Speech to the Climate Change and Business Conference

Climate Change

Tēnā koutou i tēnei ata.

Good morning.

Recently I had cause to say to my friends in the media that I consider that my job is only half done.

So I’m going to take the opportunity of this year’s Climate and Business Conference to offer you a mid-point review.

A look at the past, the present and the future of climate change policy and action, here in Aotearoa New Zealand.

The Past

First, a visitation from the Ghost of Climate Policy Past.

Our main areas of focus in our first term and the first half of our second term has been on governance and accountability, emissions pricing, the greening of the finance sector, transport and energy and industry.

Governance and accountability

When it comes to governance and accountability, we focused in our first term on establishing the institutional framework to guide climate policy and action over the coming decades.

We passed the Zero Carbon Act and become one of the first countries to put the 1.5˚C global warming threshold into primary legislation.

(Although, based on recent court cases, it sounds like we need to strengthen that somewhat.)

We declared a Climate Emergency and committed the public service to carbon neutrality by 2025.

Which is twenty five years sooner than we’re asking of the rest of the country.

We established the Climate Change Commission.

We now have our first three Emissions Budgets through to 2025, 2030 and 2035.

More stringent than the Commission proposed.

And we have recently published the country’s first ever Emissions Reduction Plan and National Adaptation Plan.

Fifteen Ministers, three fifths of the Executive, as well as over twenty government ministries, departments and agencies have specific, named responsibilities in those plans.

The big shift this term – this year in fact – has been that, as a result of all of this work, climate change has gone from being the problem of the Minister of Climate Change and the Ministry for the Environment, to everybody’s problem. 

Right across Government.

Emissions Pricing

Emissions pricing has been the centrepiece of climate policy in this country since 2008.

For most of that time it was an abject failure because the previous Government spiked it to ensure that polluters faced almost no price at all.

We had a cap-and-trade scheme without a cap.

And polluters had unlimited access to international units at rock bottom prices.

So for almost the whole time we had an emissions trading scheme, our emissions went up rather than down.

In 2014, the year I was elected to Parliament, the average price of carbon was $3.87 per tonne.

In 2017, when I was first got into Government, it had recovered to $18 per tonne.

By 2020, we had overhauled the Emissions Trading Scheme and put a sinking lid on emissions for the first time.

As a result of the changes we’ve made, the price of pollution has increased five-fold, from $18 per tonne in 2017 to $85 per tonne today.

By the way, remember the Hot Air Scandal?

Most of those international units were so cheap because they weren’t worth the paper they were written on.  

Well, I have written off every single one of those dodgy units.

There’s not a single one of them left in Aotearoa.


Asked why he robbed banks, John Dillinger said, “Because that’s where the money is”.

The finance services sector itself is not a major source of emissions.

If you ask the average person where we need to focus to bring down emissions, most people would say agriculture, transport or energy.

And they’d be right – except of course that all of that work requires financing.

So the role and influence of the finance sector in the transition is, I think, often underestimated.

And it has been a big focus of our work in the recent past.

We established Green Investment Finance and capitalised it with an initial $400 million to galvanise private sector finance into the green economy.

It’s already had some wins.

Just the other day, you may have read solarZero, one of the companies that Green Investment Finance has been working with, sold to Blackrock.

Over the coming seven to ten years, Blackrock are going to put a billion dollars, above the sale price, into solarZero.

That is a lot of solar panels.

We barred default KiwiSaver funds from investing in fossil fuels.

Given that something like 75% of all New Zealanders stick with their default funds, that represents a pretty big divestment.

We put in place a Responsible Investment Framework for the big Government’s funds of NZ Super, ACC and the Government Superannuation Fund.

They all now all have net-zero strategies.

Just this last week NZ Super announced it was shifting 40% of its portfolio into low-carbon investments.

Also last week Grant and I announced the Government’s framework for the upcoming Sovereign Green Bond issue.

While this doesn’t amount to any new debt, it does mean that debt we take on will come with strings attached.

This means that there is an extra layer of accountability taking us towards net-zero.

And, as you well know, we’re the first country in the world to require all listed companies and large financial institutions to report on their climate related risks, from next year.

This is already having an impact, even before the first reports are due out.

For example, I was talking to a bank that has started talking to its farming customers about how to lower their climate related risks.

That means building resilience to the increasingly frequent and severe storms, floods and droughts.

But it also means working out how to cut the farm emissions that cause climate change in the first place.

It isn’t the most visible area of climate policy and action.

