Consultation: Ināia tonu nei – Climate action for Aotearoa

Extremely urgent and effective action needed

Although the need for action to limit climate change has been well understood since at least 1990, global CO2e emissions have continued to increase strongly over the past 30 years and only now is the rate of increase showing some signs of slowing a little.

It has become very clear that, in order to avoid potentially disastrous consequences, if still possible, we need to limit global warming to 1.5°C above pre-industrial levels. The Paris Agreement, which came into force on 4 November 2016, was a step forward in addressing this very major challenge, but the Nationally Determined Contributions (NDCs) submitted so far are not nearly adequate to meet the target.

The publication of the IPCC Special Report on Global Warming of 1.5°C, in October 2018, was a further step forward in showing how we need to proceed, but its findings are widely held by scientists to be quite conservative. For example, the report says that by 2100 we can expect a sea level rise of up to 0.59 m at 1.5 °C warming, or up to 1.1 m at 2 °C warming, but a peer reviewed article by James Hansen and 18 other scientists concludes that sea levels could rise “several metres” by the end of this century (Hansen et al, Atmospheric Chemistry and Physics, 2016).

The IPCC report stated that, to limit the temperature increase to 1.5°C above pre-industrial levels, global net human-caused emissions of CO2 need to fall by about 45% from 2010 levels by 2030, with coal emissions falling by around 67% over the same period, and with all these emissions reaching net zero by around 2050, which the report stated would give a 66% chance of achieving the 1.5°C limit. However, some scientists are saying that emissions reductions need to be achieved significantly faster than this to meet the 1.5°C target, while others are saying we have already left it too late to come anywhere close to meeting this target, and human civilisation and the future of many other living species is now in serious danger.

To have some hope of maintaining a reasonably habitable planet for ourselves and for many other living species, we need to take extremely urgent action. The CCC’s draft recommendations to the NZ Government, if implemented, would be a major step forward from our very feeble response to climate change so far, but we do not consider them to be nearly strong enough.

As the draft report says, to the extent that is possible, we need to address this problem in a way that is fair to people and protects their living conditions and livelihoods. But we strongly reject the advice of the draft report that economic growth must be allowed to continue. What we very urgently need is change, not economic growth. For example, fifty years ago, we probably had a fairer, better organised society than we do now, even though the gross domestic product (GDP) at that time was much lower than it is today.

Climate change is almost certainly the greatest challenge and the greatest danger that mankind has faced over at least the last 100,000 years. To protect ourselves and our planet, we must take very urgent and effective action to address it.

STRONGLY DISAGREE
The proposed CCC budgets are far weaker than what is required to meet the reductions that the IPCC 2018 report says are needed by 2030 to limit global warming to 1.5°C. Unless the world meets the IPCC’s 2030 targets, it is going to be extremely difficult, or impossible, for the world to meet the IPCC’s 2050 net zero target.
As a developed country that has very high emissions per capita and has so far taken only very feeble steps to address this, we should be aiming for significantly higher reductions in our emissions than the IPCC report says are needed by 2030. We should also be aiming higher because there is quite a strong possibility that the IPCC has underestimated what is needed.
Long lived gases: Based on the charts in the CCC draft advice report (p35), the proposed budgets for long-lived gases give gross emissions falling from approx. 44 Mt CO2 pa in 2010 to approx. 35 Mt CO2 pa in 2030 – a reduction of around 20%. This is way below the 45% figure given by the IPCC as being required.
We need to take urgent steps to rapidly phase out of the use of fossil fuels, both for process heat, particularly the use of coal, and to power transport. Among other things, this will require a rapid increase in electricity generating capacity from renewable energy sources.
Biogenic methane: Under the Climate Change Response Amendment Act (2019) the targets for emissions of biogenic methane, in relation to 2017 levels, are a reduction of 10% by 2030, and a reduction of 24-47% by 2050. The CCC budget of an 11.4% reduction from 2018 levels by 2030 is in keeping with this, but the Act’s 2050 target is much more challenging.
There are various steps that could be taken, starting immediately, to reduce these emissions, probably at a significantly faster rate than has been budgeted for in the CCC draft advice report. We recommend that these possible steps be further reviewed and the appropriate ones taken to gain a faster reduction in emissions.

STRONGLY DISAGREE

The current generation is responsible for a large part of the problem globally because both New Zealand and many other countries have allowed emissions to keep increasing, even though the need to start reducing them has been clear since at least 1990.

In New Zealand, we have the knowledge and the resources to immediately start taking rapid and effective action, aiming considerably higher for long-lived gases than the 45% reduction from 2010 levels by 2030 that the IPCC says is required. We also have the knowledge and resources to start making significant reductions in biomethane emissions. With proper planning and management, we also have the ability to achieve these reductions in a way that helps protect peoples’ living incomes and livelihoods.

In economic terms, taking rapid and effective action starting immediately is far more cost effective that taking a slow approach to addressing this situation. The slower our response is to the very large challenge we now face, the more greatly damaged the planet will be that we leave for future generations.

DISAGREE – CHANGES NOT AMBITIOUS ENOUGH

@1. Support Commission’s assessment of country’s NDC: The NDC (Nationally Determined Contribution) our Government submitted under the Paris Agreement in October 2015, to reduce our greenhouse gas emissions to 30% below 2005 levels by 2030 was appalling weak. What was not made clear was that it compared gross emissions in the base year with net emissions in the target year. On a consistent net-net basis (based on 2015 data – the most recent data available when the NDC issue became clear), this was actually an undertaking to increase net emissions by around 7% over 2005 levels by 2030.

If the government had been deliberately setting out to disguise how appalling weak our NDC actually was, it seems that using this unexplained gross-net measurement technique would have been a good way of doing so. Years later, many people are still unaware of how weak our NDC actually is, though the Guardian paper, and others, have seen through this.

@2. Form of NDC and other emissions targets needs to change. In its draft advice report the CCC is still referring to NDCs defined on this gross-net basis (eg, p 151 and following). We need to immediately move away from defining our NDC, and other emissions reduction targets, on a highly confusing gross-net basis, and move to consistent net-net or gross-gross methods of defining these, which are clearly specified.

