e
access to international units provides a useful option for abatement, but we
do not support unrealistic targets that rely on the purchase of offshore units;
and
f
commitments should result in actions and investments that are least cost,
efficient, and technology and fuels agnostic.
Submission
Our first NDC was never intended to be achievable via domestic action only
5.
Climate change is a global challenge, and we encourage New Zealand’s part in
reducing emissions. We are committed to domestic actions already agreed to but
a target that is too stringent risks putting New Zealand on a pathway that is
not efficient or in the best interests of New Zealand.
6.
Unnecessary costs on businesses increase the risk of emissions leakage. If
New Zealand industries are forced to reduce their operations, shut down or move
offshore, it results in loss of livelihoods and productivity. What we will often see,
too, is an increase in carbon emissions offshore, usually from more polluting
sources and less well-regulated jurisdictions.
7.
We are increasingly concerned about the current narrative on NDC1 and the 2030
target. In particular, we are concerned about the emphasis that it must be met
through gross reductions, and how not doing so will have reputational and/or
trade implications.
8.
New Zealand set an ambitious target for NDC1 far above what we knowingly could
meet via domestic action alone. A former climate change ambassador, Adrian
Macey, said [quoted from the Spinoff]:
“setting a target that couldn’t be met domestically was a mistake in the first place”
and
“we made a colossal cock-up in the target we pledged”.1
9.
In this context, it would seem unwise to strengthen the NDC2 target when we
already know we cannot meet NDC1. It is important that there is a strong
understanding of what is achievable domestically before setting NDC2. We agree
that international mitigation via offshore credits is an important part of the tool
box to help us achieve our domestic ambition, but we do not agree that a target
should be set far higher than what is possible domestically and relies on
international credits.
1
See https://thespinoff.co.nz/politics/02-10-2024/paris-is-burning-will-new-zealand-abandon-its-climate-change-
targets
2
The approach to net reductions New Zealand needs
10. We believe that New Zealand should focus on long-term benefits and mitigation
opportunities unique to New Zealand. We should not compromise our best
interests due to international pressure, especially given our unique emissions
profile.
11. Our ambition should be guided by the sum of the actions outlined in the emission
reduction budgets.
12. We believe that technological advancements are the most efficient and productive
pathway to achieve net zero by 2050. For example, carbon capture and storage
and bioenergy to name but two. We believe these should be progressed at least
cost, with a credible NZETS driving investment decisions, and with low adoption of
costly, ineffective ‘complementary measures’.
13. We agree there is more to be done and there is much potential in generating
energy and emissions reductions
at the same time as using carbon sequestration
technologies and finding efficiencies in process and production.
14. The energy sector is already doing some heavy lifting. The evidence presented in
our latest annual update of the Energy Resources Sector Net Zero Accord reveals
these reductions, by volume and per unit.
15. Forestry is going to provide heavy lifting also and we are disappointed in the
recent decision to limit NZETS registrations for forestry. The impact of restricting
forestry from the NZETS could be a reduction in the supply of NZUs, meaning the
carbon price will rise faster than otherwise. This could incentivise faster gross
emissions reductions by New Zealand industries, but it
also means a more
expensive transition to net zero than is otherwise necessary. Considering the pace
of technological advancement is set by overseas developments, such gross
emission reductions could also come from reduced industrial output (colloquially
labelled ‘deindustrialisation’), a patently bad outcome for New Zealand.
We need a systemic cross-sectoral approach
16. The Paris Agreement was intended to be supportive and encouraging of each
nation’s ambition through mutual collaboration and co-operation.
17. Collaboration is also needed nationally. The NDC is a national net target and will
require national efforts to achieve. We are concerned that barriers continue to
plague efforts to reduce emissions because of inabilities to work across sectors,
levels of government, iwi, electorates and elections.
3
18. What is needed is a practical and consistent approach that brings all these
important players together, with market settings that are transparent, predictable
and enabling.
Using the Sustainable Development Goals as context for our NDC
19. Given our commitment to expand upon NDC1, we think it practical to consider
NDC2 in the context of the Sustainable Development Goals (‘SDGs’). We see
New Zealand’s climate action being undertaken in conjunction with energy
security and resilience, not in conflict of.
