There's a lot of good in the Government's Emissions Reduction Plan, but a dive into the numbers underpinning it reveals it may not get us to our climate targets, Marc Daalder writes
Analysis: No one is quite sure what to make of the Government's new 13-year climate plan.
Farming groups are happy. Some climate advocates aren't. Electric vehicle backers, however, are ecstatic. And the fossil fuel lobby has lambasted the plan.
The Opposition is torn between saying the plan will do too much or not enough.
There's so much in the plan that criticism of individual parts feels like nitpicking. Besides, the majority is based on the advice of the independent Climate Change Commission, which most stakeholders and political parties have sought not to politicise.
This is one of the key benefits for the Government from its creation of an institutional framework for decarbonisation. National committed to the Zero Carbon Act in 2019 and is therefore at least nominally committed to the independence and expertise of the commission. Chris Luxon endorsed the Government's emissions budgets last week, given they were so close to what the commission recommended.
While National has tried to stake out its own ground, saying it agrees with the targets but not necessarily the path, it will find it difficult to thread the needle between being seen as too critical of climate action or losing its own independent voice on the issue.
Much of this is intentional, and not necessarily nefarious. Taking the politics out of climate action has worked reasonably well in the United Kingdom, which has reduced emissions by 42 percent since 1990. The UK has an independent Climate Change Committee and a cross-partisan consensus on climate action - although individual parties still disagree about the exact policies to achieve that action.
But while it makes climate policy more politically feasible, depoliticising and institutionalising the issue also acts as a convenient smokescreen for the Government. Criticisms that it has gone too far or has implemented policy poorly can be dismissed as anti-climate. Criticisms that it hasn't done enough can be waved away by pointing to the next step in the institutional framework.
Between 2019 and 2021, Climate Change Minister James Shaw was able to rebuff criticism of the Government's poor record on climate by saying we had to wait to see what the commission recommended. Then, for the past year, he's said that critics just need to wait to see the Emissions Reduction Plan. Next, he'll say that it takes time to implement such a massive plan - and much of it isn't scheduled to start for a couple of years still.
These are are legitimate points, but they also obfuscate the discussion. There are really two key questions in climate policy, and it's not clear the Government has landed right on either of them.
The first is whether our targets are ambitious enough. It's clear from expert testimony in a High Court challenge of the commission's advice and from Newsroom's own reporting that our domestic emissions budgets are not aligned with what the science says is needed to keep global warming below 1.5 degrees.
That issue has been (literally) litigated and relitigated over the past year. With National now agreeing to the Government's budgets, it seems unlikely they'll change, short of a major and unexpected reversal from the High Court.
The second question is still up in the air, and ever more important with the release of the climate plan: Are we actually on track to achieve our targets?
Under current policy, the answer is clearly no. We have an 11.5 million tonne gap between the first emissions budget, capping greenhouse gases between 2022 and 2025, and what projections say we'll emit under current policies.
The Emissions Reduction Plan seeks to close that gap, as well as the much more significant gaps between current projections and the more ambitious second and third emissions budgets.
Shaw and Finance Minister Grant Robertson said repeatedly on Monday that they were confident the plan would achieve the budgets. But digging deeper into the numbers shows their certainty may be misplaced. It's certainly possible to achieve the budgets, but it isn't guaranteed.
The first issue is that of the Tiwai Point aluminium smelter, as Newsroom reported on Monday. The climate commission’s work anticipated the smelter would close in 2024 as previously announced, freeing up nearly 600 megawatts of clean electricity to aid the country’s transition.
However, the smelter’s owners floated earlier this year the possibility that the smelter may remain open. This would require New Zealand to build huge amounts of additional renewable electricity generation in the next few years or to slow the pace of the transition.
Shaw and Energy Minister Megan Woods both said on Monday the Government’s projections weren’t reliant on Tiwai closing in 2024. But the plan appeared to disagree, saying the projections incorporated the 2024 closure. Without the closure, New Zealand would emit an extra 2.4 million tonnes of greenhouse gases between now and 2025, another 9 million tonnes between 2026 and 2030 and 3 million additional tonnes between 2031 and 2035.
That's not the only source of uncertainty, however. A closer look at the numbers for the forestry sector show even the massive investment and regulatory changes in the Emissions Reduction Plan won't meet the sector's sub-target. Officials want the sector to remove 26.4 million tonnes of carbon dioxide from the atmosphere during the first budget period, but under the plan it will fall short of that by around 2 million tonnes.
Likewise, in the second budget period, forestry is meant to sequester 57 million tonnes, but will only actually absorb between 52.4 and 55.8 million.
The range depends on whether permanent pine forests are removed from the Emissions Trading Scheme, a move the Government is currently considering to avoid planting too much of the country in exotic trees. If permanent pine remains, then the forestry sector will over-achieve the third budget, sequestering 119 million tonnes compared to the 81.6 million tonnes expected by officials.
However, if permanent pine is turfed from the ETS, as seems likely, then forestry will only sequester 77.7 million tonnes, falling short once again.
Agriculture could also put New Zealand over the top of its emissions budgets. Unlike forestry, precise figures for agriculture and most of the rest of the sectors won't be available until Friday, but even the charts provided in the plan show the potential issue.
Nationally, New Zealand will achieve the budgets if policies are effective at reducing emissions (the high policy impact scenario at the top of the green bar). If policies are less effective, we end up somewhere in the orange low impact area. If all of our policies turn out to be low impact, we're at the top of the orange bar.
It's not clear exactly what makes up those different scenarios. But agriculture plays a major role.
Agriculture's own chart shows that in the second and third budget periods, large amounts of emissions reductions are reliant on high policy impact - around 10 million tonnes a year between 2026 and 2030 and another 8 million a year between 2031 and 2035.
Nothing currently exists in the agriculture sector to reduce emissions by a collective 90 million tonnes over a decade. Those high impact figures, therefore, are likely reliant on methane inhibiting technology which hasn't really been proven to work at all, much less at scale.
Returning to the national chart, moving 10 million tonnes a year into the orange in the second budget period puts the country perilously close to overshooting its emissions budget. Another 9 million tonnes from Tiwai Point could push us over the edge, as might even 3 million tonnes from a gap in plantation pine. Beyond forestry and the smelter, there's still plenty of room for policies to go wrong.
The third budget is more resilient, but still vulnerable if enough policies turn out to be low impact.
Either way, it seems clear that the Government is over-confident in promising its plan will achieve the budgets. That relies on methane inhibitors coming to market (which seems unlikely), Tiwai Point closing in 2024 (which seems unlikely) and a decision to keep permanent pine in the Emissions Trading Scheme (also unlikely).
When it comes to the second crucial question of climate policy - will we actually achieve our targets? - the jury is still out.
