Rod Oram looks ahead to this country’s emissions D-Day – an important chance to break our long cycle of failure on the climate crisis

May 31 is the most important date for New Zealand this year, or arguably for some years to come. It’s when the Government will release our Emissions Reduction Plan.

‘Our’ is the crucial word. It’s not just a strategy for government or big emitters. We all have to find in it actions we want to take, that we want to support. Only then will we break our long cycle of failure: we promise to tackle the climate crisis/we don’t act/we generate more carbon emissions/we make even bigger pledges and we make our challenges even harder.

If the plan is bold and practical, ground-breaking and empowering it will help us work together to substantially reduce our emissions over the years to 2035, which cover our first three national carbon budgets. But in many ways it will set the foundations and spirit for the way we collaborate to create our climate compatible future over coming decades.

Also, it can’t be a set-and-forget plan. It has to be highly adaptive and iterative so we can tackle fast-changing climate conditions by using fast-evolving technologies, behaviours and economics to create many new opportunities. And the plan must create momentum. The more we do, the greater our confidence to be even bolder and faster.

Conversely, if the plan is a mishmash of old and inadequate actions, or worse highly divisive, it will waste our precious energy, capital and time. When we finally get our act together, we will have made the climate crisis much worse, and the scale of irreparable damage far greater.

There are good grounds for optimism, though. Here are three:

1. Many people and organisations across all segments of society are strongly engaged: The Government received more than 3000 submissions on its ERP consultation document, plus some 7000 form submissions, by the closing date of November 24.

The document gives a feel for the range of options on the table. It also gives a glimpse of the deep sustainability and climate compatibility future on offer thanks to concepts such as the circular economy (re-using all resources) and bioeconomy (using biological sources to meet many of our needs).

Note, though, that agriculture is essentially absent from the document, even though it generates 48 percent of our emissions. That’s because the sector has a separate workstream with the Government, the He Waka Eke Noa project. That’s due to a report on agriculture emissions on April 30; then on June 30, the Climate Change Commission will deliver its own assessment of the sector’s readiness to deal with its emissions.

2. Business is up for the challenge: As the Sustainable Business Council and the Climate Leaders Coalition say in their submission:

“This first Emissions Reduction Plan is our opportunity to truly put our climate ambitions into action and ensure New Zealand gets on track to be a low-emissions country by 2050. The time is now for a bold plan that sets out that pathway, and crucially, mobilises all New Zealanders – government, business, NGOs and civil society alike – to meet the challenge of our times.”

The coalition has more than 100 corporate members. Collectively, they account for almost 60 percent of New Zealand’s gross emissions, around 38 percent of GDP, and employ some 220,000 people.

The Sustainable Business Network, many of whose 600 members are smaller, highly creative companies engaged on climate, circular economy and other opportunities, is equally ambitious in its submission.

“We acknowledge the urgency of the situation and the need for a comprehensive and ambitious emissions reduction plan. This must meet, and even exceed, the current emissions targets and budgets (especially up to 2030). We urge greater ambition so that we can meet the majority of our updated NDC [our UN climate commitment] through domestic emissions reductions, rather than relying on overseas carbon credits.”

3. Government is significantly changing the way it works: Because the climate crisis/opportunity impacts all aspects of our lives, the Government is having to coordinate its very complex and comprehensive responses across many ministries and agencies.

It is also seeking to accelerate policy development and make ministers and their departments more accountable for the climate advice and policies they initiate. A powerful tool in this work is the Public Service Act 2020, which was the biggest reform of government services since the 1988 Act.

The first new structure, the Climate Change Chief Executives Board, predated the 2020 Act. It was formed in 2019 to bring together chief executives of key ministries and agencies to monitor and progress the Climate Action Plan. The Government had initiated the plan in response to the recommendations of the Productivity Commission’s 2018 report on our transition to a low-emission economy.

