New advice from the Climate Change Commission highlights New Zealand’s main climate policy tool is broken and at risk of collapse without urgent action to cut gross emissions.

Recent extreme weather events, strengthened by climate change, have put into focus how important it is for the Government to take measurable action to cut emissions. We want a stable environment for our wildlife and people.

Forest & Bird says the Government’s own climate policy rollbacks have undermined the Emissions Trading Scheme (ETS), with new advice from the Climate Change Commission showing the carbon market is losing credibility and is no longer driving emissions reductions.

The Commission’s advice on NZ ETS unit limits and price control settings for 2027–2031 paints a stark picture of a market suffering from a loss of confidence. “The Climate Change Commission has highlighted what many have been warning for some time: the Government’s recent climate policy rollbacks, from agriculture to transport, have eroded confidence in the ETS,” says Scott Burnett, climate spokesperson for Forest & Bird.

“The Government has repeatedly said the ETS is its primary tool for cutting emissions, but its own decisions have made the system increasingly unworkable. The storms are getting stronger. Depending on a broken system is not good enough.”

The Commission’s analysis shows the ETS could stop functioning as a meaningful emissions reduction tool within the next decade.

As early as the mid2030s, there may be no further units available for auction. Once auctioning stops, the Commission warns, the Government loses its main lever for driving emissions reductions through the ETS.

“The current trajectory of the ETS is a slowmotion failure,” says Mr Burnett. “Relying on exotic pine plantations as a substitute for cutting pollution is nothing more than a bandaid. We cannot plant our way out of the climate crisis.”

“Cutting emissions at the source is the most responsible response to climate change, and it requires political leadership. If nature can’t vote, then New Zealanders must elect leaders who will protect it.”

Forest & Bird says the Government has options that would better protect people and nature, if it chooses to act.

“By investing in rapid decarbonisation of transport, agriculture, and industry – alongside genuine naturebased solutions like wetland restoration – we can reduce emissions while restoring the natural systems that New Zealanders depend on,” Mr Burnett says.

Forest & Bird agrees with the Climate Change Commission’s explicit recommendation that the Government take stronger action on climate change outside the ETS.

“Our natural world is the foundation of our economy,” says Mr Burnett. “The Commission has given the Government a clear warning that its current strategy is not working. Ignoring that advice is a choice – and nature and future generations will pay the price.”

Notes

He Pou a Rangi Climate Change Commission is required under the Climate Change Response Act 2002 to provide advice on NZ ETS unit limits and price control settings. Its April 2026 advice covers the period 2027–2031.

The Commission's full report is available on their website.

All four government NZU auctions in 2025 failed to clear, with secondary market prices remaining below the floor price. 6 million unsold units were permanently withdrawn from the market following the December 2025 auction.

The Government confirmed in October 2025 that it would no longer pursue any pricing on agricultural emissions, a sector responsible for over half of New Zealand’s total greenhouse gas emissions profile.

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