Annual Review Debate — Climate Change

Thank you, Mr Chair. As the Environment Committee chair, I’ll just take you through some of the main points made in the Climate Change Commission’s annual review. The commission’s total revenue for the 2023-24 year was $18.56 million and total expenditure was $20.38 million, resulting in a deficit of $1.82 million. One of the commission’s statutory deliverables is to review the 2050 emissions reduction targets every five years. The current 2050 target reflects Parliament’s judgment of how much New Zealand should reduce its emissions to contribute to global efforts to limit warming to 1.5 degrees Celsius. To achieve this, there are targets such as Nationally Determined Contributions and emissions reduction targets.

The commission emphasised that it is in New Zealand’s interest to reduce emissions. We heard that this is particularly so for the energy sector, where new technologies are already available, so that New Zealand can move towards being more energy independent. The commission told us that 80 percent of the markets New Zealand exports to by value have either got or are planning to require that emissions levels are disclosed. The commission said that accessing affluent markets is really important for New Zealand, because although there may be demand for New Zealand products, other countries may not be able to afford to buy them at the cost incurred to produce them. So we heard that adaptation to climate change is also about creating products and services that the world will value in the future.

According to the Government projections, the national sheep flock is declining, and that was alluded to during the annual review process, and the commission said that it is likely that that will continue. But the forecast for dairy cows is different. The commission said that emerging technologies will enable dairying to continue, while reducing the amount of biogenic methane emissions. The commission’s modelling suggests that a 35 percent reduction in biogenic methane emissions can be achieved, with no loss to dairy protein production.

Those were some of the main points that were touched on, as well as transport policy, heavy vehicles, industrial allocation, forestry offsets, and agricultural emissions pricing—and I’ll let the Minister of Climate Change talk to that. Thank you.

Thank you very much, Mr Chair. I acknowledge the Environment Committee chair—Catherine Wedd—and the Environment Committee for their great work and contribution on what is a very important topic. I thought it would be helpful to offer some opening remarks before we get into some questions, just to remind those that are watching in terms of the work that is under way by this Government in regards to climate change. I want to make it very clear from the outset that as a Government we are committed to meeting out climate change goals while driving economic growth. We’re determined to meet our targets in a way that unlocks innovation, creates jobs, and also ensures that our businesses remain competitive.

I want to remind those of some of the key milestones which have been achieved so far, and also a bit of an outline of some of the work ahead. Last year, within the term of the review, I released this Government’s climate change strategy. This document provides a clear pathway for New Zealand in order to reduce its emissions and also, importantly, as we heard from the select committee chair, to adapt to the impacts of climate change. It is absolutely the reality that New Zealand is already dealing with the impacts of climate change. This year, which is obviously not part of the scope of the review, but it is important that we’re now moving into implementation, the strategy that we released focuses on clean energy, boosting innovation, and supercharging sustainable investment, while also ensuring our communities are well prepared for a changing climate.

New Zealand already has a very strong foundation to do this. We have abundant renewable energy potential, world-class innovators—particularly those within the agri sector—and one of the world’s most mature emissions trading schemes. We also released our second emissions reduction plan: a blueprint for reducing emissions for the second half of this decade. That is important because we do need a clear, robust, and practical plan in order to meet our targets. A plan that’s focused on actions in key sectors, including agriculture, transport, energy, waste, as well as the New Zealand emissions trading scheme and sustainable finance. Some of the key policies included within that are through enabling more renewable energy projects through Electrify New Zealand, recognising carbon capture utilisation and storage through the emissions trading scheme, targeting a network of 10,000 electrical vehicle charging points by 2030—and you would have seen more updates in regards to that recently—exploring partnerships between the private sector and Government in order to plant more trees on Crown land, and leveraging the Waste Minimisation Fund to enable resource recovery systems and infrastructure to process organic waste.

Our plan that we have released ensures and shows that we can have affordable and secure clean energy, we can have an efficient and competitive agricultural sector, and we can also have a booming economy while meeting our climate targets. With these policies, we are on track to meet New Zealand’s first and second emissions budget and could reach net zero as early as 2044. The Government is committed to our climate targets, and this includes the first Nationally Determined Contribution, NDC1.