But I’m really proud of the work we’ve done greening the financial sector.

Because shifting those capital flows will make a colossal difference in the years to come.


Having said that, we also put a lot of effort into the two main sources of carbon dioxide emissions: transport and energy.

We have invested billions of dollars of into buses and trains, cycling and walking infrastructure.

A couple of weeks ago I was in Tauranga, visiting the company that are busy manufacturing Wellington City’s fleet of full battery electric double-decker buses.

They’re not imported, they’re being built right here in Aotearoa.

Also being built here are new electric ferries for Wellington and Auckland Harbours.

We brought in vehicle emissions standards for new imports for the first time in New Zealand history.

And we brought back the mandate to include biofuels in the petrol we’ll still use in our cars for years to come.

We’ve also invested in EV charging infrastructure around the country.

We started to replace the entire government fleet with zero-emission vehicles.

Although we’ve also shrunk the fleet by about a quarter, because it turns out, when you start asking questions, you discover we can actually do without a fair few of them.

And the Clean Car Discount has outperformed even our most optimistic scenarios.

One in five new cars sold in this country is now a battery electric vehicle.

Twenty percent – and its over forty percent if you could hybrids.  

Energy and industrial heat

When it comes to energy and industrial heat, one of our first acts as a Government was to end new offshore oil and gas exploration.

We set up Ara Ake, the new energy research centre in Taranaki to kickstart energy innovation.

Started replacing our own coal boilers in our schools, hospitals and universities with renewable alternatives.

And one of our most successful programmes, the Government Investment in Decarbonising Industry fund, is helping businesses to switch to clean energy.

The projects that the GIDI fund has already invested in will cut emissions by seven and a half million tonnes over the coming years.

Let alone what it will be able to do with the $650 million we allocated to it in this year’s Budget.

As I said, most of the effort recently has been on energy and transport.

But there are a couple of honourable mentions in other sectors.

Building and Construction

In the Building and Construction sector, we made Greenstar 6 the minimum build standard for all new state homes.

That means annual energy savings for around $570 per household.

And a huge 80% reduction in construction waste from every building site.

And we increased subsidies for home insulation, extending that to thousands more homes.


When it comes to forestry, we set up the Billion Trees programme and invested $1.2 billion in Jobs for Nature.

That’s now creating permanent carbon sinks all over New Zealand.

As well as thousands of jobs, many of which are in areas of long-term deprivation and persistent unemployment.


It hasn’t all been about mitigation either.

We conducted the first nationwide Climate Change Risk Assessment and committed millions of dollars to flood defences in some of our most vulnerable communities.


And on the international front, we quadrupled our climate change related aid from $300 million to $1.3 billion.

At least half of that will go to the Pacific, if not more. And at least half will go on adaptation and resilience, if not more.

We have done more to fight the climate crisis in the last five years than the combined efforts of governments over the last three and a half decades.

Is it enough? No.

And it never will be. There will always be more to do.

We are yet to see a sustained decline in our greenhouse gas emissions.

Even when we do, we need to ensure that decline continues and, in fact, picks up the pace, every year until we hit net-zero.

But it’s also not nothing.

This is a marathon effort involving every part of government, every sector of the economy and every member of our team of five million over the next three decades and beyond.

Which brings me to the Ghost of Climate Policy Present.

The Present

Right now, we’re busy setting up the Interdepartmental Executive Board that will oversee the implementation of the several hundred actions outlined in the Emissions Reduction Plan and the National Adaptation Plan over the coming years.

[I’d like to acknowledge Lisa Daniell in the room, who has been appointed the Executive Director of the Board.]

Everyone in this room will have complaints about the silos that make up central government.

One of the elements of the Emissions Reduction Plan, that I don’t think we make enough of, is that we are constructing a horizontal coordinating function to sit across all these vertical silos.

Each Chief Executive on the Board has individual responsibility for executing their agency’s part of the plan.

But they have collective responsibility for the plan as a whole.

And that includes advising Ministers of any changes that might need to happen to ensure we hit the emissions budgets.

But much of my focus as Minister of Climate Change, for the balance of this Parliamentary term, is primarily dealing with the land sector.

There’s a tonne of things going on, which are all related to each other in some way.

We’ll be consulting shortly on our response to He Waka Eke Noa, the Primary Industry Partnership, on agricultural emissions pricing.

That has to be up and running on 23,000 farms in about thirty months from now, which, in Governmental terms, may as well be tomorrow.

The Climate Change Commission is worried that the current ETS settings will lead to a glut of forestry offsets in the 2030s.

