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Better late than never? Climate Change Response (Zero Carbon) Amendment Bill introduced to Parliament

May 09, 2019


Partners Gerald Lanning, Sally McKechnie
Senior Associates Joanna Lim

Climate change (inc Zero Carbon Bill and Emissions Trading Scheme) Government reform and public policy

Climate Change Minister James Shaw introduced the Climate Change Response (Zero Carbon) Amendment Bill (the Bill) to Parliament yesterday. It arrived later than expected, requiring extensive behind the scenes work to get a high level of cross-party consensus essential for the longevity of legislation of this nature. 

It proposes to set legally binding emissions targets in place, and was described by Prime Minister Jacinda Ardern as a “landmark” piece of legislation. There has already been political and sector comment.

In this FYI, we briefly summarise the key points and early reaction to its proposals. Our follow up FYI, next week, will look at specific sector impacts.

What the Bill does

  1. Implements a framework for actions for New Zealand’s contribution to ensuring no more than 1.5 degrees Celsius of global warming above pre-industrial levels.

  2. Commits the Government to reducing New Zealand’s long-lived greenhouse gas emissions to net zero by 2050 (which will likely involve offsets such as forestry), and biogenic methane (ie agricultural) emissions by 10% of 2017 levels by 2030. There will be a further reduction range of between 24% and 47% of 2017 levels by 2050. However, this range is subject to a review by the Climate Change Commission in 2024 that will consider any future scientific developments.

  3. Establishes an Independent Climate Change Commission, which will be made up of seven members. It will give independent advice on what action needs to be taken and when.

  4. Legally binds the Government into planning for adaption to the increasingly severe weather events that New Zealand is experiencing due to climate change.

How it will enforce targets

The main enforcement mechanism is envisioned to be the Emissions Trading Scheme. However, clause 5ZJ(2) of the Bill states that “[i]f the 2050 target or an emissions budget is not met, a court may make a declaration to that effect, together with an award of costs.”

Effect on New Zealand Industries

The biogenic methane reduction targets are significant, as New Zealand’s agriculture industry contributes 48.1% of damaging emissions, 35% of which is biogenic methane. Agriculture is "incredibly important to New Zealand", Ms Ardern said, but also must be "part of the solution".

A Beef and Lamb New Zealand spokesperson said that the methane reduction targets make unfair demands on farmers. “It’s unreasonable to ask farmers to be cooling the climate, as the Government’s proposed targets would do, without expecting the rest of the economy to also do the same.”.

Other Party support

National Party leader Simon Bridges said his party supports the structure of the Bill, but has reservations about the methane targets. "While we have found common ground on the Commission's form and function, the net-zero target for long lived gases, and the separate treatment of methane, we have serious reservations about the expected rate of reduction for methane".

NZ First leader Winston Peters has welcomed the Bill. He said, "[w]e will listen very closely to, and work with, the agriculture sector about their preferences… [i]n negotiations, New Zealand First sought to balance the interests of the agricultural sector and the need for the Government to take strong action and show leadership on climate change. We paid careful attention to, and respected, the weight of officials' advice around a methane target.”

ACT will oppose the Zero Carbon Bill.

The Future of the Bill

Ministry for the Environment expects the Bill to go to the Select Committee in the second half of 2019, and the amended Act to come into force in late 2019. 

Given there has already been significant cross-party consultation, any movement in the policy of the Bill may be limited. No doubt there will be strong pressure from the agriculture industry however. That pressure will be met by opposition from the environmental lobby, who will want to hold the government to account and likely push for stronger accountability provisions. 

We suspect that the Emissions Trading Scheme reforms yet to be seen in detail will be an essential part of the picture when evaluating this Bill for agriculture in particular, to see how the Zero Carbon Bill targets translate into obligations to surrender emission units and whether there will be some level of transitional subsidisation put in place immediately.

The Bill can be accessed here.

Please get in touch with any of our contacts to discuss how the Bill could affect your sector or for assistance with preparing a submission.