To meet New Zealand's ambitious net-zero climate target we have a challenge ahead of us – we need to cut 50 million tonnes of carbon dioxide emissions by 2050. That's equivalent to 650,000 fewer full return flights between Auckland and Sydney running each year.
The good news is that we can do this - if we act now. New Zealand is in an enviable position compared to other countries. Our electricity is already around 85 per cent renewable and we have the tools and tech needed to decarbonise and build a cleaner, more sustainable future for all New Zealanders.
We need to push forward quickly, but with care. The scale of change needed makes it vital we make the right changes – driving the biggest emissions reductions at the lowest cost. If we make the wrong choices now we'll be loading extra unnecessary cost on Kiwi families now, or giving future generations an even harder task because we haven't succeeded.
The Climate Change Commission has set out one path for getting to net zero. A vital part of the plan is converting emissions-intensive activities such as petrol cars and industrial milk processing to renewable electricity.
The electricity sector has a key role to play in New Zealand's climate change transition. Our electricity is the sixth cheapest in the developed world, which makes it easier to switch from carbon-intensive activities to renewable power – so it isn't just what's best for the planet but what's best for you and your back pocket.
Electric vehicles are a good example. Compared to a petrol car, the cost of charging an EV is equivalent to $0.40 cents per litre, so switching to a electric vehicle won't just save carbon, it will also save money - especially as the upfront cost of an EV is expected to fall significantly over the next 10 years.
Switching cars and trucks to electric vehicles and electrifying industrial heat processes (like milk pasteurisation) would drive massive emission reductions – around a third of those 650,000 return flights - at a low cost relative to other options.
Power companies are already helping Kiwis to reduce their emissions by supporting switches to electricity through initiatives such as electric vehicles tariffs and power sharing for homes and businesses with solar panels, as well as supporting new clean energy generation - and we're only going to see that increase over the next decade.
The move away from carbon and to renewable energy means our demand for electricity will significantly increase over the next 30 years, requiring major investment in more clean energy to meet this demand.
That won't be cheap, so we need to relentlessly pursue options that give us the biggest emissions reductions for the lowest cost.
The Climate Change Commission's report highlights the potential extra costs of a strict 2030 100 per cent renewable electricity target for the emission reductions gained. Even with demand increasing, the proportion of renewable electricity is expected to increase significantly over the next 15 years. Pushing for that last few per cent could mean a massive extra cost for a small amount of emission reductions gained.
These extra costs would need to be met somewhere – either by higher power bills or higher taxes. Or they'll mean we're not supporting other cheaper and more efficient ways to reduce our emissions – like converting our petrol car fleet to renewable electricity.
No one is arguing against the aim of 100 per cent renewable power – but the cost to consumers of trying to achieve this in too short a timeframe is significant.
We need to be looking to the experts and all working together for the biggest gains – we've already proven we can do this in our response to Covid-19, and we need to take that evidence-based approach for our climate change transition. We can do this.
• Cameron Burrows is the Chief Executive of the Electricity Retailers' Association of New Zealand.