A Progressive Agenda
Speech to the Climate Change + Business Conference, November 12, 2020
Tena koutou katoa
Thank you for inviting me to speak here today. It is great to see us all come together for a common cause: to redefine our future in the face of unprecedented times.
Covid-19 and climate change are two of the greatest challenges facing this generation. Both touch every corner of the world; affect just about every aspect of our lives; and threaten our country’s wellbeing and stability.
Like Covid, climate change is not a distant threat – it is already having affects worldwide.
According to the Ministry of the Environment’s Our Atmosphere and Climate report, New Zealand’s average temperatures are warming, sea level is rising and extreme weather events are becoming more frequent.
And nothing is out of its reach, from our physical and mental health to our ecosystems and economy.
While Covid-19 and climate change provide a shock to the system, they also provide us with an opportunity, a chance to reset our focus and build back better.
Do this right and we end up with a stronger, more profitable and more sustainable economy.
I believe we are a better country than we were three years ago. The adversity we have faced as a nation following the March 15 terrorist attacks and our response to Covid has drawn us together as a people. We already had high levels of social cohesion relative to most other countries and we were lucky to live in a peaceful and calm country with Covid under control – touch wood. Our responses have shown our interdependence and built even stronger cohesion in society.
We have a responsibility to act together in respect of climate change and other challenges like water and I am confident not just that we can but that we will.
We are on a journey towards a credible pathway to our 2050 domestic target, of net zero emissions for all gases except biogenic methane. Our target is set in law through the Climate Change Response Act. I believe that by the end of these three years we will be able to be confident that we are heading to net zero in carbon dioxide. We need durable long-term regulatory frameworks. We also need to prepare for and adapt to climate change risks.
We have an, all-of-government programme to get us on track across electricity, transport, industrial heat, agriculture, forestry, waste and our construction sector.
Our energy system, in particular, presents an opportunity to accelerate our Covid-19 economic recovery, while reaching our emissions targets. We are committed to pushing harder towards a more renewable, affordable and secure system.
Over the last three years, we have been busy getting a wide range of work underway.
This year, in response to the Covid-19 pandemic, we established the $50 billion Covid-19 Response and Recovery Fund to revitalise the economy by supporting regional and local projects that provide economic stimulus and create jobs.
$1.1 billion from Budget 2020 has been provided to Jobs for Nature, a programme across multiple government agencies, set up to create around 11,000 jobs, while improving freshwater, biosecurity and enhancing biodiversity.
More than $100 million of the Covid-19 Response and Recovery Fund was allocated to 29 projects in six regions to help protect areas from threats like erosion and flooding. These regions are Canterbury, Tairawhiti, Waikato, Hawke’s Bay, Manawatu-Whanganui and Wellington.
We passed the COVID-19 Recovery (Fast Track Consenting) Act to fast-track the consenting process for projects that boost our economic recovery, while continuing with RMA environmental precepts.
This is going well and in addition to the listed projects, I have begun making other referrals to the Expert Consenting Panel’s consideration.
We want to make big strides over the next three years in reducing waste and improving resource efficiency. We intend to set the direction, and put in place systems and infrastructure needed to better address our waste and resource recovery challenges. We want a step change, which many agree is overdue.
Sadly, much of what is currently sent to landfills could be recycled, composted or reused, so it is time for action.
The Government will make improvements to reduce household waste, standardise our kerbside recycling programmes and upgrade our waste processing infrastructure. Reducing the amount of waste sent to landfill will again help minimise our greenhouse gas emissions.
And we are confronting the modern-day challenge of plastics. We already banned plastic bags, and in the coming year we plan to take action on more single-use plastic items such as produce bags, tableware and cutlery and one that I have railed against for years, non-compostable fruit and produce stickers.
We will also look at banning difficult-to-recycle single-use plastics such as PVC and polystyrene packaging, and create a $50 million fund to research and develop alternatives.
I thank Eugenie Sage for her work on these issues this last term.
In the building and construction sector, we have introduced the Building for Climate Change programme to improve the operational efficiency of buildings, reduce carbon emissions across a building’s whole life cycle, and improve buildings' resilience to the impacts of climate change
We also delivered on our commitment to clean up our waterways by introducing new freshwater reforms, these are comprehensive and include a limit of 190 kilograms per hectare, per year, of synthetic nitrogen fertiliser on grazing land. This will in turn reduce nitrous oxide emissions from the agriculture sector, which helps New Zealand meet its climate change targets.
