Iwi, business lay down the wero for climate minister

Climate Change Minister Simon Watts has been challenged by tangata whenua, with the gifting of a pounamu named kaitiaki.

Meanwhile, businesses called on the Government to enact international carbon credit trading and Government mandates on sustainable aviation fuel – both things Watts said were in the works, but would take time.

Watts was part of the delegation travelling with Prime Minister Christopher Luxon to Singapore, Thailand and the Philippines, last week.

On the last day of the trip, a member of Mfat’s Te Hurumanu strategic group and Ngāti Ranginui chair Charlie Rahiri (Ngāti Ranginui, Ngāi Te Rangi, Ngāti Pāoa, Ngāti Kahu, Ngāti Pango, Ngāi Tamarawaho, Ngāti Hangarau) presented Watts with the pounamu.

The message that came with the taonga was pointed.

Rahiri explained to Watts that in Te Ao Māori, taniwhā were kaitiaki – or guardians. The story of this pounamu was linked to a taniwhā that lived in both the rivers and the oceans. They protected the water, and the implication was that tangata whenua expected Watts to do the same.

When there was misalignment in the natural world, there was misalignment in life. When the natural world thrived, people thrived, Rahiri said. 

The challenge was made among the full delegation, in the departure lounge of the Philippines military air base, on the last day of the five-day tour of Southeast Asia.

Watts said he was humbled to receive the taonga, but knew it came with responsibility.

“It’s a weight around one’s neck, isn’t it,” he said.

“Some say the climate change portfolio is probably one of the most complex and challenging portfolios. I see it as a real opportunity for us.”

Watts said it was incumbent on him to deliver outcomes. 

“What I can do in my role is lead and provide a direction and work together with my broader team – and those across political parties too – to get us moving on that journey,” he said.

“Having this around my neck will also remind me, I’m sure – at those points where we have challenging conversations; the difficult points – the reason why I’m doing this. 

“And the reason why is we’re doing this for people in New Zealand – for all New Zealanders – I take that both humbly but also seriously.”

Govt needs to step in

The green economy was a key theme of the trip. And though New Zealand was seen as a leader on renewables, both New Zealand and Southeast Asian businesses urged the Government to move further and faster on climate policy.

While in Manila, the head of the renewable energy branch of the country’s largest conglomerate said New Zealand should be moving into the international carbon credit market.

“While we have all excuses in the global south to say it’s folks from the north – it’s you’re problem – it’s not right and that doesn’t help the problem.”

ACEN had started a project with the Monetary Authority of Singapore, which would see the city state buy carbon credits from the Philippines. The money would be used by ACEN to accelerate the closure of a coal plant by 10 years.

This would lead to a reduction of just 1.9 million tonnes of emissions, but it provided a framework for an ethical form of carbon credit trading, which in-turn provided green jobs and prioritised just transition.

Francia said the model was replicable and scalable, and that gave him optimism.

This type of project had been made possible through COP28 Article 6, which allowed for international carbon trading and collaboration across borders to help countries achieve their Nationally Determined Contribution (NDC).

And as Singapore, Switzerland, Papua New Guinea, and the EU moved into this space, there was opportunity for New Zealand – a country with a history of using carbon markets, such as the ETS.

Francia said trading would help countries with hard-to-abate emissions.

In the case of New Zealand, half of emissions – about 80 million tonnes – came from agriculture. And though there was a place for technology in reducing these emissions, if New Zealand were to hit its NDC by 2030, it would need to find some other solutions.

In theory, profits from the agricultural sector could be used to buy credits from another country, which would offset New Zealand’s emissions by using that money for a decarbonisation project (shutting a coal mine, building a wind farm, planting trees, etc). The projects could be public-private partnerships, and could be seen as a form of foreign direct investment.

“New Zealand is one of those pioneering countries that could enable these internationally created, or traded, credits,” Francia said.

Watts said he had been working on policy regarding carbon credit trading but in effect he was starting from scratch.

“We didn’t inherit a plan or any models in place in terms of being able to undertake international cooperation in regards to article 6,” he said.

