New Zealand needs to speed up emissions reduction
New Zealand needs to speed up emissions reduction in order to be a fast follower
05 Mar 2008
The report argues that more needs to be done to reduce New Zealand’s emissions in order to position New Zealand to operate successfully in what will likely be a low emissions global economy.
The Institute’s last report recommended that New Zealand adopt a fast follower strategy with respect to emissions reduction, initially aiming to reduce its domestic emissions to their 1990 level by 2020 and then to 30% below the 1990level by 2050.
Although some of the subsequent public commentary suggested that this strategy was not sufficiently ambitious, this report notes that halting New Zealand’s strong emissions growth and then reducing emissions to the proposed level will be a challenging process. Indeed, the various actions announced to date are insufficient to position New Zealand to be a fast follower.
New Zealand Institute chief executive Dr David Skilling notes that “A key theme in this report is that New Zealand’s climate change debate needs to be more fact-based”. Commitments such as the government’s carbon neutrality aspiration or the National Party’s ’50 by 50’ target should be assessed in terms of the actions proposed to achieve them rather than simply on the ambition of the target.
The report estimates that the recently announced policies, such as a comprehensive emissions trading scheme (ETS), energy efficiency measures, and an emphasis on renewable energy, will only reduce New Zealand’s domestic emissions to about their 1990 level by 2050. These announced policies are a step in the right direction, but they are not sufficient to move New Zealand to a low emissions mode of operating. This relatively limited impact reflects the limited abatement opportunities available to New Zealand.
Although it is reasonable to assume that technology will emerge over time to allow for reduced emissions, New Zealand needs to ensure that it is positioned to adopt these technologies as they become available (e.g. by committing to adopt international standards as they are upgraded). Increased investment in public transport and communications technology also seems appropriate.
However, there is a limit to the contribution of measures to improve the emissions efficiency of the New Zealand economy. The report argues that New Zealand also needs to develop less emissions intensive sources of economic growth. Indeed, if much of New Zealand’s economic growth continues to come from emissions intensive sectors, it will be difficult to achieve significant emissions reductions. Altering the composition of the New Zealand economy towards low emissions activities has the potential to have a significant impact on New Zealand’s emissions.
Economic transformation should be seen as central to New Zealand’s policy response to climate change. New Zealand should look to develop strengths in the ‘weightless economy’, an area that is both suited to a small, remote economy and has low emissions. Policies to achieve this, such as investing in research, education, and world-class communications infrastructure, are as important to climate change policy as emissions pricing. So far, this has not been a focus of much attention.
New Zealand also needs to manage its exposure to changes in consumer sentiment as well as government action with respect to emissions levels. It can do this by investing more significantly behind its clean green brand, to ensure that New Zealand continues to be well-regarded in international markets with respect to its environmental record. New Zealand has progress to make in this area. And New Zealand should continue to advance its interests in international negotiations by negotiating appropriate treatment for the agriculture and forestry sectors. In this context, continuing to make public claims about world-leadership and carbon neutrality may make it difficult to negotiate favourable terms.
Much of the public debate in New Zealand on responding to climate change has been focused on the aspiration rather than on the materiality of the actions required to deliver the required level of emissions reduction. It is now important to shift the New Zealand climate change debate towards a clear focus on the actions required.
To manage New Zealand’s exposure to climate change will require more serious action than has been seen to date. The government’s announced policy initiatives get New Zealand to the starting line, but more remains to be done. David Skilling notes that “New Zealand is not acting in a sufficiently serious way to position itself to compete in a low emissions world”.
New Zealand needs to move from being a slow follower to a fast follower, and do so quickly. Actions speak louder than words.
The Institute’s previous releases on climate change are available on the Institute’s website at http://www.nzinstitute.org