Building a low-carbon future
Tēnā koutou, tēnā koutou, tēnā koutou katoa.
Ngā mihi o te ata.
Thank you, Stephen, for that kind introduction.
And thank you, again, to ASB for hosting us today.
I grew up in a big, old Victorian ‘character home’ in Aro Valley.
Like so many here in Wellington, it was beautiful, wood throughout, and in many ways unchanged since it was built in the late Nineteenth Century.
Little insulation, single glazing, windows that rattled in the wind, squarely facing the northerly gales.
The heating amounted to plug-in oil heaters.
And the insulation came in the form of a jumper or a blanket.
In the winter my breath condensed in the air while I was still in bed.
For some reason, all of us – apparently – need to spend a portion of our lives in a house like that as a right-of-passage in New Zealand.
Whether it’s the house you grew up in, flatted in at university, or indeed live in today.
We tend to shrug it off as part and parcel of how we do things – many things.
Such as the air quality in our cities.
The rubbish in our landfills.
The traffic on our roads.
The pollution in our waterways.
Of course, many of these problems should have been fixed already – for any number of very good reasons.
The climate crisis gives us a very good reason to finally get around to it.
Homes like the one I grew up in are surely among the least energy efficient in the developed world.
New green building standards will drive down the amount of power we use to heat them.
Making them warmer, dryer and healthier for the people that live in them.
And it’s the same story across the board: taking action on climate change comes with the very happy coincidence that it will also improve our lives and our livelihoods.
Today we’re going to talk about the upcoming Emissions Reduction Plan.
As you may have realised, there is a symmetry between this morning’s event and a speech I gave in July of last year, also here at ASB, also with many of you in the room.
I’m going to start today by revisiting some of what I said then, to create the context for the journey we’ve taken over the months since as we’ve set the Emissions Budgets and developed the strategy and content of the Emissions Reduction Plan.
I will tell you a wee bit about that too, of course.
And talk about what it will mean for our communities, and how tackling climate change will help build a future that is more equitable, more prosperous, and more innovative.
All within planetary limits.
In that speech I outlined five principles that would underpin our approach to developing the Emissions Reduction Plan:
First, our response, as it did with COVID-19, must start with the science.
The challenge ahead is as urgent and important as it has ever been.
The science tells us that limiting global warming to 1.5˚C above pre-industrial levels gives us the best chance of avoiding the worst effects.
As temperatures have already risen more than 1˚C, we must act now to prevent further atmospheric warming and the catastrophes that come with it.
Second, that in tackling climate change we will work with and alongside tangata whenua to manage the risks and take advantage of the opportunities for Māori and the Māori economy.
We have a rare opportunity now, to uphold the power of te ao Māori and indigenous knowledge to tackle the climate crisis.
Third, in tackling climate change we will undertake an economic transition that is equitable and fair, that takes everyone with us and leaves no one behind.
The transition must not further entrench the existing inequalities in our society – that would be unsustainable and a sure route to failure.
But if we actively seek to include those who are currently excluded, that offers the surest route to success.
Fourth, we will work with nature to tackle the climate crisis and, at the same time, the biodiversity crisis.
Global warming and biodiversity loss are two sides of the same coin.
Protecting and restoring our precious forests and wetlands and native species will help to limit global warming, improve wellbeing and adapt to the unavoidable impacts of climate change.
Fifth, and finally, that the challenge that confronts us, is also the single greatest opportunity that we’ve had, in at least a generation, to develop our economy into one that is much more productive, much more sustainable, and much more inclusive than the one we have today.
So what does that mean?
Well, for starters, it means new clean-tech industries and well-paid jobs.
It means warmer homes and lower household power bills.
It means less exposure to international fossil fuel prices and greater energy security at home.
It means fast, frequent and convenient buses and trains.
Safe walkways and cycle lanes through our cities.
Cars and trucks that are powered by New Zealand’s abundant wind and sun, at a fraction of the cost of imported fossil fuels.
It means creativity, innovation and investment in our collective future.
In the months since I delivered that last speech, and whilst we’ve been developing the content of the Plan, we have seen first-hand the impact that the climate crisis is already having on our communities.
Repeated flooding, on a massive scale, in Gisborne and Tairāwhiti.
Incredible storm damage, over and over again, in Westport and Buller.
And at the same time droughts in Southland so severe that the Awarua–Waituna wetlands caught fire – in autumn.
The climate crisis is no longer something that’s happening to someone else, somewhere else, at some point in the future.
It’s happening to us. It’s happening here. It’s happening now.
And the best thing that we can do to prevent it from getting any worse, is to rapidly cut the pollution that we’re putting into the atmosphere.
The Zero Carbon Act we passed in our first term in Government laid out a pathway over the next three decades to do exactly that.
Starting with the worldwide effort of keeping global warming to 1.5˚C, the new legislation sets long-term targets to 2050 and a set of emissions budgets to get us there.