During this term, the Government has delivered specific action, consistent with our commitment. Specifically, delivering the climate strategy, delivering reduced New Zealand units to the emissions trading scheme auction through auction settings in 2024, and delivering the second emissions reduction plan. In partnership with industry, this Government is increasing and has increased funding to accelerate the development of tools to reduce agricultural emissions. Consistent with the Government’s market-led approach, New Zealand businesses are leading in undertaking material levels of decarbonisation; for example, Genesis has committed to materially reduce and potentially eliminate coal from Huntly and replace it with torrefied biomass by 2028. We have also seen other initiatives through the primary sector to incentivise emissions reduction by the sector, which is important for farmers to reduce emissions overall.

We acknowledge that over the time, the gap between our projected domestic emissions and the NDC1 has reduced. When the NDC1 commitment was increased in 2021, the gap between our domestic emissions and the NDC1 was in the region of 149 million tonnes of CO2. If you now use projections from last year, and including the impact of policies that this Government has put in place and update the data based on the latest data available, the projections—[Time expired]

Thank you, Mr Chair. I rise to take a call on behalf of the Green Party, and I’m really looking forward to interrogating the actions that this Government has done within the first review period. It was heartening to hear the Minister of Climate Change refer to the Government’s commitment to climate change, but, quite sadly, the rhetoric doesn’t match the reality of the situation. This Government has slashed and burned its way through the previous Government’s climate programme, leading to some very deep and very serious cuts in the climate change response. I’m going to concentrate my remarks in the area of transport and waste, and my colleague Scott will follow on and ask some questions around energy and agriculture within the review period.

It’s interesting that the Government mentions how committed they are. I’d like to start by asking questions about the independent advice that the Government received in April 2024 from the Climate Change Commission. Does the Minister agree with the Climate Change Commission that offshore mitigation should only be used in force majeure cases, that it should not be used domestically? Does the Minister agree with the commission that achieving emissions budgets will require “further electrification of light transport including [further] phase out of light internal combustion engine (ICE) vehicle imports … low carbon fuel alternatives and reductions in vehicle kilometres travelled … [and] increasing rates of active and public transport in urban areas.”? And if the Minister agrees, why has the Government pursued policies in total contravention of this?

One of the first things that the Government did when they came into office—and I wasn’t even a member of Parliament then—in December last year was repeal the Clean Car Discount under urgency, and also weaken the Clean Car Standards a few months later. Now, the cumulative effect of that, according to some independent modelling by Concept Consulting, is that by 2050, the impact of repealing these policies could have added up to 9.8 megatonnes of carbon equivalent avoided. Now, just for context, the current emissions profile of New Zealand in net terms is about 56 megatonnes. So we could have reduced one sixth of our current emissions just by keeping the Clean Car Discount and not weakening the Clean Car Standard as this Government did when they first came in.

One of the other things they did around the transport area which was regressive and deeply unhelpful was the general policy statement—a draft was released in March 2024 and finalised in June 2024. Now, according to analysis by Greater Auckland, the Minister ignored widespread concerns that these actions would actually decrease the amount of mode shift going to active transport and public transport, and overly prioritise road transport. So my question is: as the Minister of Climate Change, was he concerned by the general policy statement that came out, and does he agree with the officials who raised objections around the potential for these to actually decelerate the mode shift that was already happening?

I’ll turn my attention to the waste area because I only have a minute and a half left. We’ve seen the work that this Government has done. They’ve weakened the waste levy by reducing the de-hypothecation of it and making the funds available for landfill remediation and not just waste minimisation—worthy causes, but it should be funded by a separate pool. They’ve cancelled waste diversion policies such as kerbside organic collection and recycling. My question around the waste area is: to what extent have the changes in the waste levy shown up in the modelling, and what detrimental impact has that had towards this Government achieving emissions budget targets?

