Monday, April 22, 2024

Govt’s emissions reduction plan close to reveal

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The deadline is fast approaching for the Government to make crucial climate change policy decisions as it prepares to release a consultation document on its Emissions Reduction Plan (ERP). The ERP is the formal response to the Climate Change Commission’s advice and will lay out New Zealand’s carbon budget for the coming years and policy to meet them.
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The deadline is fast approaching for the Government to make crucial climate change policy decisions as it prepares to release a consultation document on its Emissions Reduction Plan (ERP).

The ERP is the formal response to the Climate Change Commission’s advice and will lay out New Zealand’s carbon budget for the coming years and policy to meet them.

Officials and ministers are still working on what will go in the final ERP. However, ahead of this a consultation document will be released containing parts of what might be in the final plan. It is understood there had been consideration of releasing it this week, but the covid lockdown has led to a pause for thought.

Since the commission’s final advice, ministers and agencies have been discussing how they can support emissions reductions in their portfolios.

Some of the ideas that have come from this work form the basis of the consultation.

Other ideas that have already been consulted on – either through previous policy development or the commission’s consultation – will not be part of the consultation.

The feedback from this next consultation and previous work will then be brought together for the final ERP.

This will be NZ’s Long-term Low Emissions Development Strategy, which it will present to the international climate change meeting – known as COP 25 in Glasgow towards the end of the year.

Climate Change Minister James Shaw told an online briefing hosted by law firm MinterEllisonRuddWatt, that the ERP would be released in October.

Carbon News reported that Shaw told the business leaders listening to the briefing “there is no way that on God’s green earth that government policy alone can get us to where we need to be”.

Shaw says the very first thing businesses and government agencies needed to do was to start accurately measuring their emissions.

The minister said he knew there was a shortage of people capable of doing the measuring because the Ministry for the Environment (MfE) was regularly having its staff headhunted by the private sector.

Work is also continuing on NZ’s next National Determined Contribution (NDC). This is NZ’s commitment to reduce emissions under the Paris Agreement and is likely to be announced ahead of COP 26 in November.

The NDC was set by the last National government and the commission advised this was insufficient to meet the commitment to keep global warming to 1.5degC.

The commission also advised that current policies and emissions reductions pathways meant NZ would overshoot the NDC and would need to purchase international carbon credits to fulfil its treaty obligations.

Carbon News reported that Shaw told the briefing no decision had yet been made on what form the offsetting would take. Possibilities ranged from buying credits from countries with credible emissions trading schemes (ETS) to working with developing countries to reduce emissions.

“All of the options have downsides,” he said.

Shaw says people had well-founded suspicions of carbon markets after the use of “hot air” credits to meet their emissions obligations.

“It’s causing some queasiness in government right now,” he said. 

“We would want to step in very carefully.”

He says philosophically he has a strong preference for doing as much onshore as possible.

“Ideally you want to invest money on our own transition,” he said.

NZ is among a large number of countries that have missed a number of deadlines to file a more ambitious NDC as required under the Paris Agreement. The last National government submitted an NDC to reduce net emissions to 30% below 2005 gross emissions levels, over the 2021-30 period.

The last Labour-led government missed a 2020 deadline as it was waiting for advice from the CCC.

The political difficulty for Shaw is coming up with a credible NDC that is stronger while also explaining the need to use international credits to meet it.

The purchase of offshore carbon markets is problematic for a number of reasons.

First, there is still no international agreement on how international carbon trading will be allowed under the Paris Agreement.

Second, if the Government does go down this path it will have to explain why it is okay for NZ as a country to buy international credits to meet international obligations, but not okay for businesses in NZ to use such credits to meet their emissions reductions under the Government’s requirements.

Currently, ETS settings do not envisage any international credits in the NZ ETS up to the 2026 year, which is as far ahead as policy settings look.

Lastly, the Government will have to find the credits and pay for them. If they are to be credible, they might also be expensive.

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