The emissions budgets are a sinking lid on our emissions, the stepping stones by which we begin the next stage of our journey to net-zero.
The Emissions Reduction Plan is intended to then deliver on those budgets.
This framework was designed to give New Zealand a much-needed sense of certainty and predictability to future climate change policy.
To that end, the Climate Change Commission recommended that we hold a special Parliamentary debate on the first three emissions budgets, prior to the publication of the Emissions Reduction Plan itself.
This would allow each party to put its views on record and, at the same time, preserve each party’s ability to disagree on the policy prescription by which we collectively meet those emissions budgets.
After all, the first three emissions budgets take us through to 2035, which would span the life of several governments.
Our Government has accepted that recommendation and Parliament has agreed that the debate can happen this coming Thursday.
In advance of the debate, I am very pleased to be able to announce that, following consultation with other parties, Cabinet has now set the first three emissions budgets:
The first, from 2022 through to 2025, has been set at 290 megatonnes of carbon dioxide equivalent greenhouse gases.
This averages out at 72.4 megatonnes per year.
Which is two megatonnes per year less than the five year average leading up to this point and 3.1 megatonnes less than our projected emissions for 2022 to 2025[i].
Remember that there are only 42 months left of the first emissions budget period – it started on New Year’s Day this year.
So even that is going to be tight, given the time lag between a policy decision and its actual effect.
The second emissions budget, from 2026 to 2030, has been set – in principle – at 305 megatonnes, an average of 61 megatonnes per year.
That’s 13.4 megatonnes, nearly twenty percent[ii], per annum, below what we emitted from 2017 to 2021.
And the third emissions budget, from 2031 to 2035, has been set, again in principle, at 240 megatonnes, or 48 megatonnes per year, on average.
Which is 26.4 megatonnes a year, or about thirty-five per cent[iii], less than 2017 to ’21.
Now, the eagle-eyed amongst you will note that the first emissions budget, at 290 megatonnes, is exactly what the Commission recommended and two megatonnes less than we consulted on late last year.
Cabinet had proposed a slight variance to the Commission’s recommended emissions budgets, based on updated forestry intentions numbers.
There is considerable uncertainty around forestry projections and so, having reviewed the evidence, Cabinet chose to revert to the Commission’s recommended first emissions budget.
However, Cabinet has retained the modified second and third emissions budgets we consulted on late last year.
That’s why I say the second and third emissions budgets have been set, “in principle”.
The Commission will review the latest evidence and update their advice, in advance of Cabinet finalising the next emissions budget in 2024 and then the one after than in 2029.
That will take into account not just more recent and firmer forestry projections, but also uptake of new technology and scientific advances.
The nature and momentum of those changes, of course, will rely in large part on what we are able to achieve through our first Emissions Reduction Plan.
The actions taken by our Government over the last four and a half years have already lowered the future trajectory of Aotearoa New Zealand’s greenhouse gas emissions.
But not yet enough to put us on a path towards net-zero.
That is why the Emissions Reduction Plan is so important.
As a statutory instrument, the Plan requires the Government to act to reduce emissions right across all sectors the economy and to support all New Zealanders to make the most of the transition.
And while I can’t tell you today what’s in it, what I can say is that New Zealand’s first Emissions Reduction Plan – a plan to slash our emissions across every sector of the economy – will be released one week from today, on the morning of Monday the 16th of May.
Fifteen different Ministers, holding eighteen portfolios between them, are named as having responsibilities in the plan.
So, now… nearly every Minister is a Climate Change Minister.
They are supported by at least twenty departments, ministries, business units and agencies.
Not to mention all the Independent Crown Entities, Crown Research Institutes and organs of state this plan has implications for.
We are not aware of any other initiative, other than the Budget itself, which draws in such a large span of Government.
Of course, it is just a plan.
While it has taken a tremendous effort – endless briefings, reports and papers, and a frankly gargantuan amount of work from countless officials – it won’t implement itself!
The actions within must be undertaken, policies realized, strategies born out.
That will take ongoing, enduring effort and accountability.
Under the Climate Change Response Act, the Minister of Climate Change is responsible for the meeting our Emissions Budgets and our 2050 target.
But success will depend on the combined efforts of the three fifths of the Executive who are directly responsible for at least some part of it.
Therefore the Prime Minister will continue to Chair the Climate Emergency Response Group of Ministers who have overall governance and oversight of the emissions budgets and the Plan.
For the last four years or so, coordination of climate change policy across Government has been the responsibility of an ad hoc Climate Change Chief Executives Board.
That is now being formalised into a fully-fledged Interdepartmental Executive Board under the Public Service Act 2020.
It will have its own secretariat and the ability to directly commission work.
That Board will report up to the Climate Emergency Response Group of Ministers.
The agency Chief Executives who make up the Board will have individual accountability for ensuring their agency delivers on their part of the plan.
But they will also have collective responsibility for ensuring we stay on track to meeting our overall emissions budgets and the 2050 target.
