The Commission's Challenge to NZ – how realistic and what do we think?

The He Pou a Rangi’s, Climate Change Commission (CCC), Draft Advice published on 31 January 2021, proposes preliminary emissions budgets and direction of policy to achieve the targets agreed to under the Zero Carbon Act through to 2035. 

Does the advice have the priorities and scale of change right? Which aspects of the advice would benefit from further exploration?  Is there other information that could benefit New Zealand in its decision making? 

This Ignite article explores these questions and shares some insights, accolades, and observations from the Beca team as we explore the Draft Advice. If you need help preparing your own response, please get in touch with us here. 

The CCC Draft Advice – A Snapshot

The CCC was tasked with providing the Government advice on the level of the first three five-yearly emissions budgets that will put New Zealand on track to meeting its domestic 2030 and 2050 emissions targets and the direction of policy that should be included in the Government’s first emissions reduction plan.

The advice presents budgets for three periods which equate to emissions reductions compared to 2018 levels as follows:

• 2022 – 2025:      2%
• 2026 – 2030:      17%
• 2031 – 2035:      36%

The policy recommendations are categorised by sector, with a strong focus on:

• transport
• heat, industry and power
• land (agriculture and forestry)
• waste.

The CCC report concludes that a 2050 net zero carbon target is technically achievable taking into account what is economically affordable and socially acceptable.
 

The Accolades

While the sector categorisation is useful, Beca applaud the CCC for their identification of the need for integrated cross-sector change that focuses on changing how we do things not just what we do. For example, it highlights the importance of changing the way we build and plan our towns and cities alongside the way people and products move around, as this supports reducing carbon by changing people’s behaviour not solely by replacing the systems and products we consume.

We strongly support the principles proposed in the CCC advice, of focusing on reducing or eliminating emissions at the source rather than relying on mitigation of emissions – e.g. through tools such as offsets on relieving the symptoms rather than addressing the cause.. We agree with the Commission’s warning that a heavy reliance on forestry (for offsets) before 2050 would make maintaining net-zero emissions beyond 2050 difficult. Our experience has led us to the same conclusions as presented in the Draft Advice: that a broader focus on renewable energy rather than renewable electricity will provide the highest decarbonisation return on investment; and regarding the scale of transformation proposed for the transport and heat, industry and power sectors, i.e. to remove almost all emissions by 2050 by largely eliminating fossil fuels and calling an end to coal.

We also welcome the approaches taken in the CCC advice regarding social implications of the transitions. The advice indicates that Te Ao Māori has been a central point to the overall approach to developing budgets and pathways. We consider this approach is both supportive of good outcomes (recognising that the wai, the whenua, the tangata and the air are all integrally linked) and as it is important to ensuring climate-related policies do not compound historic Treaty grievances. We recognise the important commentary in the CCC advice regarding social challenges that might arise in the transformation programme. For example, the Draft Advice proposes that  the issue of job losses in the coal mining and oil and gas sectors could be addressed through application of these skills in other sectors and new industries: such as the circular economy and the development of new energies such as biofuels and hydrogen.
 

Observations

While we welcome the advice and support many of the Draft Advice findings, there are some key elements we will be thinking about as we explore the proposals in greater depth. 

Five-yearly emissions budgets considerations:  

In addition to proposing preliminary five-yearly budgets that align with the targets of the Zero Carbon Act, the Commissioners were asked to review our Nationally Determined Contribution (NDC) under the Paris agreement. Their analysis found that "the Government's commitment¹ ...is not compatible with global efforts" and that "if Aotearoa is to play its part as a developed nation, the NDC would need to be strengthened²."

In December a report commissioned by the Ministry for the Environment (MfE) – A safe operating space for New Zealand/Aotearoa was released. This report translates five³ of the Planetary Boundaries – scientifically determined global environmental limits including for carbon dioxide – to national budgets for New Zealand. The report emphasises the importance of rapid, near-term decarbonisation in meeting the goal of limiting global heating to 1.5°C. The MfE report presents several methods to translate global science-based CO₂ budgets to set national targets for cumulative emissions from 2020 - 2050. The five-yearly emissions budgets proposed by the CCC would allow New Zealanders to use up a 30-year budget proposed in the MfE report by 2029.