20. This is consistent with the approach taken with the United Nations SDGs where
climate action (SDG 13) and energy security (SDG 7) are both implemented
together. These provide important context for climate action, while recognising a
country’s right to prosperity and sustainable development. This would result in a
more ambitious NDC2 (in the adaptation space), as envisaged by Article 2 of the
Paris Agreement.
21. Such an approach allows New Zealand to refocus on a more systemic and
coherent policy approach across all our actions.2 This is consistent with other
countries experiencing difficulties in meeting their original targets.
New Zealand’s international reputation
22. Much has been made of New Zealand’s reputational risk if we do not meet the
NDC1 target or are not seen as ambitious in setting a higher bar with our NDC2.
Setting domestic targets that are too high in the first place is the real risk. It places
New Zealand in the position of either missing them and facing potentially limited
access to markets or achieving them by de-industrialisation and paying
unnecessarily for offshore credits and complementary measures.
23. We do not agree with arguments based on reputation when other countries in
similar circumstances are either not subject to reputational risks or pay no price
for making the tough choices we are contemplating to avoid blackouts. Rather, we
think they will reach out to help us through partnerships and sharing of best
practices.
24. The collaborative spirit was evident in the recent UK delegation visit to Taranaki
for offshore wind partnership possibilities and the EU delegation in New Zealand’s
collaborative work, including on agriculture, and research, science and technology
in the context of climate action.
2
We note that the UNFCCC website describes NDCs as embodying “efforts by each country to reduce national
emissions and adapt to the impacts of climate change.” See https://unfccc.int/process-and-meetings/the-paris-
agreement/nationally-determined-contributions-ndcs.
4
25. The adoption of Article 6 had been stalled for a number of years due to an inability
to resolve several key issues. With New Zealand already boasting one of the best
emissions trading schemes, we welcome the adoption of Article 6 of the Paris
Agreement at COP29. It is an important step in the formulation of international
carbon markets and enabling of the first steps in ensuring economies will be able
to compete on an equal footing when it comes to the cross-border management
and achievement of emissions reductions.
26. However, we note that participation in Article 6 is voluntary. While important,
New Zealand is not restricted or confined by it and is free to participate in
international arrangements that are not bound by it. Consistent with the
establishment of targets that are nationally determined, we should enter into
whatever arrangements benefit New Zealand and its unique circumstances, so
long as they can withstand reasonable scrutiny by our international peers in the
context of the UNFCCC.
Building on our strengths
27. New Zealand has unique national circumstances:
a
renewables already make up a vast proportion of our total electricity
generation, making the economics of reducing our marginal emissions
harder not easier; and
b
biomethane emissions from agriculture make up around half of our net sum
of emissions, a much higher proportion than other countries. There are no
clearly winning technologies on the horizon that can reduce methane to any
significant degree.
28. This means we do not have as much potential as other countries to make large
CO2 reductions and we have a tougher job than most to reduce biomethane.
Indeed, as noted in the Ministry’s ‘opportunity for feedback’ document,
New Zealand stands alone as the only developed country where CO2 emissions
make up less than half of the proportion of greenhouse gases on a CO2-e basis.
Ireland is the next smallest at 60.5%.
29. These circumstances give New Zealand the rationale and scope to choose a
meaningful but achievable NDC2, building on sound and proven technological and
economic advancements in energy and its adjacent sectors.
30. New Zealand is innovative and technologically savvy. There are many
opportunities to ‘take action’ that are mentioned in the Climate Change
Commissions’ advice that can create prosperity and that we fully support.
5
31. There are two opportunities that we think require some additional commentary to
reveal their potential in setting emissions reduction budgets, plans, and our
second NDC:
a
decarbonising industrial heat and production processes – we note this
should not be limited to electrifying but should include cross-sectoral
processes that create energy or other high-value byproducts; and
b
diverting organic waste and capturing landfill gas – we understand there
are by-products that have economic value but also can significantly reduce
our carbon dioxide emissions. For example, when producing biogas from
landfill, the gas can be used directly in the reticulation system; and when
producing biochar from forestry slash, the surplus energy can be used as
process heat for industry, and the carbon sequestration when compared
with leaving the slash to decompose is 4.8T CO2 net reduction. 3
3
For every 1T of residue, the production of biochar could produce 0.2T of certified biochar and 3.2 NZUs,
compared with 1.6-1.8T CO2 emitted if left to rot.
6