This is technically outside the review period, but since the Minister referred to it, I’ll also ask a question about it: to what extent did the changes in the second emissions reduction plan, including the improved projections of achieving the net target earlier, rely on methodological changes, and to what extent do those rely on assumptions about increased forestry? Thank you.

Climate change is an inescapable reality. No matter how much some might like to escape it and might pretend it isn’t happening, no matter how much some on the Government benches might prefer to pretend it isn’t happening, no matter how much some businesses might prefer it’s not happening, it is happening to us. It’s a huge obligation that we need to admit.

It was gratifying to hear that the Government is committed to its climate change goals while getting economic growth, but it turns out that in the last year, New Zealand has dropped seven places to 41st in the global Climate Change Performance Index, which ranks countries based on their emissions, on their deployment of renewable electricity, on their overall energy use, and climate policy. Seven places down to number 41. In that context, how is it possible for the Minister of Climate Change to sit in the chair and say that they’re committed to action on climate change?

What exactly are the climate goals that this Government is committed to? We heard a series of tactics from the Minister, a series of actions that they might take, but what actually is the climate goal of this Government? Will the Minister state that this Government is absolutely committed to meeting the Paris Agreement? Will the Government state that it is absolutely committed to meeting the emissions budgets set out by the independent Climate Change Commission? Will it commit to ensuring that we have a just and equitable transition through climate change? Will it commit to ensuring that New Zealanders are equitably enabled to adapt to climate change? Could the Minister please state his commitments to climate change?

I’m very happy to reinforce some of the points I noted in the opening statements, and I refer again to the Government’s strategy on responding to a change in climate—the Government’s climate strategy—and the headline there, as it states: “The Government will meet its targets to reduce the impact of climate change and prepare for its future effects.” As I noted previously in my contribution, the Government is also committed in regards to the targets, including its nationally determined commitment targets.

This Government has taken a number of steps in the period in which it has been in Government to put in place mechanisms in order to achieve its emissions reductions target. The question before raised waste minimisation, and that is a whole chapter in the emissions reduction plan that has been released by Government that outlines the mechanism and the processes for us to reduce emissions in that space. It is an important sector with plenty of opportunities to do that.

There was also a question in regards to methodology changes and assumptions. I think everyone will understand and be aware that forecasting involves assumptions and underlying changes. The prior Government made assumptions in regards to a number of aspects of policy, including such things as Tīwai Point and its utilisation of energy, or the role in which Huntly was going to play in the future. This Government has a different view on that, and those are examples of changes that have been reflected in the modelling.

I come back to the point: the plan that this Government is pursuing and this plan that the Government is implementing does put us on track in order to achieve net zero earlier than 2050—as early as 2044. Taking away the politics, we should celebrate the fact that this is a country that is on track, and we do need to undertake and make gross emissions reductions, in addition to using forestry as a removal tool. We’re committed to both of those mechanisms; they’re both critically important and it is also reflective, ensuring that we have a credible emissions trading scheme (ETS) to do the heavy lifting in regards to emissions reduction in this country.

This Government has spent a huge amount of effort in terms of ensuring we have a credible ETS and a credible policy position. Again, the actions speak louder than words in terms of the actions that this Government has undertaken on that pathway, and we do have a plan in order to meet our targets.

Just before I take the next call, I’ll just warn members that the debate will be completing at about 5.55 p.m. Just because members have times left in their party, that doesn’t mean the debate will go past 5.55 p.m.

In light of what the Minister of Climate Change has just said, can the Minister then unequivocally say that his Government is committed to meeting the Paris Agreement? Not the nationally determined contributions, not the tactics, not the strategy. Is the Government unequivocally committed to achieving the Paris Agreement?

Thank you, Mr Chair. I have some questions about the short-, medium-, and long-term actions the Government has been taking on climate change over the period from November 2023 to June 2024. I am mindful that just about everything that the Government has been doing has been making things worse—from cutting the Clean Car Discount and opening up oil and gas and chanting the mantra of “growth” as if, once we’ve trashed this planet, we can all hitch a ride with Elon Musk to Mars and start over.

