Alex McManis | Climate Change and Energy Fellow
The last few years have been a busy time for climate politics in New Zealand, with the government introducing several high-profile laws aimed at rapidly reducing greenhouse gas emissions. However, while recent policy changes are important steps towards reducing greenhouse gas emissions, there are still serious gaps in New Zealand’s climate policies.
Recent climate policy developments stem from the complex makeup of New Zealand’s government. The Labour Party, led by Jacinta Ardern, came to power in 2017 after striking a coalition agreement with New Zealand First, a more conservative minor party, and a confidence and supply deal with the Greens. That deal saw the Greens secure a number of outer-ministry positions, including the climate portfolio.
The Greens have scored several key political victories over the past three years, most prominently passing the Zero Carbon Act 2019, which enshrined in law net-zero emissions targets for most greenhouse gasses by 2050. The Act, spearheaded by Climate Minister and Greens Co-Leader James Shaw, passed the parliament in November 2019 with support from all four of New Zealand’s major political parties, after almost a year of negotiations. This included the centre-right National Party, who grudgingly supported the bill while promising to amend it if they win this year’s election.
All parties seemed to agree that some framework, albeit an imperfect one, was necessary to provide regulatory certainty and begin tackling climate change. New Zealand’s Emissions Trading Scheme (ETS) was also strengthened in June, with changes designed to introduce an emissions cap and stabilise emissions unit prices.
However, despite these successes New Zealand’s recently updated nationally determined commitment under the Paris Agreement did not pledge more ambitious 2030 targets, instead sticking with the 30 per cent reduction set by the previous National Party government. It is also unclear whether New Zealand will even meet that reduction target. There are two interconnected factors that help explain this.
Policy Design
In 2018, 48 per cent of New Zealand’s greenhouse gas emissions came from agriculture, the largest contribution of any sector. The sector’s emissions have also grown 15 per cent since 1990. However, like many countries including Australia, New Zealand’s emissions reductions policies have consistently excluded the agricultural sector. New Zealand’s ETS does not require companies to use the emissions units to offset “biological emissions produced by agricultural activities” and is not expected to incorporate agricultural emissions until 2025. Similarly, the Zero Carbon Act exempts biogenic methane, a potent greenhouse gas commonly produced in agricultural processes, from the net-zero targets, instead aiming for a more modest 24 per cent to 47 per cent reduction from 2017 levels by 2050. Given the huge contribution of agriculture to New Zealand’s emissions profile, any failure to regulate agricultural emissions significantly limits how much New Zealand can reduce its emissions.
This special treatment is largely attributable to the strength of New Zealand’s farming lobby. The agricultural sector is a powerful voting block in elections, courted by parties across the political spectrum. The fact Shaw felt the need to explicitly clarify that the Greens are not an anti-farming party is a telling indicator of this. But additionally, the farming lobby in New Zealand has a long history of effective, high-level campaigning against ambitious climate policies, especially the ETS. The twelve-year delay in introducing agriculture to the ETS is largely attributable to the effects of industry lobbying.
Electoral politics
In an unusual way, New Zealand’s climate debate is a victim of its own success. Where for most countries changing electricity sources is the key way to reduce their greenhouse gas emissions, New Zealand already generates approximately 80 per cent of its electricity from renewables. In order to make further significant dents in its emissions it needs to tackle more politically controversial areas such as transport, construction and agriculture.
The decisions of New Zealand’s political parties are strongly influenced by what they believe the electorate will find palatable. While climate politics is nowhere near as divisive in New Zealand as in Australia or the United States, three-year electoral cycles breed short-term thinking as parties never have long before the next elections. This pushes necessary long-term, controversial climate polices off the agenda.
Election 2020
September’s election is shaping up to be crucial for climate politics in New Zealand. Key environmental reports are due after the election. The COP26 climate conference, delayed until 2021 due t0 the COVID-19 pandemic, also takes place during the next parliamentary term. Labour is on track for a large parliamentary majority, buoyed by Ardern’s extraordinary popularity. Majority government would give Labour a freer hand to shape climate policy. For example, it is possible that they could revisit post-COVID recovery spending, after New Zealand First restricted the portion of “green” spending in the recent emergency budget, although Labour has been notably vague about its post-election climate policy proposals.
However, Labour’s ascendancy might spell disaster for the Greens, who are currently hovering between 4.5 per cent and 7 per cent support in the polls. This puts them at risk of missing the 5 per cent threshold needed to guarantee representation in parliament. As the election draws closer, New Zealand First and the Greens have begun taking swipes at each other for their respective idealism and lethargy on environmental issues, attempting to differentiate themselves from Labour. The climate debate is only likely to heat up further before any stronger policies are implemented.
Alex McManis is the Climate Change and Energy Fellow for Young Australians in International Affairs.