Climate Commission delivers inconvenient truths to Govt

Newsroom

6 days ago

Analysis: Climate policy is in many ways one of the most wickedly complex areas of government.
The workings of the Emissions Trading Scheme, aligning scientific findings about difference greenhouse gases or climate impacts with policy design and even just measuring emissions from a cow can all be embroiled in subjective, heated debates.
On occasion, though, it can be as simple as basic arithmetic.
That's where the Climate Change Commission has landed with its progress report on the Government's climate policies, released early Friday before markets opened.
Chief executive Jo Hendy tells Newsroom it's the commission's first chance to 'run the ruler' over the Government's climate plan, released in December. It's only the second-ever progress report, with last year's version having mostly evaluated then-cancelled Labour policies because the Government hadn't yet announced its own approach.
While a lot of complex analysis underpins the independent watchdog's findings, the headline information is the result of a simple adding up exercise that effectively cuts through the Government's spin on how ambitious its climate plan really is.
New Zealand is on track to meet the first five-yearly emissions budget – here, the commission agrees with the Government.
The rest of the picture looks far less rosy. For the second budget, covering 2026 to 2030, there are moderate to significant delivery risks – and much greater ones than featured in last year's report.
The Government's own projections leave it with just a couple million tonnes of headroom, which could easily be wiped out by a dry year prompting the burning of Huntly's coal stockpile, a wildfire or big storm destroying a large enough forestry block or the failure of the already shaky carbon capture policy.
The real concern comes for the third budget and the 2050 net zero target, where again the delivery risks have grown.
'Current plans are insufficient to meet the third budget and further action is required. There are also significant risks for meeting the 2050 target unless further action is taken,' the commission writes.
The Government's projections show it still has to cut emissions by over nine million tonnes over the third budget period. While Climate Change Minister Simon Watts says the Government will sort out how to do so in its third emissions reduction plan in 2029 (a point by which he also presumably hopes to no longer be responsible for sorting that out), the commission says that leaves it too late.
Watts' current climate plan cuts emissions by just 3.3 million tonnes in the second budget period and he's already pretty confident that's everything the Government can do. (The commission, for what it's worth, has found tens of millions of tonnes of additional cuts that a sufficiently motivated government could implement.) How, then, is a future government to nearly triple that total with a plan in 2029?
'The Government needs to act ahead of the next emissions reduction plan (due in 2029) as many options that would make a difference will take time to take effect. For example, New Zealand Steel's electric arc furnace took three years to progress from funding approval to operation,' the commission insists.
Fortunately, the commission finds there are significant opportunities for the Government to make up the difference if it starts now. There are nearly 20 million tonnes of cuts New Zealand could achieve in the third budget period through fixing up the Emissions Trading Scheme and implementing additional targeted policies.
Agricultural and power generation emissions alone could fall by enough to plug the gap through regulatory reforms and incentives for uptakes of new technologies.
'This isn't just about hitting a number on an emissions reduction target, it's also about doing it well so that we cut energy costs, create those new jobs, protect market access and ultimately it's about our competitiveness and resilience as a country – as well as making that better future for our kids,' Hendy says.
The ball is now in Watts' court, but don't expect him to do much with it. The commission returns repeatedly in this report to another issue that Watts is sitting on: Whether the budgets actually need to be revised to be more ambitious, as it recommended last year.
In brief, the commission found last year that accounting changes for how we measure the emissions of cows, cars and other greenhouse gas sources mean it will now be easier to meet the budgets. Those changes don't represent real action New Zealand has taken. If we wanted to preserve the original ambition the budgets represented when they were set in 2022, the commission reported, we would need to revise them downwards.
Because those new recommended budgets are still on Watts' desk, the majority of the commission's report today checks progress against the existing targets. However, it does also note at points how much additional effort would be needed to meet its recommended budgets.
For the second emissions budget, that would be another 15 million tonnes of cuts over the second half of the 2020s. For the third budget, another 18 million tonnes on top of that. Collectively, the revisions represent about half of New Zealand's annual gross emissions – or more than 30 times the reductions the Government claims will arise from its carbon capture policy.
While there are some subjective inputs to these calculations by the commission, the bulk of it comes down to hard maths. Or, as Watts might label it, an inconvenient truth.