Now, I know what you’re thinking. And you’re right.
Plans don’t just need accountability and oversight, they need resourcing.
In the Half-Yearly Fiscal Update last December, the Minister of Finance revealed that our Government is establishing a multi-year Climate Emergency Response Fund, paid for with proceeds from the Emissions Trading Scheme.
I’m anticipating at the end of this speech, some of the journalists here will try, in time honoured fashion, to get me to reveal how we’re going to spend it.
I will pre-empt them now, in time honoured fashion, by referring to the number of sleeps remaining until we can all have the answer – which is seven.
Next Monday morning, when we outline the detail of the Emissions Reduction Plan, the Minister of Finance will also outline the first investments from the Climate Emergency Response Fund – funding that will go towards the first round of initiatives within the Plan.
Now, as the saying goes, “Just because you made a good plan, doesn’t mean that’s what’s gonna happen.”
So Climate Change Chief Executives Board and the Group of Ministers will continue developing and implementing policy, monitoring success, and making mid-course corrections as needed.
That will include advice and decisions on subsequent tranches of funding from the Climate Emergency Response Fund in future Budget cycles.
This structure, leading all the way up to the Prime Minister, gives us our best chance of success.
So, the next couple of weeks are going to be quite a big deal for climate policy in Aotearoa New Zealand.
This Thursday will be the Parliamentary debate on the first three Emissions Budgets.
Next Monday will be the release of the Emissions Reduction Plan and the first tranche of initiatives funded under the Climate Emergency Response Fund.
And of course, next Thursday the Minister of Finance will publish Budget ’22.
On Friday, the Prime Minister and I announced that all 180 schools that still use coal boilers will have them replaced with renewable alternatives by 2025.
The very first question I was asked, in the very first interview I did on that announcement, was, “Why has this taken so long? Aren’t we in a climate emergency?”
Not so long ago, the very first question, in response to any announcement on climate change, would have been, “How much is this going to cost?”
Of course, the reason it’s taken Aotearoa so long to get started on serious climate action is because for decades we’ve thought about it as a sunk cost, rather than as an investment in our collective future.
Despite that, over the past four and a half years, our Government has;
- Passed the Zero Carbon Act through Parliament – unanimously;
- Established the Climate Change Commission;
- Ushered through major reforms to the ETS that have seen the price of pollution double – and then double again;
- Established the Climate Emergency Response Fund, paid for by the polluters themselves;
- Required default Kiwisaver funds to be fossil-fuel free;
- Become the first country in the world to require mandatory climate related risk reporting for listed companies and financial institutions;
- Banned new offshore fossil fuel exploration, started the New Energy Research Centre in Taranaki and kick-started the hydrogen economy in New Zealand;
- Banned new industrial coal boilers and put climate change back in the Resource Management Act;
- Set up New Zealand Green Investment Finance and the Government Investment in Decarbonising Industry Fund;
- Said that Government will lead by example and put the public sector on the path to carbon-neutrality by 2025;
- Started replacing all the old coal boilers in our schools, hospitals, universities, polytechs and defence facilities, with the State Sector Decarbonisation Fund;
- Brought in the Clean Vehicle Discount and vehicle emission standards, which have led to a 300% increase in the import of electric vehicles;
- Supported the roll-out of hundreds more EV charging stations all over the country – including the Interislander Ferry;
- Made major investments in public transport and rail infrastructure,
- We’ve built new cycleways and walkways and increased funding for Bikes in Schools;
- Insulated thousands more homes;
- Quadrupled our climate related aid commitment to the Pacific and other vulnerable nations;
We have done more over the past four and a half years than the combined efforts of Governments over the past several decades.
Is it enough? No, it isn’t. We’re just getting started.
Tackling climate change is a once in a generation opportunity to build a future that is more equitable, more prosperous, and more innovative – and all within planetary limits.
And the Emissions Reduction Plan will ensure that we do that in a way that benefits everyone.
Of course, the work is only just beginning – but the stage is, now, finally, well and truly set.
In particular, I would like to pay tribute to Vicky Robertson and everyone at Ministry for the Environment and all the many other agencies, for the incredible effort they have made to get us to this point.
But most of all, I want to say thank you.
The reason you are here in this room today is because you have been and remain a part of climate action in New Zealand.
In one way or another you have been a part of this story, you are a part of the Plan and, I hope, you will be a part of our onward journey to a net-zero Aotearoa.
Nō reira, tēnā koutou, tēnā koutou, tēnā koutou katoa.
|[i] Net target accounting emissions (AR5, Mt CO2e)|
|2015-2019 average annual emissions (5y)
The most recent five years of historical inventory emissions.
2017-2021 average annual emissions (5y)
|2022-2025 average annual emissions (4y)
Projected emissions over emissions budget period 1 with existing measures only.
[ii] 18.1 per cent
[iii] 35.5 per cent