Wellington (6 November 2019): As Parliament rushes the final stages of the Government’s Zero Carbon Bill, a new report by think tank The New Zealand Initiative warns the Bill is so seriously flawed that it could raise emissions.

The report, Real action, not empty words says New Zealand can reduce global emissions by far more than we contribute by working with whoever can do the most to reduce emissions, wherever they are.

“The Zero Carbon Bill will prevent New Zealanders from accessing the world’s most effective ways to reduce emissions by insisting all emissions are reduced domestically, as far as possible,” says the report’s author Matt Burgess, a Research Fellow at The New Zealand Initiative.

“While there are exciting ways to cut emissions within New Zealand, offshore opportunities appear extraordinary,” says Mr Burgess.

Research commissioned by the Ministry for the Environment suggests forcing all emissions to be reduced domestically could add $300 billion to the cost of reducing emissions to net zero, lift carbon prices to $2,000/tonne, and lower national income in 2050 by 6%.

“These huge costs reflect the scale of opportunities offshore. We should be extremely reluctant to close the door given what is possible.”

The Government has said its goal is to reduce emissions by transforming the economy.

“Transformation is a very expensive way to reduce emissions, and as advice from officials makes clear it is totally unnecessary,” says Mr Burgess.

“The Ministry for the Environment advised the Government could cut far more emissions, at much less cost, and reach net zero earlier than 2050 if it allowed emissions reduction through the most effective channels, including offshore.”

“The Government’s decision to pursue transformation is not only unnecessary, it is contrary to a goal of lower emissions and all-but guarantees failure to achieve our emissions targets.”

The report’s other main concern with the Zero Carbon Bill is the use of central planning to reduce emissions.

Sections 5ZD and 5ZF of the Bill say the Minister for Climate Change must plan how and where emissions are reduced. Plans can cover all parts of the economy, at whatever level of detail the Minister decides, and can be changed any time.

“We have serious concerns with the Bill’s rules around planning, which are so poorly drafted that almost anything could go into the Minister’s plan. History tells us poor legislation can lead to unintended outcomes, in this case higher emissions.”

The New Zealand Initiative recommends three simple changes to fix the Zero Carbon Bill:
1. Require effective action on emissions by introducing an overarching objective for both the Minister and the Commission that requires exercising their powers for “effective and efficient” emissions reductions and removals.
2. Remove section 5W to eliminate the domestic preference, allowing emissions reduction through the most effective combination of domestic and offshore mitigation.
3. Remove sections 5ZD–5ZF to eliminate the requirement that the Minister for Climate Change plan emissions reduction. The Minister will be free to prepare plans, and give effect to them by way of Acts of Parliament, the appropriate level of scrutiny for such far-reaching powers.
“Unfortunately, the Government has not been held to account for the worst aspects of this Bill. However, there is still time to fix these problems.”

The Bill could pass its third reading as soon as this week.

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