We will continue to work with the agriculture sector through the He Waka Eke Noa partnership – supporting our farmers and growers to adapt to climate change and measure, manage and reduce emissions, while recognising sequestration opportunities from their farm.
We have also made progress on getting the right tree in the right place; incentivised by the price on carbon and guided by Shane Jones made real progress.
As I have already mentioned, we amended the Climate Change Response Act. It creates a framework for requiring emissions reduction plans and national adaptation plans.
We have begun rehabilitating the Emissions Trading Scheme which was degraded in its effectiveness during and after 2009 – so much so that it became a fig leaf disguising inaction, making our 2030 target harder to achieve.
A two-for-one deal, a cap on price with no floor, flooding of the scheme with Ukrainian hot air, the deferral on the never never of the phase out of free allocation and the exclusion of agriculture severely undermine its efficacy. It is now being reformed to incentivise business and consumers to lower their emissions. A limit on total emissions allowed in the scheme has been added. This addition was always needed in the absence of Kyoto 2 and the clean development mechanism, and was overdue.
And let us not forget, the last Government also put an end to any new offshore oil and gas exploration -- a significant move for our climate. We then developed a Just Transition Unit to work with regions like Taranaki to transition their economies towards low emissions industries. We will provide the Just Transition Unit another $5 million per year, so that it can support regions like Southland as well.
We will also invest in emerging technologies, like green hydrogen and the National New Energy Development Centre - parts of the Just Transition strategy which position New Zealand as a world leader in renewable energy.
But our work doesn’t stop there.
Our move away from fossil fuels will increase demand for electricity – from electric vehicles to heat pumps and industrial process heat.
New Zealand currently produces 84 per cent of its electricity from renewable sources, well on the way to the 90 per cent by 2025 target the Labour Government set back in 2007. At the time, our critics said it could not be done, it would reduce security of supply and put up prices. They were wrong on all counts.
To accelerate the transition, we have brought forward our 100 per cent renewable electricity target to 2030. This is also an important contribution decarbonising industrial heat and transport.
We have been investigating, as per the recommendations of the Interim Climate Change Committee, hydro schemes which pump water to manage peak demand, dry hydrological years and the intermittency of renewable energy sources such as wind and solar.
If this proved feasible it could transform our energy system and mean we would no longer need to rely on thermal base load generation such as coal- and gas-fired facilities at Huntly.
Experts have identified a pumped hydro scheme at Lake Onslow as the renewable project most likely to address New Zealand’s dry year needs. It would also provide a reliable and affordable hedge for intermittent renewables like wind and solar. This could in turn replace the future electricity price, especially compared to the counter-factual.
It is predicted Lake Onslow would be capable of storing up to 5000GWh – the same amount as all of New Zealand’s existing hydro schemes combined.
At its peak, the Lake Onslow project could employ 3500 to 4500 skilled and semi-skilled workers, as well as thousands more in indirect jobs.
We have committed $30 million for a business case of Lake Onslow and other smaller schemes in the North Island. We will also explore alternative technologies, and consider any that offer a better way to achieve our 100 per cent renewable target.
We will invest a further $70 million in detailed design and engineering work based on what the business case finds.
To make sure we have the right settings in place to reach our 2030 renewable energy target, we will put in place a new National Policy Statement for Renewable Electricity Generation. This will update guidance to local authorities when considering developments.
We also intend to ban new low and medium temperature coal boilers and the construction of new fossil fuel electricity generation.
We will support business through this transition by rolling out $70 million to support them to replace fossil fuels in industrial heat and connect to the grid. This could include help with transmission line upgrades, and direct support to industrial users to convert their coal boilers to renewable alternatives.
Transport accounted for 21 per cent of our gross greenhouse gas emissions in 2018, and is the fastest growing source of emissions in New Zealand. Decarbonising our light vehicles fleet is one of the biggest opportunities to reduce emissions in the energy sector.
We are currently only one of three countries in the OECD that does not have a carbon efficiency standard. New Zealand for too long has imported too many polluting vehicles. We risk receiving the dirty end of the spectrum of cars produced in countries who are clearly imposing efficiency standards on cars entering their own fleet. We will rectify that by putting in place a clean car standard.
