NZ in talks with more Asian nations to help meet 2030 climate pledge

Saturday, 5 July 2025

Climate Change Minister Simon Watts says Cabinet hasn’t made a decision about “physically buying offshore credits”, but it has negotiated agreements allowing that option.

The Government is broadening discussions with countries in Asia that could help it meet its commitment under the ‘Paris Agreement’ to contribute to the reduction of carbon emissions by 2030, ministers say.

Acting Climate Change Minister Penny Simmonds said New Zealand was now exploring options with several countries, including Vietnam, Thailand, Malaysia, the Philippines and Singapore.

In 2021, former Green Party leader and climate change minister James Shaw agreed to beef up New Zealand’s contribution to tackling global warming through an updated pledge to the United Nations.

Shaw committed New Zealand to — by 2030 — cutting its net emissions to half of what the country’s gross emissions had been in 2005.

But the nature of the so-called National Determined Contribution (NDC) means the cuts could be achieved through multiple means other than reducing domestic emissions themselves.

Those other options include buying overseas offsets — essentially funding other countries to achieve some of the promised reduction on New Zealand’s behalf — and, at least until recently, planting more trees to absorb carbon.

The Treasury says NZ’s climate commitment does not amount to an “obligation”.

Former climate change commissioner Rod Carr warned last year that the country would miss its 2030 emissions reduction commitment by about 100 million tonnes unless it used the overseas option, as the time to achieve the goal through tree growth had run out.

The commitment of some National Party politicians to achieve the 2030 reduction goal has sometimes appeared soft.

Stuart Smith, National’s climate spokesperson when Shaw made the 2030 commitment in 2021, said then that the 2030 NDC was unrealistic and could cripple the economy.

Trade Minister Todd McClay has since questioned the public’s appetite to spend billions of dollars on overseas mitigation to plug the gap, and the Treasury has advised the Government that while it has a legal obligation to “prepare and maintain successive NDCs that it intends to achieve”, it does not have an obligation to actually deliver the emissions reductions.

Chlöe Swarbrick fails to get a straight answer from the PM on whether the commitment to the 2030 Paris pledge stands.

“Inherently, a commitment is not an ‘obligation’ if it can be adjusted at the discretion of the entity which made it,” it advised Finance Minister Nicola Willis last year.

Prime Minister Christopher Luxon repeatedly refused to say whether the 2030 NDC commitment remained in place when put on the spot by Green Party co-leader Chlöe Swarbrick during question time in Parliament in March.

The German-based NewClimate Institute estimated in October that of 25 major economies it analysed — which did not include New Zealand — 13 did not appear on track to meet their 2030 commitments, based on their current policies, which might suggest international expectations on New Zealand could reduce nearer to the deadline.

But Climate Change Minister Simon Watts reiterated to The Post late last month that the Government was committed to all its climate change targets, including the 2030 NDC.

“The decision around physically buying offshore credits is not something that the Cabinet has currently made a decision upon,” he said.

“But what we have done over the past 18 months is enter into a number of agreements with other countries in regards to having the mechanisms and arrangements in place that should we want to progress that option, then we can do so.”

Expanding on those comments, Simmonds noted that Luxon last year made joint statements with Singapore, Thailand and the Philippines “reflecting our interest in collaborating on climate action, potentially including NDC implementation”.

“Following that, our diplomatic efforts have taken forward formalising this commitment with these countries and with others,” she said.

In 2023, the Treasury estimated the cost of the overseas offsets that would be required to meet the 2030 NDC between $3.3 billion and $23b, depending in large part whether they were bought from “emerging” or advanced economies.

But Simmonds said the Paris Agreement allowed countries to co-operate on “non-market approaches like finance, technology transfer and capacity-building”, appearing to suggest the Government could find more creative solutions than simply buying overseas credits themselves.

The Treasury has yet to incorporate any potential costs from funding other countries to reduce emissions into its fiscal forecasts.

That is despite an assessment from Wellington think-tank the McGuinness Institute — disputed by the Treasury — that accounting standards require that, and Carr asserting in December that excuses for it not accounting for at least a $2.5b bill were “getting pretty thin”.

Treasury documents released under the Official Information Act indicate its approach hinges largely on whether it thinks the Government is boxed into a corner in meeting the 2030 target, with its current opinion being that it isn’t.

But officials have looked back to the media for answers on that issue, reflecting a level of uncertainty.

Last year, officials analysed media reports on what they thought the “valid expectation” of the Government meeting the NDC target was and included a tally of 29 views from journalists in a memo.