(In the early days of international efforts to limit climate change, under the Kyoto Protocol, which came into force in 1997, the effects of forestry operations on emissions were only allowed to be taken into account post 1990. This meant that under the Protocol rules 1990 gross and net emissions were treated as being the same, and comparisons of future emissions with 1990 emissions often ended up being expressed in what was effectively a gross-net basis. This is way back in history now, and hence it does not provide any support for continuing with the confusing gross-net methods of presenting emissions reductions.)

@3. Do not support the Commission’s stance on a revised NDC: We urgently need to replace our current appallingly weak NDC with an NDC under which, for reasons covered elsewhere (see under Big Issue 6), we are undertaking stronger targets, at least for long-lived gases, than are laid out in the IPCC 2018 report to hold global warming to under 1.5°C. Rather than relying just on political decisions as to how much our NDC is strengthened (p 154), we very strongly recommend that the Commission comes up with a proposed revised version of the NDC that meets the above requirements, and presents it to the government and to the public.

PARTIALLY AGREE
Growing exotic timber forests is useful for providing paper, timber and biomass fuel, but is not an appropriate way of providing longer term reductions in overall emissions because most of the carbon sequestered in the trees is only held back from being released into the atmosphere for a limited time after they are felled.
Sequestered carbon in re-established native forests can be used to offset some of our emissions over the coming period, but one needs to be aware that there is no certainty that carbon in native forests will remain sequestered over the long term. For example, with a warming planet, forests are becoming more likely to be destroyed by fire, increasing temperatures could lead to forests dying back, and steps could be taken some time in the future to start removing the replanted forests again.
For the above reasons, we need to be focussing primarily on reducing our actual emissions, rather than off-setting them using carbon sequestered in exotic or native forests.
Beyond that, re-establishing native forests makes a lot of sense. The amount of native forest cover in New Zealand has been dramatically reduced since Europeans arrived in New Zealand. For example, there are now many places where native forest has been removed from steep areas which, as a result, are now eroding away, and from alongside streams and rivers, increasing the amount of water pollution and reducing the habitats for wildlife.
Besides forests, other areas such as wetlands and tussock country need to be preserved and restored. For example, in the Waikato large amounts of wetland areas have been converted into grazing areas, and the same has happened with tussock land in the Mackenzie Country, in the South Island.
It has been proposed that mankind limit its activities to 50% of the land area on the planet, leaving the remainder for wildlife to flourish. Re-establishing some of our native forests and other native vegetated areas would be a small step in this direction.

Transport
@ Need faster moves towards lower emissions fossil fuel-powered vehicles that are still being imported than the CCC is proposing– start by moving to EU standards by 2022. Leaving this till 2028 as in the CCC draft advice report, or to 2025 as the Government has recently announced, is unnecessary and far too slow. There is no significant reason not to do it now.
@ Need faster move to EV’s than the CCC is proposing. To have some certainty of reducing emissions to levels below what the IPCC say are needed by 2030, reaching a level of only 50% of imported vehicles being electric by 2027 is likely to be too slow.
@ Need a rapid move to low emissions public transport, including options that are faster and more cost effective than commuting by car. Also need more walking and cycling options.
@ Need to move funding currently being used to expand road transport into developing and operating public transport.
@ Moving to a decarbonised inter-city rail system makes a lot of sense. We could then move to conditions that used to be in place until 1982, under the Transport Licensing Act 1931. Freight being sent over more than certain specified distances was required to be sent by rail. As soon as a fully electric rail system is in place between any two cities, this step should be taken for all major truck transport still powered by fossil fuels.
@ We recommend that the CCC makes a case to the government for imposing an appropriate carbon charge on fuel used by international planes and shipping.

Electricity generation
@ To allow rapid development of electricity generation from renewable energy in place of fossil fuels, the way the electricity market operates needs to be changed as quickly as possible so that electricity generated from renewable resources gets priority access to the market, and electricity prices to consumers are based on the average cost of generation, not on the price paid to the highest bidding supplier feeding into the grid. This critically important issue does not seem to be covered in the CCC draft advice report.
@ The changes introduced in 1987, and subsequently, that led to domestic electricity prices roughly doubling, also need to be addressed and corrected.
@ Current obstructions to local generation by households, businesses and communities need to be removed, by allowing them to sell back surplus electricity at a reasonable price. The necessary steps also need to be taken to give them straightforward methods for establishing and running local grids, where this is advantageous to them or their communities.
@ Having a reliable electricity supply is going to be crucial. To help achieve this, we recommend that the CCC also seriously considers the development of tidal power, which can provide this reliability.

Energy
@ We strongly recommend a much faster move away from fossil fuels for providing process heat than the CCC is suggesting. Particularly in the case of coal use, much faster changes are needed to meet and exceed the IPCC statement that coal emissions need to be reduced around 67% below 2010 levels by 2030. We recommend that generation of electricity from renewable resources be rapidly increased so that there is sufficient power available to allow a full move away from using coal for process heat by 2025.
@ We recommend that the use of fossil fuels for heating and cooking be phased out of all new houses and buildings after 2022.

Agriculture
@ Regular inspections of farms by informed advisors, perhaps organised by local councils, to assess what changes can be made that would assist in controlling emissions, and to check that these are being achieved, would be useful.
@ We need to sort out and start applying appropriate emissions charges on agricultural activities.
@ We need a strong push to transition to sustainable farming methods, such as regenerative farming, which have the potential to decrease costs and increase revenues for farmers, as well as leading to large quantities of carbon being sequestered in the soil.
@ In order to start making significant reductions in methane emissions, further investigation and research into ways of reducing these is required, and steps need to be taken to ensure that these reduction methods are promptly put into use.

Material and waste
@ Besides the recommendations made by the CCC, we recommend that a detailed assessment be made of moving to bottles, containers and plastic product support trays that can be returned and re-used multiple times. Our understanding is that moving in this direction has a major potential to reduce waste, to reduce our overall use of plastic and to reduce emissions.

