Transitioning to a low-emissions economy

Friday June 01, 2018 Fiona Stokes

In Budget 2018, the Climate Change portfolio received $39 million in operating expenditure over the next five years, and $100.15 million in capital expenditure over the next 10 years. 


Within this portfolio, $8.825 million of the $39 million has been allocated over the next five years to provide the resourcing required to undertake the Governments’ Climate Change priorities.  This is the additional resources needed to deliver on the Government’s commitments to address climate change, which includes passing a Zero Carbon Act, establishing a Climate Change Commission and amending the New Zealand Emissions Trading Scheme.  This portfolio also provides resources to respond to the recommendations of the Climate Change Commission. 


The capital expenditure in the Climate Change portfolio is allocated to the Green Investment Fund, with $9 million tagged to be spent in the 2018/19 year followed by $5 million per annum through to 2021/22. 

The Treasury, the Ministry for the Environment, the Ministry for Business, Innovation and Employment, the Ministry for Primary Industries and the Energy Efficiency and Conservation Authority are involved in the Fund. 


The purpose of the Green Investment Fund is to invest in assets that reduce carbon emissions.  The Government has backed $100 million in funding, with the thought that it will stimulate $1 billion in new investments in low carbon industries by 2020.  This fund supports the three unconditional national targets the Government has set for reducing New Zealand’s greenhouse gas emissions by 2020, 2030 and 2050. 


The 2020 target states that we will reduce our greenhouse gas emissions to be 5% below New Zealand’s 1990 greenhouse gas emissions level.  The 2030 target is 30% below our 2005 greenhouse gas emissions levels, and our 2050 target is a 50% reduction in greenhouse gas emissions from 1990 levels. 


The 2020 target is unlikely to be achieved if we continue to take a business as usual approach.  New Zealand cannot afford to be blasé about climate change and lowering our emissions.  Our country has one of the highest per capita greenhouse gas emissions in the world, even though our total emissions are very small and make-up less than 0.2% of global emissions. 


The reason for having such high per capita emissions is because of our substantial agriculture sector, of which a very high proportion of production is exported.  This accounts for nearly half of our total emissions.  Our next biggest problem is our love affair with cars, particularly for short trips and commuting. 


Single occupancy vehicles are causing congestion and we need to move towards investing in transport infrastructure that is mode neutral.  This viewpoint is supported by the Productivity Commission, who in their draft report on transitioning to a low-emissions economy that was released at the end of April, noted “[f]uture land transport policy should put emissions-reduction goals more centrally in government planning, adopt a more mode-neutral approach to assessing and funding new projects, and make greater use of demand-management techniques such as congestion pricing.”


The Productivity Commission’s draft report on transitioning to a low-emissions economy makes 140 findings; 50 recommendations; and asks 11 questions.  The Commission states that moving to a low-emissions economy will require:

  • Getting emissions pricing right, to send the right signals for investment
  • Harnessing the full potential of innovation and supporting investment in low-emissions activities and technologies
  • Creating laws and institutions that endure over time and act as a commitment device for future governments; and
  • Ensuring other supportive regulations and policies are in place (including to encourage an inclusive transition).


This report is out for feedback, and a final report will be presented to the Government in August 2018. 


In May, the second report of the Climate Change Adaptation Technical Working Group (CCATWG) was released.  This report presents a series of recommendations, and builds on the stocktake report that the Working Group released in December 2017. 


In a nutshell the CCATWG looked at leadership; funding; information to support decision-making; and building capability and capacity.  A key recommendation is that a national risk assessment needs to be undertaken and an action plan formulated based on this assessment.  The action plan and risk assessment need to be regularly updated, as more information becomes available or as the situation changes.


Another interesting recommendation from this Working Group is the amendment of the Local Government Management Act 2002 (LGMA).  This amendment would specify that climate change adaption is a function of local government.  This is interesting because the Resource Management Act is the only statute that gives legislative mandate to the effects of climate change.  This of course will change under the Zero Carbon Bill; then all legislation will have to be assessed in regards to its impact on climate change. 


Consultation on the Zero Carbon Bill opens this month and continues throughout July.  It is proposed that the Government considers policy between July and September, with the bill to be introduced in October 2018.


In the meantime though, if the LGMA was amended it would mean all resource management discussions would also consider a changing climate when determining needs and limits, such as those around water quantity and quality.  This could type of amendment could also potentially clarify the responsibilities of local and central government in regards to hazard management, and water and land use planning.