That in turn could lead to a crash in the ETS price and a return to the bad old days of companies just using cheap offsets rather than actually reducing their emissions.

While we’ve put in place a cap into the ETS, it is a very soft cap.

That’s because anytime anyone plants enough trees to sequester a tonne of carbon, we automatically generate an NZU, which is a permit to pollute a tonne of carbon into the atmosphere.

Which means, technically, that unlimited forestry allows unlimited pollution.

Aotearoa is the only country in the world with an ETS that allows companies to offset 100% of their pollution with forestry.

In the Emissions Reduction Plan the Government committed to a review of ETS sequestration supply and demand settings.

These are the types of challenges this review could grapple with.

Of course, changes in that domain could have significant consequences for the forestry sector.

But here’s the thing.

The Government is going to auction off, or give away through Industrial Allocation, something in the order of 90 million tonnes worth of NZUs between now and 2030.

None of those 90 million tonnes are backed with forestry offsets.

They’re just permits to pollute a tonne of carbon.

Now, our Nationally Determined Contribution under the Paris Agreement calls for us to reduce our net emissions by 100 million tonnes on top of our domestic emissions budgets.

And when we made the decision to increase our NDC last year, Cabinet also prioritised domestic investment and achievement before relying on arrangements with other countries.

That 90 million tonnes that we’re going to auction off, or give away for free, could be backed with domestic forestry.

That would give Iwi and other landowners some predictability and reliable income on land that is otherwise incredibly challenging to generate a return from.

Finally, we’re also working on how we restore our native forests and wildlife outside of the ETS.

The ETS is well set up to sequester carbon dioxide, as it should be.

But it’s not great at achieving biodiversity outcomes.

So alongside the implementation of the upcoming National Policy Statement on Indigenous Biodiversity, we are looking at biodiversity credits and incentives.

Each of these projects is a piece of the jigsaw puzzle.

They are independent in their own right, but they also fit together into a bigger picture.

And they won’t work on their own.

Each piece is interdependent on all of the others, in order to make sense on its own.

It is an astonishingly complex picture too.

Because we’re talking about the Earth’s biosphere, the ecosystem we all depend on for our very existence.

And existing economic interests make tweaking any part of the system very challenging indeed.

Nevertheless, I have hope that by the time this Parliamentary term draws to a close a year from now, that we will have made significant progress on what the boffins call LULUCF; land use, land use change and forestry.

In plain language, farming, forestry and nature.

And other countries are watching very closely at what we do.

The example that we set could set the standard for what other developed countries choose to do with their own farming, forestry and nature based solutions.

Which brings me to the Ghost of Climate Policy To Come.

The Future

From an almost standing start, my work over the last five years has been to get the flywheel of climate policy and action up and whirling to the point that its momentum will continue even after we’re gone.

The next Parliamentary term is when we will see the first full rotation of that flywheel.

The year 2025 is the end of the first emissions budget period.

And it’s the start of the second emissions budget period from 2026-2030.

Which means it is also when we have to publish our second Emissions Reduction Plan for how we’ll meet that budget period.

It’s also when we decide on what the fourth emissions budget will be, from 2036-2040.

It’s when we decide our next Nationally Determined Contribution under the Paris Agreement, from 2031-2035.

It’s when we decide to bring our international shipping and aviation activity into our domestic greenhouse gas accounts and targets.

And it’s when agricultural emissions pricing kicks in on 23,000 farms. Finally.

That set of decisions and actions, in the next term of Parliament, will determine the speed and momentum of climate policy and action in this country for the next fifteen years afterwards.


We have achieved a heck of a lot the last five years.

We’re as busy as all get out right now.

And we have so much more we have to do.

That is why I say my job is half done.

Because that flywheel will come full circle, for the first time, over the course of the next four years.

And my commitment is to see that through.

There are parties in Parliament who, if they get their way, want to dismantle the entire machine we’ve built.

In which case we’ll be back where we started, thirty years ago.

The worst possible scenario I can imagine for the future of climate policy and action in this country, would be for someone to put the brakes on.

Or worse, for it to come of its axle entirely.

I will do whatever I can to make sure that doesn’t happen.

I will do everything in my power to make it go faster.

So that energy that we’ve built up, painstakingly, over the past five years, becomes an unstoppable force, driving that transformation over the coming years towards an economy that is productive, that is inclusive and that is, truly, sustainable.

A smart, green future, that works for everyone.

No reira, tēnā koutou, tēnā koutou, tēnā tatou katoa.