Equity
@ Emissions charges need to rise rapidly to the cost of the damage the emissions are causing, which the IPCC 2018 report says is more than US$100 / tonne CO2e – more than approx. NZ$137 at current exchange rates, and the IPCC also says that by 2030 emissions charges will need to be at least $135 / tonne CO2e – at least approx. NZ$185 at current exchange rates. With rising emissions, when the next IPCC report is released, we can expect that these price figures will have increased.
@ To make charges at these levels workable and politically acceptable, we recommend that the CCC makes a strong case to the government to start returning most of the revenue from the carbon charges to the general public via a citizen’s dividend paid monthly, with a half payment per child for up to two children per family, as was proposed in 2009 by US climate scientist, James Hansen.

STRONGLY DISAGREE

The draft budgets are not nearly ambitious enough. The IPCC 2018 report says that overall global emissions need to fall by around 45% below 2010 levels by 2030, with coal emissions falling by around 67% over the same period. The proposed budgets that the CCC has presented do not come anywhere close to achieving these reductions.

New Zealand needs to be aiming for considerably faster reductions in emissions than the IPCC has stated, for four reasons. (i) There is a reasonably strong possibility that the IPCC has underestimated what is required to limit global warming to 1.5°C. (ii) As a developed country with the necessary expertise and resources, we need to contribute a lot more strongly to reducing emissions than just meeting the global average requirement. (iii) Our per capita emissions of about 11.6 tonne CO2e per annum are around double the world average of 6.3 tonne CO2e per annum. We must rapidly reduce them. (iv) In the period since the need to reduce emissions became clear, our response has so far been appallingly feeble. For example, compared to 1990, by 2018 our gross greenhouse gas emissions had risen by 24% and our net emissions by 57%. This needs to change, starting immediately.

Emissions of long-lived gases can be cut much faster using existing technology. For example:
@ The use of coal and natural gas for electricity generation can be cut extremely rapidly by changing how the electricity market works. Renewably generated electricity needs to be given precedence in entering the market, regardless of price.
@ Phasing out the use of fossil fuels to provide a back-up supply of electricity when other generating sources cannot meet the load can also be achieved. For example, we could rapidly return to the use of ripple control to turn off domestic electric water heating systems when needed to lower peak demand. Steps to promote domestic solar generation with possible energy storage in hot water or batteries, would also be useful. Other steps such as the development of pumped hydro and tidal generation, will take longer.
@ We also need to make changes so that: (i) electricity prices are based on the average cost of generation by grid suppliers, and are no longer set by the highest priced electricity supplier feeding into the market; and (ii) so that approximate doubling of domestic prices since market changes were made starting in around 1987 can be reduced back to previous levels. Both these steps will lead to a fairer market and will encourage the use of electricity in place of fossil fuels.
@ The use of coal for process heat can and should be rapidly phased out. The use of natural gas for this purpose also needs to be phased out. One option is to move to wood chips or to other biomass. There is currently sufficient material generated from forestry operations to supply a lot of fuel, so this can start now. Another option is to move to electricity. This needs to start happening as soon as there is sufficient electricity generating capacity in place.
@ We consider the CCC target of eliminating coal use for food processing by 2037 is way too slow. This could potentially be achieved within around two-three years of a reliable alternative energy source being available, which means that a significant part of this industry could already have moved away from fossil fuels by 2025. We strongly recommend that 2025 be set as a target date for having moved away from using fossil fuels for process heat, provided sufficient electricity generating capacity is available for those that want to move to this energy source.
@ We need to move to requiring imported vehicles to be meeting EU emissions target of 105 grams of CO2 per km by the end of 2022, not by 2028 as the CCC says, or by 2025 which is the latest Government move.
@ We also need to work on how we can reach 50% of imported vehicles being electric well before the CCC proposed date of 2027, perhaps using Norway, where over 50% of new vehicles are now electric, as a model.

There are also lots of known ways of reducing farm emissions. This is an area where we have less experience, but here are some examples.
@ Moving to more sustainable farming methods, such as regenerative farming, can improve soil quality and stock health, reduce the need for artificial fertilisers, thus reducing the related emissions, and result in large amounts of carbon being stored in the soil.
@ Biogenic methane emissions can be reduced through use of feed supplements such as seaweed, by changes to farm management practices, such as moving to once-a-day milking, by moving to breeds of cattle with higher feed conversion efficiency and lower emissions, and in other ways.
@ Nitrous oxide emissions can be reduced by largely or completely moving away from the use of nitrate fertilisers to other options, such as regenerative farming. They can also be reduced by properly following fertiliser management guidelines regarding the right form of fertiliser, the right rate of application, the right timing of application and the right placement.
@ Good farm management practices can also reduce emissions in other ways.

New options for further reducing farm emissions are likely to develop over the coming period. For example, there is research in progress on developing a vaccine that would reduce methane emissions from cattle, and on breeding cattle that naturally give lower methane emissions.

PARTIALLY SUPPORT:

The principles sound reasonable, up to a point, but they do not seem to reflect the extreme urgency we face in reducing our emissions. For example, under Principle 4 it talks about “planning ahead so that technologies, assets and infrastructure can be replaced with low emissions choices on as natural a cycle as possible. This will help avoid scrapping assets before the end of their useful lives or being left with stranded assets.”

To achieve the above we would have needed to start our planning in 1990 or soon after, rather than in 2021. For example, the IPCC 2018 report says that, in order to hold global warming within the 1.5°C threshold, coal emissions need to fall around 67% below 2010 levels by 2030. This means that we need to make an extremely rapid exit from coal use, starting immediately, but coal-fired boilers typically have a life of 15-25 years, and it can be longer than this.

Because we did not start planning ahead when the need for action became reasonably well known and understood, about 30 years ago, we are going to need to take steps that are not always in accordance with the Principles, as currently presented.

