Transport will be one of the first sectors to feel the biggest changes in New Zealand's transition to a low-carbon economy. Photo / Jason Oxenham
New Zealand is on the cusp of a decade-long transformation - and a long-awaited blueprint landing this week could spell the start of it. Science reporter Jamie Morton talked to Climate Change Minister James Shaw.
After it drops at midday on Wednesday, it's fair to say the Climate Change Commission's final advice won't just prove another dry, weighty report destined to gather dust.
As far as Climate Change Minister James Shaw is concerned, it'll mark a turning point – a catalyst for a national transformation – and something that policy has been building toward for years.
That even included the legislative vehicle built to drive the transformation – the Zero Carbon Act – and the formation of the independent commission itself.
The commission's draft advice, released in January, answered the first question put to it.
Was New Zealand doing enough toward the world's aspirational target of limiting global warming to 1.5C, above pre-industrial levels?
Unsurprisingly, the answer was a definite no.
Sticking with current policy, the commission found, would see New Zealand miss our set 2050 target of net-zero long-lived gases by some 6.3 million tonnes of carbon dioxide equivalent.
We couldn't keep relying on our traditional way of offsetting emissions – forestry and carbon credits.
And we'd have to climb some very steep hills, in a relatively short timeframe, to get to where we should be.
The good news was that we could do it without having to wait around for game-changing technology, and the commission set out precisely how.
Petrol car imports would need to be wound down by 2032 and nearly all vehicles entering the country's fleet would need to be electric by 2035.
An industry co-led pricing system, sparing agriculture from joining the Emissions Trading Scheme, would have to truly work – and even then, livestock numbers would have to fall by 15 per cent this decade.
We'd need to plant many more trees – an extra 380,000ha of exotic forestry by 2035, along with an annual 25,000ha of native forest by 2030, until at least 2050.
By 2035, 60 per cent of New Zealand's energy would need to come from renewable sources.
And by mid-century, low and medium temperature heat in industry and buildings would come from electricity and biomass.
In all, greenhouse gas emissions would have to drop from 2018 levels by 36 per cent, by 2035 – around the same proportion that gross carbon dioxide would need to fall by.
The draft advice proposed the first three "emissions budgets".
To begin with was a 2 per cent average reduction (from 2018 levels) each year between 2022 and 2025, followed by an annual 17 per cent drop between 2025 and 2030; and finally cuts of 36 per cent each year between 2030 and 2035.
While it's unclear how different Wednesday's final report will appear from its draft report – the commission had to consider around 15,500 submissions – we can expect the scale of required change to look as bold as these deep cuts.
Yet Shaw said the Government wasn't starting from scratch in envisaging a decarbonised Aotearoa.
Many of the agencies involved in developing New Zealand's first-ever Emissions Reductions Plan had already been responding to the path put forward by the Productivity Commission's major 2018 report.
"A lot of groundwork has been laid to a greater or lesser extent and depending on what agency you're talking about, a lot of the background thinking is already there," he told the Herald.
"What the [Climate Change Commission's] advice did was trigger a significant increase in the tempo at which agencies are processing that and turning it into policy options."
One example of that was the Ministry of Transport's recent report, which also floated the idea of a petrol and diesel car ban by 2050, with imports ending by 2035.
"Next week, we'll see exactly the same order of magnitude increase in the tempo, because the advice will be final, and there's nothing further to come, or wait for," Shaw said.
"We've only got until the end of the year to convert this all into an emissions reduction plan. As you do when you get closer to deadline, things are really gathering steam."
Whereas the Zero Carbon Act – arguably the Government's biggest climate achievement last term – mainly involved the Ministry for the Environment and a handful of ministers, the work surrounding the reductions plan sprawled across some 30 different agencies.
"Covid aside, to my knowledge, this is the largest effort the government has been involved with, with such a broad range of ministers and agencies, to come up with a single, coherent programme of work."
To the average Kiwi, Shaw said the transition to a greener future would be noticeable.
"In the immediate sense, life will continue as normal – but I think over coming years, as you're walking around your neighbourhood, you'll see probably a pretty dramatic increase in the amount of rooftop solar panels.
"You'll see a pretty dramatic increase in the uptake of electric vehicles on the roads and you'll also see changes to the way that roads are laid out, so that they're much more friendly for cyclists and pedestrians.
"I'd anticipate you'll be seeing, at the very least, more buses, in our cities as well.
"If you're travelling between cities, you'll see more wind turbines around the landscape. If you're driving through farmland, you'll see a lot more riparian planting, or farms that have got unproductive land planted up with natives."
How would the transformation be funded?
Shaw didn't deny that the journey would come with some big costs – nor that these costs wouldn't be spread evenly across the economy.
"[Finance Minister Grant Robertson] talked about this in his Budget speech a couple of weeks ago, where he said, the way that we do public finance has some useful disciplines, but it is not well designed to cope with a multi-generational, complex distributed challenge like climate change."