Last term, we provided greater support for low emissions vehicles by co-funding over 1000 EV chargers nationwide. We have also established the Low Emission Vehicle Contestable Fund to encourage innovation and investment that will accelerate the uptake of low emission vehicles.
We will continue to help New Zealand’s freight network become more sustainable and efficient, including through coastal shipping. We will extend beyond 2025 the exemptions for electric heavy vehicles from road user charges.
We made unprecedented investments in rail over the last 3 years, and will continue to invest in road, rail, public transport and walking and cycling infrastructure to get our cities moving, keep New Zealanders safe, help unlock the supply of more housing and boost productivity.
Projects on the books includes:
- The Auckland Transport Alignment Project
- Let’s Get Wellington Moving
- Developing a rapid transport network for Christchurch
- A light rail connection from the city centre to Māngere and the airport
- Continuing to invest in Kiwirail and develop domestic rail workshops in places like Hillside and Woburn.
We will require only zero emissions buses to be purchased for the public transport bus fleet by 2025, with the aim of decarbonising that fleet by 2035.
We also want to lead by example, so the Government will continue to fund the decarbonisation of the state sector through the $200 million clean-powered Public Service Fund. We will require government to build and lease more energy efficient buildings.
But while we are investing in change, we also need efficient and durable legislative frameworks to both support the climate transition and deal with these issues in the natural and built environments.
A key priority for me is updating New Zealand’s resource management system.
We all know that the RMA has not worked as it was intended, when brought into law 30 years ago. In short, it costs too much, takes too long and has not adequately protected the environment.
There are significant pressures on both the natural and built environments that need to be addressed urgently. Urban areas are struggling to keep pace with population growth and the need for affordable housing.
It is unacceptable for this cornerstone law to be underperforming in a country that both values protection of the environment and wants to properly housing our people.
In July 2019, I appointed the Resource Management Review Panel, led by retired Court of Appeal Judge Tony Randerson QC, to review the resource management system. Under their Terms of Reference, the primary aim was “to improve environmental outcomes and better enable urban and other development within environmental limits”.
The Panel’s report is the most comprehensive review of New Zealand’s resource management system since the RMA was passed in 1991. It built on reviews by other groups including environmental and business interests, and provides a platform for change.
The Panel received a range of submissions, engaged widely and was supported by reference groups within natural and built, rural and urban, and te ao Māori, as well as a range of working groups from within central government.
The Panel concluded the new system should complement the Climate Change Response Act and the emissions trading scheme to help New Zealand achieve its emissions reduction targets, and that it should better enable a response to the impacts of climate change.
The Panel made a number of recommendations, including:
- specifying both mitigation of emissions and adaptation to climate change as outcomes to be pursued under the new NBA – the Natural and Built Environments Act, replacement for the RMA, with national direction required for both.
- a new Strategic Planning Act to require regional spatial planning throughout New Zealand. Regional spatial strategies would be developed by joint committees with membership from central and local government and mana whenua, in consultation with stakeholders and communities
- a Managed Retreat and Climate Change Adaptation Act to help prepare for and fund managed retreat from rising seas and other hazards.
We aim to facilitate efficient land markets while protecting natural environmental values. The renewables do this in part by separating biophysical outcomes from amenity values.
The development of mandatory national direction on climate change and regional spatial planning provides opportunities to discuss what’s needed to stave off the worst effects of climate change and to adapt to the growing hazards of a warming planet.
In the proposed new system, spatial planning will help integrate decision making under the Local Government Act, the Land Transport Management Act, the NBA, and the Climate Change Response Act. It will provide a longer-term view of infrastructure needs and improve coordination between different parts of central and local government, infrastructure providers and others in the private sector.
There is a clear mandate for reform; and we will now implement the reform package, which we expect to land within this three year parliamentary term.
We have a plan. And as we recover from Covid-19, I am looking forward as Environment Minister to working alongside many people here and elsewhere to do our bit to address climate change for our people, our communities, our environment and our economy.
The Government is committed to a transition that is just and equitable for all New Zealanders as we guide our country to be more productive, sustainable and inclusive.
Success will rely on all of us working together - on that same social cohesion and interdependence we have shown through the adversities we faced as a people over recent years.
Together we will build back better.