NOT AMBITIOUS ENOUGH:

@1. Budgets not ambitious enough: From the graph for all gases (net) on p 35 of the CCC draft advice report, the New Zealand emissions figure was approx. 63 Mt CO2e per annum in 2010. A 45% reduction from this figure, which is what the IPCC says is required by 2030, would give annual emissions of approx. 35 Mt CO2e. This is way below the CCC draft budget figure for the emissions reduction to 57.3 Mt CO2e by 2030, and is also well below the CCC draft budget figure for emissions reductions to 44.6 Mt CO2e by 2035

To play our proper part in holdings global temperatures to under 1.5°C, the emissions reductions on which these budgets are based need to be very significantly increased, so that for long-lived gases they are more than what the IPCC say is needed, not less. Our suggestions under various sections of this report outline how these reductions can be achieved.

@2. Budget lay-out does not give adequate data: We do not consider giving just figures for total emissions budgeted over each multi-year budget period, and average emissions budgeted per year over each budget period is adequate. Also needed is the target emissions reduction by the end of each year, as were presumably used to plot the charts on P 35 of the draft advice report, but do not seem to be given in the report. Having these annual figures will allow it to be made clear, on an annual basis, whether we are on target to meet our budgets.

@3. Budgets need to give data for reductions in both long-lived gas and biogenic methane emissions. Since we are breaking down our emissions in this way, which makes sense, we need to separate out the data to make it clear what we are aiming for in each case, using comparable figures.

@4. Clear pricing of emissions units can drive change effectively: The Commission may be primarily focussed on setting and monitoring emissions targets, but it is actually the carbon charges under our ETS that can be used to give a clear signal to businesses and to others about making changes to reduce emissions. If indicative carbon charges were laid out over several future years, this would provide good clear information to businesses on what actions they should take and when. It would all be easier to achieve if the ETS reverted to a simple system using fixed price emission units over set time periods.

In its 2018 report, the IPCC projected that to stay on the 1.5°C path, by 2030 carbon prices will need to be in the range of US$135-$5,500 / tonne CO2-e (around NZ$185-$7,500 based on current conversion rates). This indicative price range is likely to increase in the next IPCC report. New Zealand needs to aim considerably higher than the global average, which implies that our carbon price by 2030 will need to be well over $185 / tonne. We need to rapidly ramp up to this level.

Sweden introduced a carbon tax, primarily levied on fossil fuels used for heating purposes and motor fuels, in 1991. The tax rate currently sits at SEK 1200 / tonne CO2 emitted – approx. NZ$196 / tonne CO2 emitted at current exchange rates. While Sweden’s economy has remained strong, from 1990 to today its net emissions fell from 36.7 Mt to 9.8 Mt, a reduction of 75%, while our net emissions increased from 34 Mt in 1990 to 56 Mt in 2018 an increase of 65%. This is an excellent example showing that much higher emissions charges than our current level of around $35 / tonne are both workable and effective.

@5. Subsidising the damage caused by emissions is counter-productive: The New Zealand Productivity Commission in its 2018 report on a Low Emissions Economy recommended that emissions should be priced at a level that reflects their harm, which the 2018 IPCC report (Special report on Global Warming of 1.5°C, Ch 2, p 151) says is above US$100 / tonne CO2-e (above approx. NZ$137 / tonne CO2-e at current exchange rates). When the next IPCC report is published, because emissions have kept increasing, any damage cost figures given are likely to be significantly higher than this.

Subsidising emitters for the damage their emissions are creating, which is what we are currently doing, is a completely counter-productive way of proceeding. There is therefore a very strong argument that the Commission should take the necessary steps to rapidly raise emissions charges to a price that reflects the IPCC damage cost figure, or higher. This could perhaps be done by setting appropriate budgets, if the Commission is given no direct control over pricing.

@6. Emissions charges need to be recycled to the general population: To be both workable and politically acceptable, the effect of significantly higher emissions charges on the prices of goods and services needs to be off-set by recycling a large part of the revenue back to the population, for example via a citizen’s dividend. This would also have the effect of reducing the rising income inequality our country has suffered from over the past 40 years or so.

In the short term, some of the revenue from carbon charges could also be used to assist businesses financially with making the necessary changes to how they operate, for example, moving away from coal use to more sustainable alternatives.

NOT AMBITIOUS ENOUGH

Support breakdown of emissions budgets but budgeted emissions reductions too slow: It makes sense to separate out long lived gases from biogenic methane, as shown on p 32 of CCC draft advice report, because they have different effects on global warming and different lives once released into the atmosphere. But as covered elsewhere in this submission, we consider that the budgeted reductions in emissions in both cases are too slow.

PARTIALLY SUPPORT

As a developed country with the necessary resources, New Zealand needs to play a strong role in reducing global emissions to net zero by 2050 and in holding global warming to the 1.5°C limit. We can do this by setting and achieving strong domestic budgets ourselves. We can also do this by giving advice and assistance to others.

Given the above, and given that the acceptance by New Zealand of international emissions units in the past has been a disaster, our recommendation is that the door to this option remain closed. If in the future, events occur that could threaten our ability to meet our international commitments, after receiving the necessary advice the government could decide how this should be dealt with, and possibly move towards accepting a small amount of offshore mitigation as a way of meeting our domestic commitments, if this is still allowed.

PARTIALLY SUPPORT

@1. Create climate change control group that has power to act, with some autonomy from government: While the Reserve Bank is accountable to Parliament, it has the autonomy to independently manage monetary policy so as to maintain price stability. Addressing climate change is such a critical issue that we believe it would be appropriate to consider following the pattern set with the Reserve Bank, and to establish an entity that has some freedom to take the necessary steps to achieve reductions in our emissions, without needing to always take matters to Parliament when actions are needed. For example, it could have autonomous authority to set emissions prices and to adjust budgets, so as to keep us on course to meet long term goals.

Relying on Parliament to decide on all major steps needed to reduce our emissions is almost certainly going to be a major obstacle to making progress because the different political parties will often have different views on what is needed. Setting up an autonomous climate change control group would side-step this problem. The CCC could perhaps fill this role, but given the change in responsibilities, its size, membership and funding would probably all need to be revised. We would ask the CCC to consider this further and make an appropriate recommendation to the government.

