NZ Business - - COVER STORY -

The Pro­duc­tiv­ity Com­mis­sion’s fi­nal re­port on how New Zealand can tran­si­tion to a low-emis­sions econ­omy found that early ac­tion on key pol­icy re­forms is needed if New Zealand is to achieve its emis­sions-re­duc­tion goals.

Chair of the Pro­duc­tiv­ity Com­mis­sion, Mur­ray Sherwin, said in a state­ment in early Septem­ber that the pe­riod to 2050 will pass quickly. “De­lay­ing ac­tion is likely to make the tran­si­tion costlier and more abrupt and limit vi­able and cost-ef­fec­tive mit­i­ga­tion op­tions in the fu­ture.”

Amongst the nu­mer­ous changes that will be re­quired across the econ­omy – some dis­rup­tive, some less ob­vi­ous – three par­tic­u­lar shifts must hap­pen for New Zealand to achieve its low- emis­sions goals, the com­mis­sion said: • Stop burn­ing fos­sil fu­els and switch to us­ing elec­tric­ity and other lowe­mis­sion en­ergy sources. This means a rapid and com­pre­hen­sive switch of the light ve­hi­cle fleet to elec­tric ve­hi­cles) and other very low-emis­sions ve­hi­cles, and a switch away from fos­sil fu­els in pro­vid­ing process heat for in­dus­try. • Un­der­take sub­stan­tial lev­els of af­foresta­tion to off­set New Zealand’s re­main­ing emis­sions. This will re­quire sus­tained rates of plant­ing over the next 30 years (mostly on land cur­rently

used for sheep and beef farm­ing), po­ten­tially ap­proach­ing the high­est an­nual rate ever recorded in New Zealand. • Make changes to the struc­ture and meth­ods of agri­cul­tural pro­duc­tion. This will in­clude di­ver­si­fi­ca­tion of land use to­wards more hor­ti­cul­ture and crop­ping, and greater adop­tion of low-emis­sions prac­tices on farms. How­ever, it says that th­ese needed changes are un­likely to hap­pen at the scale and pace re­quired un­less the Govern­ment pri­ori­tises ac­tion to: • Es­tab­lish a com­pre­hen­sive and durable cli­mate change pol­icy frame­work, in­clud­ing sep­a­rate leg­is­lated long-term tar­gets for short- and long-lived gases; a se­ries of suc­ces­sive emis­sions bud­gets; and an in­de­pen­dent Cli­mate Change Com­mis­sion. • Re­form the New Zealand Emis­sions Trad­ing Scheme and ap­ply some form of emis­sions pric­ing to meth­ane from agri­cul­ture and waste. • De­vote sig­nif­i­cantly more re­sources to low-emis­sions in­no­va­tion and tech­nol­ogy, to ac­count for the long time­frames in­volved in bring­ing in­no­va­tive ideas to fruition. The re­port also rec­om­mends a suite of other pol­icy re­forms to help drive the tran­si­tion. Th­ese in­clude in­tro­duc­ing emis­sions stan­dards for newly reg­is­tered ve­hi­cles, a fee­bate scheme to ac­cel­er­ate the up­take of EVs, and manda­tory cli­mate-re­lated fi­nan­cial dis­clo­sures.

“In our draft re­port, we noted that the tran­si­tion would be chal­leng­ing but achiev­able. Hav­ing now com­pleted our work, we con­tinue to hold that view.”

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