In summary, while the five-yearly budgets proposed in the advice provide a strong indication of the scale and direction of change, we anticipate that these may need to be strengthened for New Zealand to continue to support global efforts to limit warming to 1.5^oC.

While this conclusion may seem daunting in the face of already ambitious budgets, our expertise suggests that New Zealand can address this readily with sufficient will. One of the first steps in identifying the low hanging fruit to enable a rapid transition will be to comprehensively tabulate the amount and type of energy used across New Zealand. This should form the basis of the development of a comprehensive and integrated national energy strategy as proposed by the Commission. Beca's long tenure in New Zealand and our broad experience and connectivity across key energy sectors gives us a unique perspective on the challenge, and on the opportunity. We are thrilled to be in the position to help map out and deliver on an energy transition that enables us to meet our emissions targets while ensuring affordable, sustainable energy is available to New Zealanders.

Policy considerations:

Chapter 6 of the Draft Advice lists the sector specific policies and ‘necessary actions’ to meet the proposed five-yearly budgets. Based on our technical expertise, we agree with the high-level conclusions of the report that the budgets are technically achievable via economically affordable and socially acceptable pathways. We also support many of the proposed policies and actions. It will be important that the proposed transitions are informed by as substantive assumptions as reasonably practical. A considered review of these assumptions (and the connectivity between different assumptions) will be a key area of focus as we read the Draft Advice in further detail and seek to identify opportunities to support the transitions proposed. For example:

• Transport: The transport transition focuses rightly on integrated land-use and transport planning and electrification of vehicles which aligns strongly with our views on a transportation transition. However, the transition also assumes a significant uptake of low emission fuels such as biodiesel. The broader implications (i.e. beyond carbon) of this, such as feedstock availability, land-use and water consumption, need careful consideration for this and other assumptions to avoid impact shifting, and to identify areas for integrated solutions with broad co-benefits.
• Heat, industry and power: This transition indicates a large reliance on solid biomass to replace coal or natural gas-based heat. While biomass is a lower emission fuel source, factors such as the impacts and feasibility of transporting biomass to sites that are not close to a source need to be considered.
• Waste: For waste pathways we strongly agree with the headline goal of diverting organic waste from landfill. This presents opportunities to use the organic waste productively, for example to make renewable natural gas. Throughout our review we will be looking to support the CCC to make clear recommendations on how such opportunities can be progressed practically.
• Decarbonising the economy: Key principle number 2 - Focus on Decarbonising the Economy - includes specific reference to the need to decarbonise New Zealand’s industries rather than reducing production in a way that could increase emissions offshore. This is a very important consideration that New Zealand must keep in mind as we consider national decarbonisation opportunities. Our focus must be on reducing emissions, not relocating them.
• Social: The social commentary on job losses and new opportunities is an important first step; we think it will also be important in transitions such as these that factors such as geographic implications of the transformation programme and the professional support that will need to be considered to enable such shifts.
   

Going forward

The high-level conclusion of the Draft Advice recommends that transformational and lasting change across society and the economy will be needed. Beca strongly supports this focus and with our strong legacy in New Zealand and our breadth of expertise, we are well positioned to bring such transitions to life, supporting New Zealand to meet and therefore achieve these emissions reductions, and further emissions reductions through to our net-zero 2050 goal. We agree with the Commission's approach of pursuing cross-sector initiatives as we know this will be fundamental to enabling systemic solutions and changing the ways we operate, as will their approach of taking a braod view that considers technical, economic and social implications and is centred around Te Ao Māori.

We are excited by the opportunity to further explore the transformations set out in the Draft Advice. As we do so we will share some of our insights through a series of thought pieces that provide additional commentary into the proposed transitions.

Providing support to our clients is what we do. If you would like our support in preparing your submission, please get in touch with one of our experts.
 

¹ to reduce net emissions by an average of 30% from 2005 emissions levels over the 2021-2030 period.
² to reflect emission reductions of much more than 35% below 2005 levels by 2030.
³ Climate change, land-system change, freshwater use, biogeochemical cycles (nitrogen and phosphorus use) and biosphere integrity (related to biodiversity).