@2. Steps may need to be taken whether or not cross-party support can be achieved: If these matters are still being decided by Parliament, it certainly makes sense to seek cross-party support on emissions budgets, but we do not consider that weakening a budget to get cross-party support is a good option. Also, this process should not be allowed to cause significant delays in setting budgets when prompt action is needed.

PARTIALLY SUPPORT:

The recommendations generally seem to make sense, but the name “Vote Climate Change” for the proposed multi-agency appropriation seems rather strange, and allowing the establishment of this entity to be delayed as late as 31 March 2022 seems too slow.

PARTIALLY SUPPORT:

It makes excellent sense to consult with and take into account the views and aspirations of iwi/ Maori. However, care must be taken that the length of any consultation period does not cause undue delays on taking actions that may be needed. It also makes sense to take into account the views and aspirations of other New Zealand citizens.

FULLY SUPPORT:

This all sounds sensible, but the progress indicators for the Government having outlined its progress on developing the necessary partnerships between central and local government by 30 June 2022 and having published a work plan by 31 December 2022 seem too slow. Given the urgency of the situation, we recommend faster action.

PARTIALLY SUPPORT:

It makes excellent sense to have some sort of citizens assembly or public forum, but what has to be avoided is having people in the group with vested interests that could or will be adversely affected by steps taken to control climate change. In our view, what would make sense would be to accept people who do not have vested interests, and who do have a good understanding of climate change and what steps are needed to address it.

Given the urgency of the situation, allowing the Government to have up to 31 December 2022 to publish a proposal on this matter seems to be too slow. We recommend faster action.

PARTIALLY SUPPORT:

The approach you outline (CCC draft advice report, p 48) makes sense, but we consider the rate at which long-lived gas emissions will be decarbonised is too slow. To play our proper part in reducing emissions and global warming, as a developed nation with the necessary skills and resources we need to be reducing these emissions a lot more rapidly.

PARTIALLY SUPPORT:

Establishing, or re-establishing native forests, particularly on less productive land, on steep areas that are suffering from erosion, and along streams and rivers, makes a lot of sense. However, there are other ways of creating carbon sinks. For example, regenerative farming techniques, that have recently become more widely understood, allow crops to be grown and cattle to be raised, while also reducing or eliminating fertiliser use, and greatly increasing the amount of carbon in the soil. These other options could supplement the creation of more native forest. We recommend that they be considered further.

Also, it needs to be borne in mind that in the longer term, native forests may not always be successful in sequestering carbon. For example, on a warming planet they could be destroyed by fire, temperature increases could cause die-back of the trees, or there could be a change of direction in the future, with the forests being cleared again.

DO NOT SUPPORT:

The path proposed may be adequate to meet the first three draft budgets as currently presented, but the critical point is that the emissions reductions in these draft budgets are not nearly strong enough to meet the requirements that the IPCC says are needed by 2030. Also, as covered elsewhere, there are four reasons why we need to be aiming for considerably higher emissions reductions than the IPCC says are needed, particularly for long-lived gases. (i) There is growing evidence that the IPCC recommendations are no longer sufficient to limit global warming to 1.5°C. (ii) As a developed country with the necessary expertise and resources, we need to make a well above average contribution to controlling global emissions. (iii) Our per capita emissions of about 11.6 tonne CO2e per annum are around double the world average of 6.3 tonne CO2e per annum and we need to rapidly reduce them. (iv) The actions we have taken so far to reduce our emissions have been appallingly feeble and need to be ramped up immediately.

We very strongly recommend that the budgets be revised so that by 2030 the emissions reductions for long-lived gases are significantly exceeding what the IPCC says is necessary, and that we also plan to make stronger reductions in biogenic methane emissions by that date than are currently planned.

Achieving the above will require that the overall path be revised and significantly amended.

PARTIALLY SUPPORT:

The steps outlined in the CCC draft advice report (p 103) appear to be sensible, but there is one major matter that has not been covered.

As covered elsewhere in our submission, scientists and economists tell us that emissions charges need to rapidly rise to the cost of the damage that the emissions are causing, which the IPCC say in their 2018 report (Special report on Global Warming of 1.5°C, Ch 2, p 151) is above US$100 / tonne CO2-e (above approx. NZ$137 / tonne CO2-e at current exchange rates), though in their next report we can expect this price indicator to have risen. The New Zealand Productivity Commission in their 2018 report also recommended that emissions should be priced at a level that reflects the harm they cause.

Beyond that, in its 2018 report the IPCC projected that to stay on the 1.5 degree C path, by 2030 carbon prices will need to be in the range of US$135-$5,500 / tonne CO2-e (around NZ$185-$7,500 based on current conversion rates). Again, we can expect that in their next report this price range will have risen.

Raising emissions charges to these levels is only likely to be workable and politically acceptable if the revenue is recirculated to the general population, except for some being used in the short term to provide assistance to businesses transitioning away from fossil fuel use. In 2009, leading US climate scientist, James Hansen, proposed that this be done by what is effectively a citizen’s dividend. Every resident receives an equal monthly payment, with a half payment per child for up to two children per family.

Under this approach, the effect of the carbon charges on the prices of goods and services still gives people a financial incentive to make changes to what they buy and how they live, but in most cases, they will not result in people having financial problems. In fact, lower income families will generally become better off, and the rising financial inequity in our society will start falling back.

This approach has now been investigated and promoted by many groups internationally, and a form of it has been put in place in Switzerland and Canada.

We recommend that the CCC makes a strong case to the government to start returning most of the revenue from carbon charges to the general public via a citizen’s dividend, as is outlined above.

SUPPORT SOME OF THE ACTION, BUT MORE NEEDED:

Rapid specific actions needed to develop an integrated national transport network. For example, in Auckland a better rail system could reduce emissions, and also take a lot of pressure off our ever-increasing road traffic by giving many people a fast and efficient option compared to cars, buses or even light rail. With good signalling, one train line can carry the same number of passengers per hour as around 4-5 highway lanes. In Sydney, which for many years has had a good basic train system covering major areas of the city, around 5 times as many people per capita use the trains each day, compared to Auckland.

