Climate Change Minister James Shaw at yesterday's NDC briefing

National Leader Christopher Luxon has ended speculation and committed National to the bipartisan climate change policy that was negotiated in 2019 by then-leader Simon Bridges and Todd Muller.

The policy appeared to be under challenge during Judith Collins’ term as leader and her sacking of Scott Simpson as climate change spokesperson and replacement by the more sceptical Stuart Smith.

But Simpson is now back in the job, and Luxon yesterday was at pains to emphasise National’s support for the policy.

That support has materialised as also support for the range of emissions reductions announced yesterday by Climate Change Minister James Shaw.

They are ambitious, but Shaw confirmed yesterday they had been agreed after consultation with “the other parties.”

They will be debated in Parliament in a special debate this Thursday.

However Simpson yesterday issued a warning that National’s support was not unconditional.

“As with policies in every other area, emissions policies should be robustly analysed, include transparent measures for what they will achieve and be backed by credible, practical delivery plans,” he said  in a statement in response to questions from POLITIK.

“We’ll be reviewing the Government’s proposed actions once they are released next week, but we think it’s entirely possible that despite its good intentions, the Government that dreamed up KiwiBuild may propose emission-reduction policies that don’t meet these basic tests. 

“Not all emission reduction policies or actions achieve outcomes at the same cost or impact on people’s lives.” 

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Shaw said these matters can be traversed in Thursday’s debate.

“This will allow each party to put its views on record and, at the same time, preserve each party’s ability to disagree on the policy prescription by which we collectively meet those emissions budgets,” he said.

“After all, the first three emissions budgets take us through to 2035, which would span the life of several governments.”

The figures propose average annual net emissions of 72.4 megatonnes of Greenhouse Gases to 2025. The figures are averages and what will matter is what the cumulative reduction will be in each five year period.

A Government source told POLITIK that it would generally be expected that emissions would be higher than the average early in the emissions budget period and lower than the average by the end of an emissions budget period.

Annual emissions would show a variation around the trend line.

Setting the budgets over four or five year periods provided flexibility in meeting them, the source said..

Thereafter they propose annual net reductions of 61 megatonnes from 2026 – 30 and 48 megatonnes from 2031 – 35.

The Ministry for the Environment’s last recorded emissions are for 2020, when the net figure was 78.8 megatonnes. That means New Zealand will be required to reduce its net emissions by nearly nine per cent each year to 2025.

Agriculture is already committed to a 10 per cent reduction in methane by 2030, but at this stage, there is no specific plan for industry or transport — the big carbon dioxide emitters.

Central to a reduction in net emissions will be purchases of offshore carbon credits and increases in exotic forestry which Shaw yesterday appeared to cite as a reason for the greater reductions targets post 2025.

He said  Cabinet had proposed a slight variance to the Climate Change Commission’s recommended emissions budgets based on updated forestry intentions numbers.

“There is considerable uncertainty around forestry projections, and so, having reviewed the evidence, Cabinet chose to revert to the Commission’s recommended first emissions budget,” he said.

“However, Cabinet has retained the modified second and third emissions budgets we consulted on late last year.

“That’s why I say the second and third emissions budgets have been set, in principle.”

He said Cabinet would review these targets closer to the time, taking into account more recent and firmer forestry projections but also the uptake of new technology and scientific advances.

So the debate is now likely to centre on how much of New Zealand’s future reductions should be secured by offsets such as forestry and the purchase of overseas units; the extent to which the Emissions Trading Scheme (ETS) should carry the load of securing the industrial and transport reductions and how the money that will be collected from the ETS should be used.

The emissions budgets are intended to be met by domestic action.

The Commission may advise on the use of offshore mitigation in the event of a shortfall being assessed after the budget period is over, but has recommended at this stage this would only be used in exceptional circumstances.

Luxon appeared to have those doors partly open.

But significantly, he hinted that National believed the ETS could not do the job alone.

“While we share the Government’s commitment to lower emissions, there are a range of ways to achieve net-zero, and we need to consider every option,” he said.

That contrasts with the views of his principal economic advisor, Matt Burgess, who, in his previous job at the New Zealand Initiative think tank, argued that the ETS alone could achieve New Zealand’s climate change ambitions.

Burgess argued that existing climate change reduction policies were enough, and further policies were  optional but not necessary to reach net-zero emissions by 2050.

His argument was predicated on offsets carrying the load, particularly by forestry.

He said that if the ETS price were to rise to $68 (which it has), then 10% of existing farmland would be planted in trees by 2050 and 19 per cent by 2070.

With this level of planting, by 2050, New Zealand’s net emissions of long-lived greenhouse gases would be negative, and by 2070, New Zealand’s net emissions of all greenhouse gases, including biogenic methane, would approach zero, he said.

The Government is currently consulting on forestry and the ETS.

Federated Farmers, in a submission, have said that all climate policy should be specifically examined through the rural proofing framework.

“We are concerned that many policies designed to reduce emissions take a Wellington-centric approach and are not designed with all rural New Zealanders in mind,” the submission said

Federated Farmers has been arguing against the large scale conversion of farmland to exotic forestry and instead said, in its submission, that it supported gross emissions reductions.

But for now, the next changes will be bureaucratic

Shaw said that for the last four years or so, coordination of climate change policy across Government had been the responsibility of an ad hoc Climate Change Chief Executives Board.

“That is now being formalised into a fully-fledged Interdepartmental Executive Board under the Public Service Act 2020,” he said.

“It will have its own secretariat and the ability to directly commission work.

“That Board will report up to the Climate Emergency Response Group of Ministers.

“The agency Chief Executives who make up the Board will have individual accountability for ensuring their agency delivers on their part of the plan.

“But they will also have collective responsibility for ensuring we stay on track to meeting our overall emissions budgets and the 2050 target.”

Finance Minister Grant Robertson has already announced a multi-year Climate Emergency Response Fund, paid for with proceeds from the Emissions Trading Scheme.

“Next Monday morning, when we outline the detail of the Emissions Reduction Plan, the Minister of Finance will also outline the first investments from the Climate Emergency Response Fund – funding that will go towards the first round of initiatives within the plan. “

Robertson has always said this Budget will be about health and climate change.

The health expenditure is relatively easy to forecast; much of it is likely to be directed toward dealing with the accumulated deficits of the District Health Boards.

The climate change expenditure is not so clear. But the fact that Luxon and National are willing to support the targets announced yesterday suggests that Shaw has so far continued to manage his way through climate change, maintaining the bipartisan approach.

That suggests there may be nothing too radical in the Government’s proposals.

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