The board is focusing now on the ERP. It is overseeing development of policies and programmes to reduce emissions, and advice on how to fund such work through the budget process.

A crucial step in the latter was the Government’s announcement of the Climate Emergency Response Fund in mid-December. This is a big change in government budget-making processes in two respects:

– First, its funding is “hypothecated” (i.e. directly pledged) from the proceeds from the Government’s auction of carbon credits in the Emissions Trading Scheme. Normally, all government revenues are pooled then allocated across government programmes.

– Second, the Government needs to invest heavily in emission reduction programmes for some years before the actual emissions start to ramp up. Thus, the Chief Executives Board is playing an important role in helping to prioritise multi-year investments in the government budget for the coming fiscal year, to be released in May, and beyond.

The initial sum for CERF is $4.5 billion over its first four years. But that will be nowhere near enough investment to achieve serious emission reductions over the longer term, let alone for the investment needed in climate adaptation too. Thus, the new investment prioritisation processes will have to expand more widely across the government budget and funding streams within it. There is also a very good case for adapting these new processes for investments in other areas, most importantly programmes for social development.

The other main new structure is the Climate Change Response Ministerial Group, which is chaired by the Prime Minister. Formed in December 2020, it sets strategic direction on climate action and monitors the work programme for effectiveness and timeliness. For example, this group worked on our improved NDC before it was signed off by all of Cabinet then delivered to the United Nations just before its COP26 climate negotiations started in Glasgow at the end of October.

Previously, such efforts to coordinate complex cross-department policy and budget work was co-ordinated by Cabinet committees. But this new way of working starts the collaborative process far earlier and is generating greater buy-in and faster progress.

“From a policy point of view, it’s really forcing us to have the difficult conversations,” says one of the participants. That’s particularly true on the currently seriously inadequate policies on agricultural and energy emissions.

“We’re having challenging conversations about collectively meeting those carbon budgets. Compared with this time last year, we’ve progressed in leaps and bounds in terms of each person taking a really strong lead role in developing the ERP.”

The ERP consultation document says that once the plan is announced by the Government at the end of May, “agencies and ministers must be accountable for what it sets out. The Government is considering whether this might require enhanced or additional mechanisms.”

A hot topic internally is how much formal accountability ministers and public servants will face for achieving, for example, the emission reductions they promise in the plan. The 2020 Act allows for a high degree of accountability, even though the effectiveness of policies will depend to a large extent on the performance of emitters themselves.

The resource management reforms underway already offer the first example of such statutory obligations. The reform process is run by a group of relevant public sector chief executives, and a group of relevant ministers. The expectations on them are specified in an Order in Council, a form of secondary legislation.

Another notable feature of climate policy development is the cohort of talented, committed and typically younger people recruited for the work. They rarely have any public profile. But some made valuable contributions to the public webinars held as part of the ERP consultation process late last year. You can replay the webinars via this link to get a sense of their contribution.

For all the positive signs coming from society, business and government about this utterly crucial phase of our climate response, three big caveats are in order:

– There are still many more solutions to devise and arguments to win; and plenty of vested interests are pushing back hard on both.

– We will fail to meet our national climate targets if the primary sector fails to match other sectors’ commitments to deep carbon cuts and economic transformation.

– The challenges are daunting. We have pledged to the UN we will reduce our emissions by 41 percent by 2030. The Government has conceded we’ll meet a sizeable proportion of those by buying carbon credits in economies overseas rather than by emission reductions in our economy.

Thus, the weaker our policy response, the bigger our multi-billion dollar payments to other countries to mitigate emissions on our behalf, the greater the damage to our international reputation, and the longer we will be burdened by a high emission, old tech, low value economy.

Conversely, if our Emissions Reduction Plan unlocks our full potential, it will help us generate far greater economic, ecological, social and cultural benefits. We’ll know the answer on May 31.

Rod Oram is a weekly columnist who covers climate, economics and politics.

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