Extending the train system to the North Shore (and eventually on to Orewa, with a connection back to the line going to Whangarei), to Mangere and the airport (with the ability to then deal with airport freight) and to the Botany/ Howick area would give us a train system covering essentially all major areas of the city. Light rail could then perhaps be developed to feed into the core rail network.

This has all come up before, but the city has not been able to fund the changes needed. Projects such as this will likely require central government funding to make the cost of putting them in place viable. Funding could also come from sources such as vehicle entry charges to the city, as in Singapore. We need to start rapidly advancing these sorts of projects, many of which have been stalled for years.

Faster uptake of light electric vehicles needed. As in other areas, for fuel use in light vehicles we need to be aiming higher than the IPCC figure of a 45% reduction in emissions by 2030, perhaps setting a target of at least a 50% reduction. We do not consider that the CCC’s proposed target (p 108) of at least 50% of all light vehicle imports being electric by 2027 is ambitious enough to achieve this. Imported light vehicles typically have a life of around 14 years, so if the CCC’s proposed target were accepted, we can expect that it would be well after 2030 before half our vehicle fleet were EV’s, which is what is needed.

Reducing our emissions by moving rapidly to electric vehicles is a low hanging fruit option because the products and technology are all there. We mainly just need more financial incentives for people to take up this option, and more charging facilities, including for people who do not have access to private car parks.

In 2020, while in New Zealand around 2% of imported vehicles were electric, in Norway electric vehicles accounted for 54% of new vehicle sales. If we followed Norway’s model, including their financial incentives for purchasing and owning electric vehicles, we should be able to move much faster.

Faster reductions of emissions from petrol and diesel-powered vehicles needed. We also consider that the CCC’s proposed target of 105 grams CO2 per km for vehicles entering New Zealand from 2028 on, is far too slow. Since the CCC report was issued, the Government has proposed that this date be moved to 2025, but we still consider this to be far too slow.

Japan reached this standard in 2014 and Europe in 2020. We therefore recommend that the CCC makes a strong case to the Government for moving to this emissions level for vehicles entering the country from 2022 on, except in the case of existing purchase contracts which cannot be easily changed, which would be accepted into the country until the end of 2022.

Actions re trains, ships, heavy trucks and planes could be improved. Moving to a decarbonised rail system makes a lot of sense. Under the Transport Licensing Act 1931, which was repealed in 1982, freight being sent over more than certain specified distances was required to be sent by rail. Following the repeal, a substantial amount of freight moved from rail to road carriers.

If we rapidly completed electrification of all major rail routes, it would make very good sense to move again in this direction. Emissions from fossil fuel-powered trucks would be significantly reduced, and truck traffic on main highways would also fall off substantially. We recommend that, once electrification of the train system is completed between any two major cities, the necessary steps be taken so that significant masses of goods need to be sent by train rather than by fossil fuel-powered trucks.

Carbon charge needs to apply to fuel used for planes and ships travelling overseas. This does not seem to be covered in the CCC draft advice report, but we recommend that the CCC ask the government to take action on this regarding fuel supplied in New Zealand, and also to raise the matter internationally with the aim of getting international agreement that this should happen in every country.

SUPPORT SOME OF THE ACTIONS, BUT MORE NEEDED

@1. The way our electricity market currently operates needs urgent attention. (This does not seem to be covered in the CCC draft advice report.) The market currently operates by paying all electricity providers in a region, who are feeding into the grid, with the same price as the highest bidding provider whose power is accepted into the grid over a given half hour period. In the North Island, this provider is often the Huntly Power Station.

The outcome is that, by keeping Huntly Power Station as a grid provider, electricity prices paid by consumers are pushed up, other electricity providers make increased profits, and fossil fuel-powered generation is incentivised, while renewable generation is disincentivised. As a consequence, around 10 consented windfarms remain undeveloped, including the mothballed Hauauru Ma Raki wind farm in the hills behind Huntly, that could alone generate up to half the electricity that Huntly Power Station does, and provide many local jobs.

It is absolutely critical that the way the electricity market currently functions be rapidly changed, so that: (i) electricity generated from renewable resources gets precedence in entering the market, regardless of price, and (ii) electricity providers are required to make bids which reflect their generating costs, and the grid price is based on the average price providers are charging, not on the highest price. The use of the Huntly power station would then immediately fall towards backup status, power prices to consumers would fall, and there would be a strong incentive to develop further renewably powered generating options.

@2. Domestic pricing of electricity needs to be reduced relative to business pricing: Further to the above, since electricity market “reforms” were introduced around 34 years ago, while electricity prices paid by businesses have not changed greatly, electricity prices paid by domestic consumers have approximately doubled. To make electricity a stronger choice for domestic consumers we also need to change how the pricing in the distribution system works, so that domestic prices fall back to a more equitable level.

@3. Obstructions to local electricity generation needs to be removed: Increasing numbers of people, businesses and communities are investing in solar panels and in other ways of generating electricity renewably. There have also been some moves to install small local grids so as to use the electricity more effectively. This is excellent because it is increasing the proportion of our overall electricity coming from renewable resources. But when they generate surplus power, if they are able to sell it back at all, they may get only a very small fraction of what the supplier is charging domestic users. This problem also needs to be addressed so as to give generating entities the ability to sell surplus power back into the grid at a reasonable price.

@4. Reliability of electricity supply needs to be addressed: With increasing reliance on electricity to provide power and heat, we need to have a reliable supply. The CCC draft advice report does not seem to mention tidal energy in this context, which is a more reliable energy source than solar, wind or hydro. In 2008, a consent was granted for a 200 Mw tidal plant in the Kaipara Harbour and also for a trial turbine in Cook Strait, where tidal flows reportedly have the potential to meet all of New Zealand’s electricity needs, but both projects were abandoned, probably because of uncertainties about the electricity market. Steps to encourage the development of tidal power would be useful in helping to provide a reliable electricity system.

