Emissions targets announced

The Minister for Climate Change has announced New Zealand’s first three emissions budgets – “another milestone on of the journey towards a zero-carbon future”.

An emissions budget is the total amount of greenhouse gases (GHGs) that can be put into the atmosphere over a period of time. 

The three budgets unveiled by James Shaw set out the total emissions New Zealand must cut over the next 14 years. The Zero Carbon Act requires that emissions budgets are met through domestic action alone.

Shaw, pictured, says the government’s announcement leaves much to be done to achieve a net-zero future, but having the binding budgets in place is a critical part of the strategy to rapidly reduce pollution that causes climate change.

“Meeting the budgets will help to create new industries and high-value jobs, lower household energy bills, a more climate-friendly agriculture sector, warmer, drier homes, exciting new technologies, the protection of native species and eco-systems, cost savings for businesses and greater resilience in the face of global uncertainty,” he says.

“In the last term of government, we passed legislation that enshrined in law a long-term target to reach net-zero by 2050. To keep future governments on-track, the Zero Carbon Act established a system of five-yearly emissions budgets that would act as stepping stones towards the 2050 target.

“The first three emissions budgets will ensure New Zealand is playing its part fully in the worldwide effort to keep global warming to 1.5 degrees.”

The Emissions Reduction Plan (ERP), which will be released on May 16, will set out how the government plans to deliver on the first emissions budget. 

Grant Robertson, the Minister of Finance, will outline the first investments from the Climate Emergency Response Fund on the same day.

The ERP follows on from advice to the government from the Climate Change Commission and will have implications for the automotive industry.

What the budgets are

The cabinet has agreed the first three emissions budgets will be:

• Emissions budget 1, 2022-25: 290 megatonnes (Mt) of carbon-dioxide equivalent GHGs, 72.4Mt per annum.

• Emissions budget 2, 2026-30: 305Mt, averages 61Mt pa in principle.

• Emissions budget 3, 2031-35: 240 Mt, 48Mt pa in principle.

Emissions budget 1 averages out at 72.4Mt per annum. That equates to 2Mt each year less than the five-year average leading up to this point, 2017-21, and 3.1Mt less than projected emissions for 2022-25.

Emissions budget 2 averages out at 61Mt per annum. That equates to an average of 13.4Mt per year, nearly 20 per cent below average annual emissions from 2017-21.

Emissions budget 3 averages out at 48Mt per year, which equates to an average of 26.4Mt per annum, or about 35 per cent, less than the average annual emissions from 2017-21.

Rather than setting a target for emissions to reach a certain level in a single year, an emissions budget represents a multi-year target. 

‘Bend the curve’

“Actions taken by our government over the past four-and-a-half years have already reduced the trajectory of future emissions,” says Shaw. “But there is much more we must do to really bend the curve downwards until we hit net-zero.

“That is why the Emissions Reduction Plan is so important. It requires nearly every part of government to act to reduce emissions across the country and to ensure all New Zealanders benefit from the transition.

“The ERP will be a blueprint for a more equitable, prosperous and innovative future – and all within planetary limits.”

In its advice to the government, the Climate Change Commission recommended a special parliamentary debate on the first three emissions budgets before the ERP. That takes place on May 12. 

The emissions budgets announced on May 9 are not the same as New Zealand’s nationally determined contribution under the Paris Agreement, which is also managed as a multi-year emissions budget from 2021-30.

The government has yet to determine how agricultural emissions will be priced with advice from the primary sector climate partnership He Waka Eke Noa due with ministers this month.

But Shaw says whatever the advice, the law makes it clear on-farm emissions will be priced from 2025 whether that’s part of the emissions trading scheme or another mechanism.

While the emissions trading scheme is an important tool, he notes it will only be responsible for about one-third of GHG cuts. The remainder will come from other initiatives the government puts in place.