Last week, at the Antarctica Parliamentary Group meeting, we heard from Antarctica New Zealand about the global impacts of ice loss from Antarctica, in particular when the Thwaites Glacier gives way—and it is known as the Doomsday Glacier—it will raise the sea level by 0.8 metres, and it’ll trigger more ice loss from Antarctica—up to 4 metres of sea-level rise. This is something that is not really survivable for most societies, and it’s easy to despair, but we have it within our power to change this, because every fraction of a degree matters.

I want to know, from the Minister of Climate Change, where the Government is going to make up the 2 million tons of carbon, emitted out to 2050, that the Clean Car Discount was going to abate from, noting that the Clean Car Discount programme was fiscally neutral in the last six months of 2023. As we heard about the 10,000 fast chargers, I’d like to know how many had been funded and installed.

I also want to know what the emissions impact had been from the decision to cut funding from active transport—walking and cycling paths—in half at last year’s Budget. What’s the climate cost of entrenching fossil-fuel transport?

When flooding overwhelmed Civil Defence in Ōtepoti Dunedin in 2006, I rode across paddocks to rescue sheep that were drowning. Those flood events have happened on a regular basis ever since. We’ve had repeat after repeat after repeat. Homeowners have lost insurance. We risk climate ghettos. The South Dunedin Future programme has created a model for collaborative community leadership on adaptation, and it’s got exceptional buy-in from the community. But the Government—in a kick in the guts for the South—rejected an application from the Dunedin City Council and the Otago Regional Council for $132.5 million to support a buy-out of flood-prone properties to help that community—the most densely inhabited, the most at risk from climate change, the most impoverished community in Aotearoa—to help that with that adaptation effort, with the millions that have been invested so far. That was rejected. What other support has the Government provided for the South Dunedin Future programme over that period, if any? And, with the gutting of the Climate Emergency Response Fund in May 2024, what alternative complementary funding was the Minister able to provide for climate change - related initiatives outside of the main Budget allowances, if any?

I’m also interested in the more general actions the Government may have taken over this period. What immediate actions has the Government engaged in that are more visible and simple to evaluate, such as brokering partnerships with housing in flood-hazard zones to foster innovation and adaptive housing, like developing climate-safe housing? I can refer the Minister to this report from the National Science Challenge called Our City, Our Climate, a report dealing with how the community feels about adapting to those climate impacts.

I’m also interested in what the Minister might have to say on the other complementary programmes, such as the Warmer Kiwi Homes’ investment in home upgrades. Has the Minister paid attention to reports such as Aukaha’s Houses into Homes evaluation report on the home energy retrofit project, which has a recommendation in there that we need to resource solutions for whare beyond scope? Their recommendation is that, because there are houses that are being invested in by Government in flood-prone areas, that money is being wasted.

Thank you, Mr Chairman. I just have some quick questions for the Minister of Climate Change. I do remind the Minister that he hasn’t answered my colleague the Hon Dr Deborah Russell’s question about whether or not this Government is committed to the Paris Agreement, and whether that is a commitment that they will be adhering to.

My questions are around industrial process heat that was covered off in the work of the climate commission, and also in various Environment Committee questions that have been put there. One of the things that we know in terms of reaching our emissions budget is that it is heavily dependent on the fact that New Zealand Steel is performing better than first anticipated in terms of the emissions reduction that that conversion is incurring.

What I want to know from the Minister is: what work is under way to further accelerate industrial conversions away from fossil fuels, and how the Minister is tracking that; what initiatives are being put in place, and what mechanisms to track conversions that are happening? We know the Government’s withdrawing support by scrapping the Government Decarbonising Industry Fund scheme, but what have they replaced it with in terms of monitoring there? And whether or not the Minister is doing any work around industrial allocations, which in many ways has the perverse incentive of paying people to pollute and subsidising people to continue to emit, while at the same time objecting to partnering with businesses when they are reducing our emissions and reducing the burden on New Zealanders.

