Changes to emissions targets raise more questions over NZ’s real climate ambition
Thursday, 13 November 2025
ANALYSIS: The United Nations’ COP30 climate change conference kicked off in Brazil this week without a major delegation from the United States and amid a high degree of pessimism over climate change action, both here and overseas.
The UN’s own latest prediction is the world can expect 2.8C of global warming from pre-industrial levels based on current policies, almost double the target set by the Paris climate conference in 2015.
Reuters argued last week that EU climate change ministers had “weakened” their targets in the run-up to COP30 by allowing member states to achieve more of their planned 2040 reductions through the purchase of carbon offsets from outside the EU.
Global pessimism at COP30
New Zealand’s Climate Change Minister Simon Watts, who will head to COP30 next week, this month proposed a series of changes that would also give the Government more wriggle room in terms of ‘how’, though arguably not ‘whether’, it met its climate goals.
That came just weeks after the Government watered down its goal for cutting methane emissions to a 14% reduction from 2017 levels by 2050, from the previous 24% target.
A bill will be introduced next year to amend the Climate Change Response Act.
Proposed changes include giving primacy to the country’s 2050 “net zero” carbon target — rather than the Paris commitments — when deciding how many new carbon credits can be auctioned off to polluters through the Emissions Trading Scheme (ETS).
A Cabinet paper setting out the case for the changes has been heavily redacted. But the intention behind the ETS change appears to be to delay or avoid an increase in the domestic carbon price that would push up the cost of living while buying more time for future governments to put in place arrangements to buy carbon offsets from overseas.
Another important element of the bill is that it would pave the way for the Government to count various forms of “carbon capture”, alongside forestry, in the country’s net emissions figures, potentially making its reduction targets easier to reach.
That would lay the groundwork for natural gas producers to earn carbon credits for storing carbon dioxide in disused oil and gas wells, or farmers to earn credits for restoring wetlands, for example.
Green Party co-leader Chlöe Swarbrick is concerned by those and other amendments to the act that would at least somewhat reduce the input of the Climate Change Commission into policy-making.
She has accused the Government of “shredding” a consensus on climate goals and making decisions for the benefit of big business at the expense of people and the planet.
On the bright side, rewarding more novel techniques for carbon capture is sensible in theory — even though it could be viewed as yet another overly hopeful way to try to cut emissions without engaging in significant economic sacrifice.
Attempting to store carbon dioxide in disused gas wells would be better than simply not even trying. The snag comes in designing the incentive appropriately to take account of the inherent uncertainty of long-term success.
Lip service to Paris?
Also forming part of a silver lining, perhaps, is that National Party ministers are still paying at least lip service to the country’s Paris climate commitments, instead of walking away from the international agreement as the US has done.
Those goals include reducing net greenhouse gas emissions (meaning emissions after forest-planting and other offsets) to 50% of the country’s 2005 gross emissions by 2030, and to 51% of that figure — so not much better — by 2035.
But the Environment Ministry said in 2023 that domestic emissions reductions alone would not be enough to meet the former commitment.
The Government has long been sending mixed messages on whether it would be willing to pay billions of dollars to make up the domestic emissions gap, amid what appears to be a divide within the Cabinet on that issue.
Trade Minister Todd McClay has publicly questioned whether the public would accept such a wealth transfer overseas.
But Penny Simmonds, when filling in as acting climate change minister in July, said the Government had expanded and was exploring offset options with several countries, including Vietnam, Thailand, Malaysia, the Philippines and Singapore.
So efforts to come to some arrangement that would paper over the domestic reduction shortfall — presumably on the cheap — appear to be ongoing.
Treasury and fiscal blind spots
The fact the Treasury has so far judged it unnecessary to build any liability into its fiscal forecasts, which it forecast in 2023 could fall anywhere between $3.3 billion and $23b may speak the loudest.
Former climate change commissioner Rod Carr said in December that excuses for the Treasury not accounting for at least a $2.5b liability were getting pretty thin.
