Government and climate change
The Government is taking active steps to move New Zealand towards lower greenhouse gas emissions and greater resilience to a changing climate. These include domestic and international reduction targets, an Emissions Trading Scheme, Climate Change Commission and joint action plan with the primary sector.
What drives New Zealand’s climate change programme?
The Paris Agreement is the new global agreement, taking effect from 2020, where participating countries voluntarily commit to act on climate change. Its purpose is to:
- Keep the increase in global average temperature well below 2°C above pre-industrial levels, while pursuing efforts to limit the temperature increase to 1.5°C
- Strengthen the ability of countries to deal with the impacts of climate change
- Make sure that financial flows support the development of low-carbon and climate-resilient economies.
New Zealand ratified the Paris Agreement in 2016, which committed us to:
- Setting and regularly updating an emissions reduction target (also known as a ‘Nationally Determined Contribution’ or NDC)
- Continuing to report on our emissions and on progress towards meeting our target
- Planning for adaptation to a changing climate
- Continuing to provide financial support to assist developing countries' mitigation and adaptation efforts.
Our framework on climate change is shaped by these international obligations, as well as a key piece of legislation—the Climate Change Response (Zero Carbon) Amendment Act 2019 (also known as the Zero Carbon Amendment Act).
The Zero Carbon Amendment Act
The Zero Carbon Amendment Act provides a framework around which New Zealand can develop and implement clear and stable climate change policies that:
- Contribute to the global effort under the Paris Agreement
- Allow New Zealand to prepare for, and adapt to, the effects of climate change.
The Act puts in place four key things:
- New long-term domestic greenhouse gas reduction targets
- A system of emissions ‘budgets’ to act as stepping stones towards the long-term targets
- Requirements for the Government to develop and implement policies for climate change adaptation and mitigation
- Establishment of an independent Climate Change Commission to provide expert advice and monitoring to help keep successive governments on track to meeting long-term goals.
For more information on the Zero Carbon Amendment Act, see the Ministry for the Environment website.
What are New Zealand’s greenhouse gas reduction commitments?
New Zealand’s commitment under the Paris Agreement is to reduce emissions by 30% below 2005 levels by 2030. This target is reviewed every five years, with the next review taking place in 2020.
New Zealand's long-term domestic greenhouse gas reduction targets are:
- Net emissions of carbon dioxide and nitrous oxide are to reduce to zero by 2050
- Methane is to reduce to 10% below 2017 levels by 2030, and 24-47% below 2017 levels by 2050.
These long-term targets are embedded in the Zero Carbon Amendment Act and recognise the different impacts of each greenhouse gas, reflected in the separate target for biogenic methane emissions.
For more information on New Zealand’s greenhouse gas reduction targets, see the Ministry for the Environment website.
What is the New Zealand Emissions Trading Scheme?
The New Zealand Emissions Trading Scheme (NZ ETS) is the Government's main tool for reducing greenhouse gas emissions.
The NZ ETS puts a price on greenhouse gas emissions, creating a financial incentive for businesses to reduce their emissions and landowners to earn money by planting forests that absorb carbon dioxide as the trees grow.
One emission unit, known as the New Zealand Unit or ‘NZU’, represents one metric tonne of carbon dioxide or carbon dioxide equivalent (i.e. the amount of another greenhouse gas that causes as much warming as one metric tonne of carbon dioxide). The Government provides NZUs to eligible foresters for carbon dioxide that is absorbed by their trees. The foresters can then sell these NZUs on the NZ ETS market. Emitters (businesses with legal ‘surrender obligations’) must purchase enough NZUs to cover their emissions. These NZUs are then surrendered to the Government. It's up to the emitter to decide whether they reduce their emissions or purchase NZUs. The price the emitter pays for NZUs (also known as the carbon price) is set by supply and demand.
All sectors of the New Zealand economy must report on their annual greenhouse gas emissions, including agriculture. However, the agriculture sector doesn't have surrender obligations, meaning just under half of New Zealand's greenhouse gas emissions are not covered by the NZ ETS.
Note that the NZ ETS is being modified to improve its ability to drive emissions reductions. Proposed changes are intended to provide the Government with the tools to manage the supply of units into the scheme, make it simpler to participate, and encourage foresters to participate in the scheme.