Thank you, Mr Chair. A few questions from me about coal. One is: does the Minister of Climate Change realise that coal is a fossil fuel and not good for the climate? If so, why has this Government enabled coal mining through its Fast-track Approvals Act, which includes the Bathurst Resources Limited project and BT Mining Limited? Does he agree with the then Climate Change Commission chair, who presented in front of the Environment Committee, that those who promote fossil fuels are committing, “a crime against humanity”?

If he doesn’t have anything to say on coal today or to answer the other questions that have been put to him today, will he revoke the decision from his party’s members and other Government members on the Environment Committee to halve his time in his appearance at the Environment Committee?

Sorry, members, I’m just conscious of time so I do want to be able to provide answers to the questions that have been raised. To directly answer the point noted by the Hon Megan Woods in the context of this Government’s commitments: I mean, I would remind the member that, actually, the commitments under the Paris Agreement include the nationally determined contribution, NDC, of which I’ve now said on three occasions that as a Government we are committed to meeting, and that was again reinforced as part of the Biennial Transparency Report submission that the Government has recently made, and other obligations in regards to that. As a Government, we are continuing to fulfil our obligations in regard to that commitment and we are committed to our targets and committing to undertaking the work in regard to that.

I want to answer the point also raised by the member in regard to South Dunedin. I think that is a very important aspect, and whether it’s South Dunedin or Tairāwhiti or Auckland or Westport, many parts of our country are impacted by climate change, and it is important, as the member knows, that we move and have a position in regard to a framework to deal with the impacts of climate change.

We did a cross-party consensus through an inquiry, and I acknowledge the members in the House who have actively participated on that. That is an important piece of work which this Government strongly supports, and we are working quickly to introduce legislation by the end of this year to support an enduring national adaptation framework which deals with the questions of: how do you share the costs, who pays, making sure that our citizens have the information and data to make informed decisions around where they buy and where they build and also dealing with citizens that don’t have any choice in terms of where they are and the impacts that they are dealing with and how they can transition to a different state.

They are very important questions for our communities, and they are important for, I think, the majority, if not all, in this House to come up with the answers. We are committed to working together with other members of the House to get resolution to that matter.

In the context of living in a global community, we know that many of our trading agreements contain commitments to continuing to meet our climate and environmental goals. But given that our position in the world adaptation Climate Change Performance Index has dropped, has the Minister of Climate Change assessed whether any of our trade agreements are likely to be at risk because we are not meeting our climate goals?

I’d just like to return to the question of the different departments, the different ministries, that are working on programmes that might be impacted by climate. In relation to the Energy Efficiency and Conservation Authority, which funds the Warmer Kiwi Homes programme, we know that this programme really does help people in energy hardship, and it has great effect. But what we’ve also discovered is that many homes are actually beyond repair or are in areas which will be impacted in the future. So what work has the Government been doing on checking whether programmes are suitable and are futureproofed?

We have a recommendation here from the Otago home energy report that says that a proportion of whare are in such poor condition that energy-efficient upgrades to the existing structure are largely ineffective and may actually extend hardship at high cost. Some whare are exposed to flooding or sea-level rise and have a limited lifespan. In these cases, investment is needed and solutions need to be developed in collaboration with whānau and community in examples of new builds, climate-safe housing, etc. Has the Minister of Climate Change been working across Government and with the community sector to look at this? Thank you.

Members, the time for this debate has expired. The question is, That the report of the Finance and Expenditure Committee on the annual financial statements of the Government for the 2023/24 financial year be noted.

Motion agreed to.

Report noted.

The question now is, That the reports of committees on annual reviews be noted.

Motion agreed to.

Reports of committees on annual reviews noted.

The question now is, That clauses 1 to 9 and Schedules 1 to 3 be agreed to.

Clauses 1 to 9 and Schedules 1 to 3 agreed to.

Bill to be reported without amendment.

House resumed.

Madam Speaker, the committee has considered the Appropriation (2023/24 Confirmation and Validation) Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

This bill is set down for third reading immediately.