@5. Much faster reduction needed on emissions from process heat: The CCC draft advice report, p114-115 says one of the steps to reduce emissions from process heat will be to introduce measures to reduce emissions from boilers, which it says were around 4 Mt CO2e in 2018, by 1.4 Mt CO2e below this level by 2030 – a 35% reduction, and by 2 Mt CO2e by 2035 – a 50% reduction”. Both these proposed reductions are way below the reduction in coal emissions of around 67% below 2010 levels by 2030, which the IPCC said in its 2018 report is necessary to hold global warming within the 1.5°C threshold.

The move away from coal has so far been extremely slow because for many entities it remains the cheapest energy source. For example, dairy processing company Fonterra, New Zealand’s second largest coal user, has taken some small steps to investigate the use of wood-based fuels, and says it is going to electrify its small Stirling plant in South Otago. These steps have so far had very little effect on its total emissions. If carbon prices were rising rapidly towards the cost of the damage caused by the emissions, which the IPCC says is at least NZ $137 / tonne CO2e (see elsewhere in submission for more information), and were expected to keep rising well beyond that, we would be seeing much faster action.

In some cases, process heat from fossil fuels can be replaced with energy from wood pellets, other biomass, or in a few cases geothermal heat. The remaining cases will presumably need to move to the use of electricity.

We recommend that steps be taken immediately to increase the generating capacity of our electricity network so that by 2025 there is sufficient capacity to support process heat users who need to move to electricity, as well as the increasing number of electrically powered cars and other vehicles. We further recommend that there be strong incentives or actual requirements for these process heat users to make the transition by the end of the 2025 year, provided the required electricity generating capacity is in place by that time, if they are moving to that energy source. In the short term, existing fossil fuel-fired equipment could perhaps be left in place as a backup, in case there were any periods when sufficient electricity was not available, but otherwise not used.

SUPPORT SOME OF THE ACTIONS BUT MORE NEEDED

Agriculture is responsible for a very large part of our total emissions, particularly those relating to biogenic methane. The CCC draft report makes some useful suggestions, but the reduction proposed in methane emissions is not very ambitious. Our understanding is that there are ways of proceeding faster than this, which is what we recommend.

SUPPORT SOME OF THE ACTIONS:

The re-establishment of large areas of native forest makes sense, both from the point of view of carbon capture and of re-establishing living areas for native species.

However, our primary thrust needs to be in reducing our actual emissions, rather than off-setting these through forest restoration. The reason for this is that carbon capture in forests will not necessarily always be a successful long-term option. For example, with a warming planet, forests are becoming more likely to be destroyed by fire, rising temperatures could cause these existing species to die back, and some time in the future a re-forested area could end up being cleared again.

While we support re-establishment of native forest areas, we recommend that the resulting carbon capture and storage is not used as a reason for taking significantly less action in reducing our actual emissions.

SUPPORT SOME OF THE ACTIONS:
Re-cycling and re-use of items also has big potential to reduce waste.
When milk in New Zealand came in glass bottles, these would typically be re-used up to around 100 times. But when widespread home delivery of milk started to come to an end, supermarkets were apparently not interested in being involved in collecting glass bottles to return for re-use. Milk moved to cardboard cartons in 1989 and later to single use plastic containers.
In earlier times, glass soft drink and beer bottles for many brands were also re-used, though we have no data on how many times per bottle this typically happened. Again, we understand that, as time moved on, a lot of outlets preferred not be involved in returning these for re-use. In all these cases, the amount of energy required to collect and clean the bottles was almost certainly far less than the energy require to make new bottles.
Plastic containers can also be re-used. For example, in some parts of Canada they were being used for milk, and were typically being re-used up to around 200 times. Again, this probably saves substantial amounts of energy, and it also reduces the quantity of hydrocarbons needed to supply the plastic. Other plastic packaging could also be re-used multiple times, for example, plastic yoghurt and similar containers, and the plastic trays and containers often used in retail outlets to support meat, fruit and vegetable offerings.
We recommend that an assessment be made for how New Zealand could move rapidly to a system where we have: (i) standard sizes of plastic or glass milk, drink and other containers which are required to be used by all major suppliers of such products, and are required to be collected and returned by retail outlets; and (ii) standard sizes of plastic trays and other plastic containers which are also required to be returned and re-used. The assessment also needs to investigate the effect this would have on the amount of plastic waste we currently generate, and the resulting reduction in emissions of CO2 from degrading plastic waste that would be achieved.

SUPPORT SOME OF THE ACTIONS BUT DO NOT CONSIDER THE APPROACH IS NEARLY STRONG ENOUGH:

@ As covered elsewhere, we very strongly recommend that the ETS revert from being an auction system to being a system where the emissions price is set for the coming period, and ideally indicative prices are also given for future periods, going out several years. This will make the whole ETS operation a lot simpler and more transparent, reduce administration and compliance costs, and make it much clearer to businesses and other entities what steps they need to take to reduce emissions, and when it will make sense to take them for financial reasons.

@ Also, as covered elsewhere, we very strongly recommend that the major part of the revenue from emissions charges be recycled back to the public via a citizen’s dividend. We consider this will be necessary to make the higher emissions charges we urgently need both workable and politically acceptable. In the short term, some of this revenue can also be used to assist businesses and other entities in moving away from fossil fuel use.

@ Industrial allocations need to be rapidly removed, particularly in the case of products being sold domestically. Instead, to allow local suppliers to compete on the domestic market, we recommend that a carbon tax be imposed on imported products from countries in which the emission charges are significantly lower than ours.

@ Allowing “banked” ETS units to be held, and then used later when unit prices are higher, under-mines the whole purpose of the ETS. We recommend moving to a system under which ETS unit prices are set for the coming period, and units purchased back in time at lower prices cannot be used to meet current emissions requirements, but can be sold back at the price originally paid for them. (Units supplied to forestry operations for carbon capture and storage in trees would probably need to be treated differently from the above.)