Greenpeace executive director Russel Norman believes the key to understanding the changes proposed in the Climate Change Response Amendment Act is that the Government is attempting to juggle three mutually exclusive objectives.
“It wants to keep the domestic carbon price down. On the other hand, it has got to pretend it’s going to meet the Paris target, but it also doesn’t want the liability on the books.
“If you ‘pretend’ too much on the domestic side, it’ll push up the domestic carbon price. If you ‘pretend’ too much on the international side, then you get this massive liability.”
Carr says that by reducing the rewards for cutting domestic emissions, the ETS change will increase the country’s obligation to buy offshore mitigation to meet its 2030 Paris commitment — unless of course the Government scraps that or pulls out of the Paris agreement altogether.
More concerning perhaps, the Climate Change Commission in July characterised some of the main measures the Government is counting on to make near-term progress on its 2050 “net zero carbon” goal as uncertain and lacking a back-up plan.
The Government is targeting an annual reduction in carbon emissions of more than 16 million tonnes between 2031 and 2035.
But the commission assessed there were significant risks to it achieving about 11 million tonnes of those planned reductions and an absence of measures to achieve another 2m tonnes, with almost none of the reductions looking a safe bet.
Chief executive Jo Hendy warned the risk of New Zealand “veering off course” from meeting its 2050 ‘net zero’ carbon emissions target had increased, describing the country as being at a “fork in the road”.
Luxon prioritises growth
There appears to have been scant if any recognition of that from Prime Minister Christopher Luxon in his comments to Parliament, or indeed on the scale of the problem of climate change more generally — at most, a desire to take the latter as read and quickly move on.
On July 15, he said “I think the effects of climate change on extreme weather events are well understood and well known”.
But for the most part he has appeared to downplay climate action as secondary to promoting economic growth.
On November 4, he told MPs “we're going to make sure that we deliver on our commitments, but importantly, we are powering up this economy and we are all about economic growth”.
On August 20 that “we're on track to deliver on our commitments, but this is a Government that is unapologetic that we are prioritising economic growth”.
On April 8, when asked whether climate change was one of the biggest threats facing New Zealand, he responded: “The major one that we're facing right now is actually economic growth. That's why this Government is prioritising economic growth above and beyond everything else.”
And so it goes on.
Renewable projects and innovation
Watts responds that it is important to recognise New Zealand’s emissions have been falling since 2022, and highlights the work taking place to fast-track the consent of new renewable projects.
“The reality is this Government has to be measured on what actions it takes. We’ve got more renewable generation happening in the last 18 months than in the last 15 years.”
But, still, the message appears to be that New Zealand can have it all, without sacrifice.
“Climate change and growing our economy are two sides of the same coin and we’ve shown pretty clearly that, particularly in the agricultural space, some of the technology innovation that will lead to emissions reduction in agriculture will also have an increase in productivity for our farmers,” Watts says.
“The old paradigm is ‘this is one or the other’. That is not the reality of how it works.”
Pressure from abroad remains distant
The not-so-secret hope of many climate activists has been that New Zealand’s trading partners — in particular the EU and the UK — will cite commitments in the country’s free trade agreements to pressure it to up its game.
Norman told a select committee in October last year that he had spoken with the EU Ambassador to New Zealand, Lawrence Meredith, and formed a view there was “a very high risk that New Zealand's position on climate change will become a focus of the European Union”.
But that is not a threat it has so far been possible to recreate under laboratory conditions, as it were.
Meredith eventually declined a request from The Post for an interview on the topic. He would have had to check back with Brussels on the request.
Whatever officials may be saying behind closed doors, given everything else going on in the world, from Trump’s trade policies to Russia’s war on Ukraine, this may not be the time when the EU is inclined to engage in a public spat with any ally on climate policy.
The timing is just not right.
The risk for “NZ Inc” is that could change suddenly and exporters could find themselves disadvantaged after any return to more normal times.
In the meantime, tangible progress on climate change may be more down to individual Kiwis than what happens inside the Beehive in Wellington or at COP30 Brazil.