Government believes it has plan to hit carbon target without sacrificing growth

Wednesday, 17 July 2024

Climate change minister Simon Watts says reduction of agriculture emissions will be based on technological advances.

The Government is banking on technologies such as capturing and re-injecting carbon dioxide back into gas fields and collecting methane from landfills to get New Zealand on track to meet its 2050 “net zero carbon” target.

Opening consultations on the Government’s draft Emissions Reduction Plan for 2026 to 2030, Climate Change Minister Simon Watts said the country could keep within its 305 million tonne carbon budget for the period while still growing the economy.

Green Party co-leader Chlöe Swarbrick was quick to dismiss the plan as based on “wishful thinking”.

“In a nutshell, their ‘plan’ means largely giving up on stopping pollution at the source,” she said.

Climate Change Minister Simon Watts is consulting on plans to balance New Zealand’s other budget; its carbon budget.

The Government also intends to restrict the distribution of new carbon credits to foresters by “introducing limits on the entry of new forests into the emissions trading scheme on productive farmland”.

Green Party co-leader Chloe Swarbrick says the Government’s Emissions Reduction Plan plan relies on “wisful thinking”.

Any restrictions could potentially increase the incentives on businesses to cut emissions by pushing up the price of carbon credits, which need to be bought and surrendered by companies when they emit carbon.

Watts said the Government “would not accept shutting down productive sectors of the economy to meet emissions targets”.

“Instead, we will use a technology-led approach to allow production to increase as our emissions come down.”

Under the Zero Carbon Act, the Government is obliged to prepare five-yearly Emissions Reduction Plans to ensure it is on track for the 2050 goal.

The draft plan made clear it would need to rely on additional measures to meet the separate international commitment the country made under the Paris Agreement to reduce net emissions to 50% below the level of its 2005 gross emissions by 2030.

The discussion document said the Government was considering how to address that challenge and would make further announcements “in due course”.

There has been an assumption that could require the Government to spend billions of dollars on overseas carbon credits in some form, effectively meaning it would meet the Paris Agreement commitment by paying for emissions reductions in other countries.

The draft Emissions Reduction Plan is partly pinned on a long-standing ambition to increase renewable electricity generation and electrification in sectors such as transport and manufacturing.

But the faith the Government is putting in carbon capture to reduce emissions appears one of the more striking new elements in its thinking.

It has estimated carbon capture could reduce emissions by 1.4 million tonnes between 2026 and 2030 and by 3.2 million tonnes between 2031 and 2035.

The highest-volume opportunity for carbon capture involves separating carbon dioxide from natural gas and geothermal fluids after they are extracted from gas and geothermal fields, and then pumping it back underground to avoid releasing it into the atmosphere.

Energy Resources Aotearoa, whose members are predominantly businesses involved in the oil and gas sector, has been talking up the potential for capturing carbon dioxide and sequestrating it in oil and gas wells.

The Intergovernmental Panel on Climate Change has cautioned that the storage of carbon dioxide underground “is not necessarily permanent”, given that oil and gas wells can gradually flood or be damaged by seismic activity and leak gas.

A discussion paper released by the Ministry of Business, Innovation and Employment last month suggests that taxpayers could in effect indemnify businesses for that risk by picking up liability for any such leaks after a set period of time.

The draft Emissions Reduction Plan envisages reducing emissions by the equivalent of about 5 million tonnes of carbon dioxide between 2026 and 2035 by reducing disposals of waste materials that break down into methane, and by capturing methane from landfills.

The latter can be burnt for electricity or injected into the gas network as “biogas”.

There are ambitious targets to reduce emissions from agriculture from 2031 that rely on the uptake of a variety of new technologies.

Watts said the final Emissions Reduction Plan for the period 2026 to 2030 would be finalised by the end of the year after considering public submissions and advice from the Climate Change Commission.

Climate change was an “economic issue” and the future success of the country would rely on its ability to sustainably transition to a low-emissions economy, he said.

The Emissions Trading Scheme was “the best tool the Government had to reduce net emissions at least cost”, the draft plan stated.

Swarbrick said the Government had dragged climate policies and ambition “back to the dark ages” and laid bare it had no plan to reach carbon neutrality by 2050.

“Their core strategy remains relying on the emissions trading market, which they continue to heap uncertainty onto and refuse to ensure works properly,” she said.

“A year ago, we were on track to meet climate targets. Those aren’t abstract numbers. It’s the hard science necessary for life on earth as we know it.”