@ The ETS emissions charges given in the CCC draft advice report are not nearly high enough. For example, on p131 it talks about “a trajectory that allows for prices of at least $140 in 2030”. But first, the IPCC 2018 report says that the damage cost from emissions is more that US$100 / tonne CO2e – more than approx. NZ$135 / tonne CO2e at current exchange rates. It is totally counter-productive to subsidise emitters by charging them less than this amount, so emissions charges need to be rapidly raised to this level. And second, the IPCC 2018 report also says that by 2030 carbon prices will need to be in the range of US$135-$5,500 / tonne CO2e – around NZ$185-$7,500 based on current exchange rates. Based on this information, we need to be aiming for prices well above $185 by 2030.

SUPPORT SOME OR ALL OF THE ACTIONS:

Rules for measuring progress seem to be reasonably sensible.

DO NOT SUPPORT ALL PROPOSED STEPS

@1. Fully support the Commission’s assessment of country’s NDC: It is totally appropriate that the Commission decided that the Nationally Determined Contribution our Government submitted under the Paris Agreement on 5 October 2016 and amended on 22 April 2020, in relation to our 2030 emissions, was not compatible with global efforts (p 19). The commitment was presented as reducing our greenhouse gas emissions by 30% below 2005 levels by 2030. What was never made clear when the NDC was presented, is that it was based on comparing gross emissions in the base year with net emissions in the target year. On a consistent net-net basis (based on 2015 data – the most recent data available when the NDC issue became clear), this was actually an undertaking to increase net emissions by around 7% over 2005 levels by 2030 – an appallingly weak target.

@2. Do not support the Commission’s NDC recommendation: Rather than just leaving the state of our NDC up to political decision, our view is that the Commission should present to the government, and to the public, a proposed revised version of our NDC that, for reasons covered elsewhere, goes well beyond just meeting the emissions reductions laid out in the 2018 IPCC report as necessary to hold global warming to 1.5°C.

@3. Change the way we define our NDC’s and other emissions-related data: The CCC draft advice report (p 151) refers to the gross-net accounting approach previously used for our NDC and for expressing some of the other targets that our government has set. This involves comparing gross emissions in the base year with net emissions in the target year. It gives some support to this, saying it is “a legitimate internationally agreed approach”.

This comparing apples with oranges approach, presented in the past by our Government without it being made clear, is extremely misleading. This has been pointed out by the previous Commissioner for the Environment, Dr Jan Wright, in her final report published in 2018, and by others. It is also not a standard way for countries to present this data. (In the past, under the Kyoto Protocol which came into force in 1997, the effects of forestry operations on emissions were only allowed to be taken into account post 1990, so under Protocol rules 1990 gross and net emissions were treated as being the same. This meant that, at that time, targets based on 1990 emissions were often effectively given on a gross-net basis. This is way back in time now, so it does not provide any support for continuing with the confusing gross-net method of presenting emissions reductions.)

To keep things clear and understandable, we need to immediately stop obfuscating important information by presenting emissions targets and reduction data on a gross versus net basis, and instead use net-net comparisons, or possibly in some specific cases gross-gross comparisons, where the derivation of the information is clearly specified. To present important information in any way other than clearly and rationally is not compatible with good democratic process.

SOMEWHAT SUPPORT

Support continuing to define our NDC on the basis of all greenhouse gases. While this is what other countries are doing, it makes sense for us to do the same. When our government submits a new NDC (which it very urgently needs to do) for clarity it also needs to provide additional information regarding the reduction it plans to achieve in long lived gases, and in biogenic methane, to achieve our NDC. We also recommend very strongly that the NDC be defined in a consistent basis – net-net is the most obvious choice – and that the definition from now on always be clearly stated.

Support contributions beyond meeting our NDC. Given we are a developed country with lots of expertise, we should certainly be assisting other countries in reducing emissions. It also makes excellent sense for New Zealand to take an active part in pushing for mitigation measures for international aviation and shipping. For example, carbon charges for these activities need to rapidly rise to cover the damage cost of the emissions produced, and need to continue rising to meet the pricing the IPCC has concluded will be necessary by 2030 to control emissions and remain on track to meet the Paris target.

SOMEWHAT SUPPORT

The use of international carbon markets to assist in meeting our NDC needs to be a last resort. We need to take responsibility for reducing our own emissions, and not rely on the international carbon market except in really exceptional circumstances.

The government also needs to report annually on our emissions versus budget and on emissions pricing. Annual reports on how the government plans to meet the NDC are important, but we also need to know how we have progressed so far. This requires having annual budget figures that can be compared with actual emissions. The government, or the CCC if it has the authority, also needs to indicate, or to prescribe, what emissions charges can be expected to be in effect over the coming several years. This is a key way of making it clear to businesses and other entities what actions they need to take to reduce their emissions, and when making these changes will become economically advantageous.

The government must clearly communicate any matters re possible purchasing of off-shore mitigation. We regard this as a last resort option that we should only take in extremely exceptional circumstances. Should these arise, the government needs to make it totally clear why it is considering or taking this option, what level of off-shore mitigation it proposes to accept, and how it will manage any related fiscal risks.

SOMEWHAT SUPPORT ASSESSMENT:

The Climate Change Response Amendment Act (2019) sets targets for New Zealand of a 24-47% reduction in biogenic methane emissions below 2017 levels by 2050. The CCC assessment (CCC draft advice report p 180) that biogenic methane emissions could need to be reduced between 49% and 60% below 2017 levels by 2100 is potentially a very major challenge.

Whether a methane vaccine or inhibitor will be able to reduce methane emissions by more than 50% remains to be seen. This seems like a very high level to achieve. However, we also understand that methane emissions are likely to be reducible by breeding cattle with lower emissions, as well as through the use of feed supplements.

Also, while New Zealand beef cattle numbers have reduced from 4.59 million in 1990 to 3.80 million in 2018, over the same period dairy cattle numbers have increased from 3.44 million to 6.44 million, taking total cattle numbers up around 28%, from 8.03 million to 10.24 million. Some studies have shown that these higher cattle numbers do not always add to farm profitability, and may actually subtract from it. If an economic case could be made for farmers to reduce artificial fertiliser use, and return to lower stock numbers and more sustainable farming methods, this would be a good way of moving forward.