Watts said talking with Singapore and the Philippines had been helpful. He had now directed his officials to consider an appropriate framework for New Zealand.

However, reducing domestic emissions – even in agriculture – remained the Government’s primary focus, Watts said.

“To date, the narrative has very much been ‘things are coming’. But I think we need to be able to clearly identify what’s happening in the near-term: in the next three years, the next six years, the next nine years.”

Meanwhile, following an announcement in Singapore that Air NZ would be making its biggest ever purchase of sustainable aviation fuel, chair Dame Therese Walsh told Newsroom she would welcome mandates from the Government.

“Sustainable aviation fuel is currently the only solution to significantly reduce emissions from long haul flight, but it currently makes up less than 1 percent of the global fuel supply,” Walsh said.

In February, Singapore said it would require all flights departing the country to use SAF, starting in 2026. And from 2025, planes taking off from any EU country would have to use a minimum of 2 percent SAF. That percentage would increase each year, with mandates moving to 6 percent by 2030, 20 percent by 2035, and eventually 70 percent by 2050.

Watts said it was good that industry was leading the transition to SAF, but said he did plan to introduce some sort of SAF regulation – likely mandates. He would be talking to Transport Minister Simeon Brown as soon as he was back.

Rounding out the public-facing part of the climate agenda for the trip, the Government announced $41 million for the Asia Development Bank (ADB), to allocate to projects helping Indonesia, the Philippines and Vietnam to move away from fossil fuels.

Though the allocation from the $1.3 billion Climate Relief Fund was worthy, the project was planned and the money appropriated under the previous Government. This Government’s re-announcement was an opportunity to reaffirm the importance it placed on renewables, while at the ADB headquarters in Manila.

‘What’s good for environment is good for business’

Watts said a significant portion of the bilateral dialogue with the leaders of the three countries was focussed on climate. In some conversations, it led the conversation.

This reinforced the importance of his work, and the pace at which New Zealand needed to move, he said.

The business delegation that travelled with the Prime Minister and Watts included sustainable concrete maker Neocrete, green hydrogen supplier Hiringa Energy, and carbon offsetting service CarbonClick. Others were not innately green businesses, but were preoccupied with reducing emissions, such as Air NZ and Fonterra.

Some from the climate-focused sub-set of the delegation told Newsroom they were surprised that emissions reductions and the green economy were the top focus in every country they visited.

“Climate change is a global, environmental challenge. But it’s also an economic challenge, Watts said, adding that meant there was economic opportunity.

“What’s good for the environment is good for business,” one of the delegation said in an informal panel session.

Disconnect between message to the world and domestic policy

There was also suggestion from some in the business and trade delegation that the Southeast Asian countries believed New Zealand was better on climate than it was.

Some were confused by the Government’s domestic direction – one referenced deprioritising climate in the draft Government Policy Statement – when the rest of the world was talking about going harder and faster.

When Newsroom asked whether leaders had mentioned things such as the coalition commitment to overturn the ban on offshore natural gas exploration, and the possibility of using the new fast-track mechanism to remove regulation around setting up things like coal mines, Watts said no country voiced concerns about New Zealand’s domestic climate policies.

“When countries look at New Zealand we have an abundance of green, renewable energy … they look to us as leaders when it comes to renewables,” he said.

Watts did not believe there was a disconnect between the progressive, green message his Government was selling in Southeast Asia, and the policies at home.

Though there was bipartisan support for the direction of travel and the climate targets put in place, how they planned to get there would be different to the last Government’s plan.

“We need to continue to do more in terms of bringing people on the journey of how we’re going to reduce emission in New Zealand, through to 2030-2040 and beyond,” he said.

The Government was currently working on its Emissions Reduction Plan Two, which would lay out a roadmap for the next five years.

“That will definitely provide comfort and transparency around what are we going to do, and how, and what impact that will make,” Watts said.

“All of these decisions are trade-offs. But at the end of the day, we’re focused on outcomes.”

And for Watts, the ultimate outcome – and the official target set by his boss – was making sure the country hit its emissions targets.