commission wrote.
“[Portable gas heaters] are used proportionately more in the North Island, particularly in Gisborne and Northland. These heaters tend to be used by lower income households due to the low upfront cost and the ease of budgeting for heating bills. However, they contribute to mouldy homes and cause health problems. Although the number of these heaters is decreasing, replacing them with more efficient low emissions options will take continued government support.”
Indeed, throughout an entire chapter on managing the impacts of the transition on New Zealanders, the Commission calls repeatedly for targeted support for communities most affected by the changes.
Look at the decarbonisation of the vehicle fleet. A household which purchases EVs instead of fossil fuel cars could be $1,000 a year better off due to the lower operating costs – and soon, lower upfront costs.
“However, lower income and rental households may be less able to afford electric vehicle[s] than wealthier households due to the upfront cost of electric vehicles. It may also be challenging for those who cannot charge an electric vehicle at home, for example people living in apartments,” the Commission noted.
“The Government will […] need to provide proactive, targeted support to help lower income households reap the benefits of electric vehicles and bring down costs. Policies that encourage a second-hand electric vehicle market, car sharing and leasing, and support to purchase an electric vehicle or electric bike could help.”
Overall, the Commission’s approach acknowledges that “impacts won’t always be evenly distributed. The Government will need to address this through careful policy design and targeted support.”
That is particularly true for the industries likely to experience significant job losses in the coming years. Across the coal mining and oil and gas sectors, the Commission expects there could be 600 to 1,100 fewer jobs by 2035, on top of the 600 lob losses already projected under current policy settings.
“It is worth noting that many of these workers have important skills that will be valuable in other sectors and new industries. We expect employment will rise in the circular economy, development of biofuels and hydrogen, and in deploying and supporting 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 also expects its lesser reliance on plantation forestry will see fewer job losses in the sheep and beef sector than under current policy settings, as less high country land is afforested.
Planning for transformation
A just transition and economy-wide transformation will require whole-of-government, cross-agency planning in a manner rarely seen before.
In the realm of managing the transition, the Commission has recommended the Government develop an “Equitable Transitions Strategy” and combine this top-down approach with “localised transition planning, where central government works alongside local iwi/Māori, businesses, workers, community groups and local government”.
It cites Taranaki as an example, although while locals in that region have praised their own transition roadmap they say the Government’s approach to transitions has been scattershot and unfocused.
Read more: In Taranaki, just transition fails to materialise
Read more: Reimagining Taranaki’s just transition
An all-of-government approach will also require new ways of working in government to counter climate change. As it stands, climate policy is funded via a number of different appropriations in the budget – much is under Vote Environment, but some is found under Vote Transport, Vote Foreign Affairs, Vote Forestry and so on.
In response, the Commission says “a separate appropriation for climate change is appropriate given the gravity of the issue and the scale of response required from government and the whole of society. Without a specific appropriation for climate change, it will be difficult to assure the Government and society that action across departments and agencies is synchronised in its delivery and to get the most effective and efficient outcome.”
The Commission also wants the Government to take a longer term focus. While not required under the Zero Carbon Act, including policies for meeting the future emissions budgets in the emissions reduction plan meant to meet the current budget is recommended. Plans could even include information on how the 2050 targets might be reached.
To ensure a cohesive response, the Commission also wants the Government to specifically task certain ministers and agencies with responsibility for implementing specific policies in the emissions plan.
New Zealand’s Paris target
In addition to the work on the emissions budgets, the Commission reviewed New Zealand’s Nationally Determined Contribution (NDC) under the Paris Agreement – what we’ve promised the international community we’ll do to reduce emissions. This review was commissioned by Climate Change Minister James Shaw and focused on determining whether the target was consistent with limiting warming to 1.5 degrees above preindustrial levels, ahead of a major climate summit at the end of the year which provides New Zealand with an opportunity to submit a more ambitious target.
New Zealand’s current NDC is far less ambitious than that of other countries. With updated numbers, the Commission says New Zealand has committed to emitting 585 million tonnes over the next decade, but a Ministry for the Environment estimate from 2020 found that would need to be slashed to 516 million tonnes to be consistent with 1.5 degrees.
Even with a less ambitious target than other countries, New Zealand is unlikely to meet its NDC, as the below graphic from Pure Advantage shows.
The Commission also found our Paris target was insufficient, particularly when taking into account New Zealand’s historic disproportionate emissions. While we now make up just 0.2 percent of global emissions, we have contributed half that again to the 1 degree of warming the world has experienced to date.
“To be compatible with a developed country’s contribution, the NDC would need to reflect deeper emissions reductions than what is required of the world as a whole,” the Commission wrote.
Even so, our NDC is unlikely to meet even the threshold of “what is required of the world as a whole,” the Commission found.
The Commission came to this determination by aligning New Zealand’s emissions reduction pathway with pathways modelled by the IPCC that are consistent with limiting warming to 1.5 degrees. Models contain inherent uncertainties, but the most confident range involved emissions reductions over the next decade of between 524 Mt and 604 Mt.
A midpoint of 564 million tonnes was chosen by the Commission as the minimum acceptable NDC consistent with limiting warming to 1.5 degrees in light of New Zealand’s added responsibilities as a developed country.
“Our advice is that it should reflect emissions much less than that equivalent to the middle of the IPCC interquartile range, which would mean allowed emissions of less than 564 Mt CO2e, or reductions of much more than 35% below 2005 levels by 2030,” the Commission found.
The NDC will also have to be partially met from emissions reductions occurring overseas but funded by New Zealand. The emissions budgets devised by the Commission reach the limit of what is ambitious but achievable with current technology, the report found. But New Zealand’s obligated global contribution to reducing emissions as a developed country is greater than what it can meet domestically.
“Contributing this way means that in addition to doing as much as possible domestically, Aotearoa would help other countries to avoid locking in high emissions and to develop more sustainably,” the Commission found.
New Zealand will need to make sure that offshore mitigation it pays for represents reductions that would not have happened without the purchase, the Commission said. Under the Kyoto carbon market, New Zealand bought hundreds of thousands of carbon credits from Russia and Ukraine that did not represent real emissions reductions but allowed us to wipe our balance sheet clean and continue our own high-emitting lifestyle.
“The Government has signalled it will hold itself to high standards of environmental integrity in the offshore mitigation it applies to the NDC. It is of critical importance that the Government follows through on this intent,” the Commission wrote.
Purchasing international mitigation could be expensive. Even with the lowest ambition NDC recommended by the Commission, 564 Mt, New Zealand would likely need to buy 64 Mt of offsets. That could come out to anywhere between $1.9 billion (with a very low carbon price of $30 and no terms of trade multiplier) and $11.5 billion (with a price of $100/tonne and a 1.8 multiplier).
“Offshore mitigation could be paid for by the Government, by emitters or a combination of the two,” the Commission noted.
Ardern said the Government would revise its NDC in light of the Commission’s findings.
“Since [the NDC was submitted in 2015] we have stepped up our ambition as a nation and asked the Commission if our NDCs are in line with our commitment to limit global warming to 1.5 degrees. The Commission confirmed they are not and have recommended they be strengthened,” she said.
“On that basis we will begin work to revise them this year.”
