May 19, 2022

Is it really a “landmark” Emissions Reduction Plan?

Or has it fallen short from the action need?

On Monday 16 May we saw the release of New Zealand’s first Emissions Reduction Plan (ERP).

The plan sets out the strategies, policies, and actions to ensure we meet our first emissions budget (2022-2025), and positions us well to achieve subsequent budgets. Although the ERP comes with a range of welcome new strategies and policies to reduce emissions, it seems to have fallen short of its potential. 

With the announcement of Budget 2022, we get the opportunity to delve deeper into how the Government plans to achieve the first emissions budget, and the distribution of funding from the Climate Emergency Response Fund (CERF) across households and industries.

Transport will receive a $1.2 billion investment

Starting the move towards a low-emissions economy is a $2.9 billion climate change package. 

New Zealand has been especially vulnerable to increases to global fuel prices, putting pressure on households. Investment in transport aims to improve access to affordable, sustainable transport options. It also aims to decrease emissions, as transport accounts for 39 percent of total domestic CO2 emissions. Investment will help to move New Zealand away from fossil fuels, improve the viability of alternative means of transport, and decrease our nation’s vulnerability to global fuel prices. 

Decarbonising the bus fleet won’t solve underlying challenges

By 2035, the Government intends for the entire bus fleet to be decarbonised, with plans to establish a zero-emissions public bus mandate by 2025. This will come through a $40 million investment spanning multiple years. To incentivise more New Zealanders to use public bus services, the half-price public transport initiative is being extended to August 2022. 

As buses are promoted as an alternative means of transport, demand for services will grow at a time when bus drivers are not in abundance. In an attempt to address this, the Government is introducing a $5 million initiative to improve the retention and recruitment of bus drivers through more attractive terms and conditions. However, this does not solve issues of pay and the issues that come with working non-standard hours or shift work. 

More than 50 percent of workers in New Zealand drive a car to work. Consequently, promoting the affordability and encouraging the uptake of zero or low-emission vehicles is of great importance. The Government has committed to continuing the Clean Vehicle Discount, which provides rebates to consumers who purchase zero or low-emissions cars, and to higher fee charges to cars with higher emissions. This seems laudable, but many have argued that people who are looking for a low-emissions vehicle are most likely in a position to afford one without the rebate. 

The main initiative for encouraging uptake of zero-and low-emission cars has been the introduction of a $569 million vehicle scrappage scheme, which aims to support lower-income households to replace their vehicle with a lower-emissions alternative. This scheme seemingly leaves out the middle-income group, and begs the question of what will happen to the second-hand car market?

Is the investment in housing enough? 

A key area in the ERP has been supporting sustainable, affordable homes across New Zealand, and Budget 2022 has committed to a variety of initiatives to do so. The Warmer Kiwi Homes programme has been extended to June 2024, through a $73 million investment to ensure low-income homeowners can save on energy bills and reduce emissions. Although the extension to the programme is welcomed, the Government has missed an opportunity by only extending it one year and not increasing the funding. 

Housing will also have improved insulation standards and will require 40 percent less energy to heat. Additionally, to support households preventing food waste, there will be improved access to food waste services, and increased investment in waste infrastructure. 

The Government has stated that it wants to “build our brand as one of the most sustainable producers of food and fibre in the world”, in order to keep up with changing consumer expectations in the global market. A pivotal investment in achieving this is the $800 million in climate-related research, science, and innovation. But industries such as agriculture, forestry, and energy will still require significant support and investment to sustainably transition to a low-emissions economy. 

$338 million investment to accelerate development of GHG mitigations in agriculture

Agriculture is one of the leading contributors to greenhouse gas (GHG) emissions in New Zealand, and many businesses will require significant investment to ensure a sustainable and just transition. Budget 2022 will accelerate the development of GHG mitigations, as well as providing $35 million to support farmers, growers, and Māori-owned entities to transition to a low-emissions systems. Forestry has also received notable investment, through a $156 million initiative, which will establish native forests by developing long-term carbon sinks and improving biodiversity.

Budget 2022 commits a significant $764 million towards energy and industry, which make up around 27 percent of New Zealand’s total emissions. Investment is aimed at “supercharging” efforts towards encouraging cleaner energy options and transforming the energy system. $678 million will be put towards expanding the Government’s Investment in Decarbonising Industry Fund (GIDI).

The ERP and Budget 2022 fall short of potential 

The main headline was the significant investment in transport, aiming to improve affordability and encouraging uptake of zero-to low-emissions alternatives. However, New Zealand still lacks the adequate infrastructure to support an efficient public transport service. Additionally, the introduction of the scrappage scheme and continuation of the Clean Vehicle Discount scheme both come with caveats. 

Households will also play an important role in transitioning to a low emissions economy, but the investment in supporting this does not seem sufficient. Likewise, for industry, there is commitment to investing in climate-related research, and transitional support in agriculture, but more could have been done. 

The announcement of the ERP was marked as a “landmark” day for New Zealand, with policies and actions to push us towards achieving our first emissions budget. However, the ERP seems largely to be composed of a lot of plans to plan, or plans to explore, with not enough concrete actions to address urgency of emissions reduction and climate change.