The decision to recycle revenue drawn from the Emissions Trading Scheme directly back into emissions-reducing programmes, he said, was one of the first steps toward a "more systematic approach" of financing the transition.
Over the next five years alone, that ring-fenced revenue was forecast to deliver more than $3b of climate-focused investment.
While this year's Budget drew criticism for a perceived underspend on climate change, Shaw said the reduction plan would determine a programme of government spending from 2022 onward.
"But it's kind of hard to determine until you've written the plan, which we haven't yet," Shaw said.
"Whilst you can say that, obviously, there's a lot of stuff that's going to have to get financed, not all of it needs to be financed by central government.
"And in fact, if you read the commissioners draft advice, a lot of what they talk about is essentially how we do asset replacement as a country.
"They've taken this precautionary approach in the assumptions that they've made about how that transition happens by saying, stop building any new infrastructure that locks in a high emissions pathway."
That included a recommendation, for instance, to ban new residential and commercial gas and LPG connections, from 2025 onward.
"Then, as the current generation of high-carbon infrastructure comes to the end of its life, replace it with low carbon infrastructure.
"Much of that means that, if you take that approach, the government doesn't need to get particularly involved in financing at all."
The need to galvanise private finance and capital and steer it toward the transition was precisely the reason the Government launched green investment fund in 2018 – chipping in $100m itself as a starter – and injected another $300m toward low-carbon tech in the latest Budget.
And earlier this year, New Zealand became the first country in the world to introduce a law requiring the financial sector to disclose the impacts of climate change on their business, and explain how they'd manage climate-related risks and opportunities.
"At the same time, obviously, there'll be a number of things that are significant calls on the public purse.
"Obviously, a massive investment in public transport, buses and cycleways and urban design will provide people with the option of not driving a car.
"And transport expenditure has always been a pretty large part of what central government does and pays for."
Transport also happened to be one of the five sectors the reduction plan focused on, which wasn't surprising, given the sector accounted for nearly half the country's CO2 emissions, and was also the fastest-growing source of them.
"Transport and industrial heat are the two most pressing areas where you both can – and need to – see a change in the shortest amount of time."
The Budget also happened to ear-mark $302m for a "Clean Car Discount", which some took to spell the revival of a mooted "feebate" that made petrol cars more expensive to buy and import, while incentivising low-emissions vehicles.
But it was still unclear what this policy would come to look like, and an announcement was due soon.
Yet, even though the Government just poured another $13m into decarbonising the Government's own fleet, New Zealand was a long way from meeting the commission's suggested EV targets.
On industrial heating, the Government has already announced a ban on new low to medium temperature coal burners from next year, as part of a wider phase-out equivalent to taking hundreds of thousands of cars off the road.
As for agriculture, the Budget put about $61m toward reducing farm emissions – disappointing environmental groups that'd hoped for a billion-dollar spend to drive a shift to regenerative farming.
How to bring down levels of biogenic methane largely stemming from livestock - and responsible for a third of our greenhouse gas emissions – remained one the most debated areas of New Zealand climate policy.
But the commission found the current target range set under the Zero Carbon Act - a reduction of 24 to 47 per cent by 2050 - couldn't be achieved under status quo measures that would actually only see levels drop by just 12 per cent below 2017 levels.
Along with a drop in livestock numbers, the commission's draft advice found other measures would help, like adjusting stocking rates and supplementary feed and nitrogen inputs for emissions efficiency, breeding low emissions sheep into the national flock, and using low nitrogen feeds.
The commission noted the Government-industry He Waka Eke Noa Partnership to build a farm level pricing system was also "developing the information and support needed to manage farms in a low emissions way, including training, extension, and farm and forestry advisory services," it said.
"It will be important that these tools can deliver emissions reductions consistent with emission budgets and targets, and that they endure beyond 2025."
Last week, the commission's chair, Dr Rod Carr, said his fellow commissioners were now even more convinced there were achievable, affordable and acceptable ways to meet the country's emissions targets.
"It is now up to the Government to consider our advice."
If the Government, self-bound to set the first three five-year budgets by January 31, opted not to accept the commission's advice, it would be forced to publish an alternative plan.
While the adoption of the commission's recommendations remained the basis of the Emissions Reduction Plan - and survey data has suggested public support for them - there was a long process that had to be worked through.
"I can't say off the top of my head which [recommendations] we will accept or modify now, because that's all got to go through different agencies, different ministers, and then eventually a Cabinet process," Shaw said.
"Some of those decisions will be made in a few months' time, and some of them will be made a little bit later in the year.
"But by Christmas, we will have a comprehensive emissions reduction plan right across the economy, that we have to prove puts us on a pathway to live within the emissions budgets.
"Obviously, the commission has made some recommendations around what those budgets will be.
"Cabinet has to either accept those recommendations… or to come up with something better, somehow."
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