New Zealand needs to speed up emissions reduction in order to be a fast follower
05 Mar 2008
The report argues that more needs to be done to reduce New Zealand’s emissions in order to position New Zealand to
operate successfully in what will likely be a low emissions global economy.
The Institute’s last report recommended that New Zealand adopt a fast follower strategy with respect to emissions
reduction, initially aiming to reduce its domestic emissions to their 1990 level by 2020 and then to 30% below the
1990level by 2050.
Although some of the subsequent public commentary suggested that this strategy was not sufficiently ambitious, this
report notes that halting New Zealand’s strong emissions growth and then reducing emissions to the proposed level will
be a challenging process. Indeed, the various actions announced to date are insufficient to position New Zealand to be a
fast follower.
New Zealand Institute chief executive Dr David Skilling notes that “A key theme in this report is that New Zealand’s
climate change debate needs to be more fact-based”. Commitments such as the government’s carbon neutrality aspiration or
the National Party’s ’50 by 50’ target should be assessed in terms of the actions proposed to achieve them rather than
simply on the ambition of the target.
The report estimates that the recently announced policies, such as a comprehensive emissions trading scheme (ETS),
energy efficiency measures, and an emphasis on renewable energy, will only reduce New Zealand’s domestic emissions to
about their 1990 level by 2050. These announced policies are a step in the right direction, but they are not sufficient
to move New Zealand to a low emissions mode of operating. This relatively limited impact reflects the limited abatement
opportunities available to New Zealand.
Although it is reasonable to assume that technology will emerge over time to allow for reduced emissions, New Zealand
needs to ensure that it is positioned to adopt these technologies as they become available (e.g. by committing to adopt
international standards as they are upgraded). Increased investment in public transport and communications technology
also seems appropriate.
However, there is a limit to the contribution of measures to improve the emissions efficiency of the New Zealand
economy. The report argues that New Zealand also needs to develop less emissions intensive sources of economic growth.
Indeed, if much of New Zealand’s economic growth continues to come from emissions intensive sectors, it will be
difficult to achieve significant emissions reductions. Altering the composition of the New Zealand economy towards low
emissions activities has the potential to have a significant impact on New Zealand’s emissions.
Economic transformation should be seen as central to New Zealand’s policy response to climate change. New Zealand should
look to develop strengths in the ‘weightless economy’, an area that is both suited to a small, remote economy and has
low emissions. Policies to achieve this, such as investing in research, education, and world-class communications
infrastructure, are as important to climate change policy as emissions pricing. So far, this has not been a focus of
much attention.
New Zealand also needs to manage its exposure to changes in consumer sentiment as well as government action with respect
to emissions levels. It can do this by investing more significantly behind its clean green brand, to ensure that New
Zealand continues to be well-regarded in international markets with respect to its environmental record. New Zealand has
progress to make in this area. And New Zealand should continue to advance its interests in international negotiations by
negotiating appropriate treatment for the agriculture and forestry sectors. In this context, continuing to make public
claims about world-leadership and carbon neutrality may make it difficult to negotiate favourable terms.
Much of the public debate in New Zealand on responding to climate change has been focused on the aspiration rather than
on the materiality of the actions required to deliver the required level of emissions reduction. It is now important to
shift the New Zealand climate change debate towards a clear focus on the actions required.
To manage New Zealand’s exposure to climate change will require more serious action than has been seen to date. The
government’s announced policy initiatives get New Zealand to the starting line, but more remains to be done. David
Skilling notes that “New Zealand is not acting in a sufficiently serious way to position itself to compete in a low
emissions world”.
New Zealand needs to move from being a slow follower to a fast follower, and do so quickly. Actions speak louder than
words.
ENDS
Notes to editors:
The Institute’s previous releases on climate change are available on the Institute’s website at
http://www.nzinstitute.org