A new UK-style commission will look at whether the agriculture sector should be folded into New Zealand's emissions trading scheme, Climate Change Minister James Shaw says.

The latest greenhouse gas emissions inventory showed xpansion in the dairy industry is one of the big reasons emissions have climbed about 20 per cent in just two and a half decades, a new report shows.

The latest greenhouse gas emissions inventory, which gives a picture of how much human-generated greenhouse gas is being emitted into and removed from our atmosphere, shows emissions as at 2016 have increased from 1990 levels by 19.6 per cent.

Methane belched from dairy cattle and carbon dioxide from road transport contributed the most of the increase.


In 2016, the agriculture and energy sectors were the two largest contributors to New Zealand's gross emissions, at 49.2 per cent and 39.8 per cent respectively.

Expansion in the dairy industry has largely led to the fertiliser and methane increases in the agricultural sector and more petrol and diesel vehicles on our roads are generating more emissions in the transport sector.

Gross emissions in 2016 were 78.7 million tonnes of carbon dioxide – but that was 2.4 per cent lower than in 2015, mainly because of a decrease in the use of thermal fuels such as coal and gas and a decline in the number of sheep.

Net emissions, meanwhile, had increased by 54.2 per cent since 1990 because more trees were being cut down and gross emissions had increased.

In 2016, approximately 5099ha of new forest was planted and 4945ha deforested.

A new UK-style commission will now look at whether the agriculture sector should be folded into New Zealand's emissions trading scheme, Shaw said.

"Urgent action is needed, at a level not previously contemplated.

"We all need to be focused on the transition to a net zero emissions economy."


The Government was introducing the Zero Carbon Bill, setting the country on a 2050 emissions reduction target, and an independent Climate Change Commission.

The commission would recommend interim emissions reduction targets and provide advice, and look at how the country could transition to 100 per cent renewable electricity by 2035.

"One of the things the commission will look at is whether and how agriculture comes into the NZ Emissions Trading Scheme," Shaw said.

"We'll continue to invest in research and technology that can reduce agricultural emissions while increasing productivity and profitability for farmers."

The Government was also establishing a Green Investment Fund that would direct investment towards low-emissions industries.

"We'll move to electric vehicles – the Government's own car fleet will be electric by 2025."

The inventory showed the long-term emission rise is also partly due to the increasing number of trees being cut down, Shaw said.

"The Government's committed to planting one billion trees over the next 10 years.

"If we want to help lead the world towards meeting the goals of the Paris Agreement, we must create a moral mandate underpinned by decisive action at home to reduce our own emissions."

New Zealand has pledged to slash emissions by 30 per cent below 2005 levels, and 11 per cent below 1990 levels, by 2030.

The inventory was released on the same day Prime Minister Jacinda Ardern announced an end to offshore oil exploration permits.