For more information on the NZ ETS, see the Ministry for the Environment website or the Ministry for Primary Industries website. You can also watch this video explaining the NZ ETS produced by the Ministry for the Environment. If you’re interested in finding out more about forestry in the ETS, see the On-farm forestry topic page.
Joint action plan on primary sector emissions (He Waka Eke Noa)
Government, industry and iwi/Māori are working together in an innovative partnership, He Waka Eke Noa, that will equip farmers and growers to report, manage and reduce agricultural greenhouse gas emissions (being methane and nitrous oxide), and adapt to a changing climate.
The Interim Climate Change Committee (ICCC) found that agricultural greenhouse gas emissions should be priced (see the ICCC's final report and technical appendices for its agriculture inquiry). The Food and Fibre Leaders Forum proposed an alternative partnership-based approach to reducing agricultural greenhouse gas emisisons, ‘He Waka Eke Noa: Our Future in Our Hands—the Primary Sector Climate Change Commitment’.
In October 2019, the Government agreed to work in partnership with industry and Iwi/Māori to design a practical and cost effective system for reducing emissions at the farm level by 2025.
The five year joint action plan includes:
- Improved tools for estimating and benchmarking emissions on farms
- Integrated farm plans that include a climate module
- Investment in research, development and commercialisation
- Increased farm advisory capacity and capability
- Recognising early adopters
- Recognising on-farm mitigation such as small plantings, riparian areas and natural cover.
The partnership is working towards all farmers and growers:
- Including the mitigation of greenhouse gas emissions and adaptation to climate change in their farm business and environment plans by 2025
- Calculating their greenhouse gas emissions sources and sinks and being incentivised to take actions on climate change through the development of an appropriate pricing mechanism for emissions by 2025.
The He Waka Eke Noa partners are: Apiculture NZ, Beef + Lamb NZ, DairyNZ, DCANZ, Deer Industry NZ, Federation of Māori Authorities, Federated Farmers, Foundation for Arable Research, Horticulture NZ, Irrigation NZ, Meat Industry Association, Ministry for Primary Industries and Ministry for the Environment.
A Steering Group has been set up and work is underway to deliver on the above commitments.
Initial milestones have been identified for farm emissions reporting and farm plans:
|Guidance provided to farmers on how to measure and manage greenhouse gas emissions through farm planning||1 January 2021|
|25% of all farms have their GHG emission figures||31 December 2021|
|25% of all farms have a written plan in place to measure and manage their greenhouse gas emissions||1 January 2022|
|100% of farms have their GHG emission figures||31 December 2022|
|A pilot of a farm-level accounting and reporting system has been completed across a range of farm types||1 January 2024|
|100% of farms using the accounting and reporting system to report their 2024 emissions||1 January 2025|
|100% of farms have a written plan in place to measure and manage their greenhouse gas emissions||1 January 2025|
In 2022, the Climate Change Commission will check progress. If commitments aren't being met, the Government can bring agricultural greenhouse gas emissions into the NZ ETS, with the point of obligation at the processor level, before 2025. If the farm-level pricing mechanism is not in place by 2025, agriculture will be brought into the NZ ETS at the processor level.
For more on He Waka Eke Noa and other Government and/or industry efforts on agriculture and climate change policy since 2018, see:
- An information page on the Ministry for the Environment website
- ‘He Waka Eke Noa—our future in our hands’, the primary sector climate change commitment signed by 11 sector organisations
- Action on Agricultural Emissions, final report by the ICCC released in July 2019
- Technical appendices to the ICCC report covering:
- Defining the entity for the point of obligation
- Calculating agricultural emissions
- Analysis of regulatory options against criteria
- Achieving differentiated (split-gas) 2050 emission targets
- Free allocation for agriculture
- Distributional impacts of agricultural climate change policy
- International context and the risk of emissions leakage
- Counting carbon sequestration by trees and vegetation on farms
- Government consultation on He Waka Eke Noa and the ICCC reports, carried out from July-August 2019
- Background research reports issued by the Biological Emissions Reference Group (BERG)—a government/industry group that operated from 2016-2018 to build evidence regarding opportunities to reduce greenhouse gas emissions from New Zealand agriculture, the costs and benefits of those opportunities and any barriers to their use.