Yesterday the Government launched its consultation on the design of the Zero Carbon Bill. The discussion document covers key aspects of the Bill, including how ambitious the emissions reduction target should be.
The consultation period will run to 19 July.
Three options are offered, all to be achieved by 2050 and all based on a "net zero" future (i.e. allowing forestry sequestration to offset emissions to reach zero). They are, in order of ascending ambition:
- net zero carbon dioxide
- net zero long-lived gases (CO2 and nitrous oxide) and stabilised short-lived gases (methane), often called the 'Two Baskets' approach, or
- net zero emissions.
A carbon only approach would largely remove agriculture.
Modelling for the Ministry for the Environment estimates the emissions prices for the different targets at $109 per tonne of CO2 equivalent (tCO2–e), $243 and $272 respectively. We are told that these results should be read with care as it is impossible to accurately predict changes in technology and the economy out to 2050.
The Government is also seeking comment on the process used to set the target. The options are:
- setting the target in the legislation at the outset, or
- setting a goal of net zero emissions by 2050 and await advice from the Climate Change Commission on the specific target for the government to set later.
Other questions are:
- whether New Zealand should meet its targets through net domestic emissions reductions, or whether emitters should also be able to buy international carbon units from overseas jurisdictions with strong environmental safeguards, and
- whether the Zero Carbon Act should allow the target to be revised if circumstances change.
These are the stepping stones to achievement of the target, and set the quantity of emissions allowed within a specific timeframe. Design choices include the length of each budget, how far ahead they should be set and whether they should be able to be revised.
The Government's preferred approach is that three budgets of five years each would be set, providing a planning horizon of 15 years, and that the furthest budget into the future – which would be the third of the series – should be capable of revision by the government.
The Government would also like flexibility to allow banking or borrowing from one emissions budget to the next, once a specified threshold has been met.
Climate Change Commission
As indicated, the Government intends to establish an independent Climate Change Commission, which is proposed to have an advisory and monitoring role under the Bill (broadly aligning with the UK position). The Government has stopped short of endorsing formal decision-making powers for the Commission, although specific accountability mechanisms are envisaged.
Under the Government's proposal, the Climate Change Commission would:
- advise on the level and composition of emissions budgets, and monitor progress towards achieving those budgets
- provide independent expert advice on areas of the economy to focus on in achieving emissions budgets
- provide advice on the appropriate 2050 target level, and periodically monitor this
- monitor progress towards addressing risks from climate change, and
- advise on the extent to which international emissions reductions should be used towards New Zealand's targets.
To ensure accountability, and to strengthen the impact of the Commission's advice and recommendations, the government would have the following obligations:
- issuing a public report responding to any advice from the Commission, and explaining any departure from such advice, and
- providing a public response to any monitoring reports released by the Commission, within a defined timeframe. This proposal picks up on a potential weakness in the UK model which does not set mandatory response timeframes, and would prevent the government 'dragging its feet' on any responses to the Commission's monitoring reports.
The Government is also seeking feedback on the Climate Change Commission's potential role in the NZ Emissions Trading Scheme. Again, this role could be advisory only (e.g., providing recommendations on unit supply in the ETS, as endorsed by the Productivity Commission).
Alternatively, the Commission could take on stronger decision-making functions within the ETS, including on the level of units supplied into the scheme. The Government has not yet endorsed a position.
The Zero Carbon Bill will also include provisions for adaptation to climate change impacts that can no longer be avoided. Proposed measures include:
- undertaking a national climate change risk assessment
- preparing a national adaptation plan
- regular review of progress towards implementing the national adaptation plan, and
- an adaptation reporting power.
Why get involved?
The discussion document comes as part of a flurry of climate change related consultation and engagement. However, once enacted the Zero Carbon Bill will drive all other policy decision-making and directions, assuming broad political consensus can be reached.
Accordingly, the decisions made in relation to the Zero Carbon Bill are likely to be enduring. Robust feedback at this stage will ensure those settings are clear and workable.
The information in this article is for informative purposes only and should not be relied on as legal advice. Please contact Chapman Tripp for advice tailored to your situation.