Climate change poses risks but New Zealand’s Minister for Climate Change says it also offers capital and funding opportunities for the financial services sector.
In particular, he sees big scope when it comes to the two E’s: energy and emissions.
Boosting the country’s clean energy, which is both abundant and affordable according to Watts, is a big focus for the Government.
So is carbon pricing, which Watts described as the “most effective mechanism” for reducing emissions while speaking at a Financial Services Council event on Wednesday.
Watts, who is the Minister of Revenue as well as Minister of Climate Change, gave a speech where he outlined the “five pillars” making up the Government’s planned climate strategy.
Watts said a key driver of the country’s emissions came from energy which accounted for 40% of NZ’s total emissions. Transport makes up around 18% of that figure, he added.
“The way in which we decarbonise and reduce emissions in transport particularly is going to be through electrification for light vehicle fleets and most probably hydrogen for heavy fleet vehicles,” he said.
“If we can produce that energy here in New Zealand, we don't need to import that fossil fuel from offshore.”
That will have a significant fiscal impact as well as provide more energy security.
“And one can’t underestimate the importance of energy security and its linkage to food security in the current world of geopolitical instability, particularly in the Southeast Asia region,” he said.
Watts said NZ currently produces around eight gigawatts of electricity energy from geothermal power per year and the Government wants to push that up to 16 gigawatts in the next 25 years.
“That's a pretty significant commitment. But we believe it is possible and that will put us in a competitive advantage over many other countries because of the abundance of energy. Energy powers our economy, and that will give us options.”
The Government’s Fast Track Approvals Bill which has been in the headlines since it was announced in March would make the consenting processes for these big energy projects much quicker.
Watts said the Fast Track Bill took into account the challenges of “how long it takes to get stuff done in this country”.
“We really need to double down and accelerate the speed at which we're putting in renewables into New Zealand to enable to support our economy. And obviously those renewable energy aspects will also lead through to reduce high emission fuels.”
All about the ETS
Watts said the Emissions Trading Scheme (ETS) is a key area of focus in NZ, describing pricing carbon as the “most effective mechanism” when it came to reducing emissions.
New Zealand was “lucky” to have the second oldest and most mature carbon market in the world after the EU which made the country experienced in the carbon space, he said.
Watts added he’d been “very clear” this government would ensure no significant changes are made to the ETS – while also looking for areas to improve.
However, one significant change that is happening to the ETS is the Government’s decision to keep agriculture out of the ETS, which they announced on Tuesday.
The Labour government had planned to introduce agriculture to the ETS from January 2025 and had been working with the sector to develop agricultural pricing before the 2023 election.
Watts said at the FSC event that NZ’s economy had a huge reliance on its primary sector especially when it came to exports and the Government needed to work with that sector, not against it.
“There is no solution to agricultural methane on the ground at scale in New Zealand today. And so what we have said is that we will introduce pricing by 2030, but we want to work with the industry, not against it,” he said.
In the next 77 months to 2030, the Government would put in place on-farm measurement and monitoring, mandatory reporting and have a pricing panel in place.
Federated Farmers has said they will use the new Pasture Sector Group, also announced on Tuesday, to negotiate for no on-farm emissions pricing at all.
Federated Farmers President Wayne Langford said he hoped the new group would focus on reducing, rather than pricing, on-farm emissions.
Watts told interest.co.nz after the FSC event on Wednesday that he hadn’t heard Federated Farmers comments on no on-farm emissions pricing and that the Government had been “very clear” it would be working towards emissions pricing by 2030.
“New Zealand farmers are some of the most carbon efficient in the world, but there is also significant opportunity for the New Zealand agricultural sector to innovate and play its role to reduce emissions. Pricing of emissions is well known globally as most effective mechanism in order to achieve those outcomes,” he said.
When asked about his coalition partners Act and NZ First’s interest in the Government’s climate strategy, Watts said they shared a “united view” on climate opportunities.
“The overarching climate strategy that I've outlined today is the coalition government strategy and that is representative of the views of all of the coalition partners within the Government,” he said.
17 Comments
Some good ideas there (electrification, geothermal) but farming getting a free pass. “We’ll work with them” just means nothing will happen. “NZ farmers some of the most carbon efficient in the world” - maybe (evidence?), but NZ farmers’ problem is methane emissions, not just carbon. Both are dangerous greenhouse gases causing climate change and need addressing
Not a good idea to shoot NZ cows and import Chinese milk. Bit like shutting down gas exploration and import Indo jungle coal.
"Mapping the carbon footprint of milk production from cattle: A systematic review
...The carbon footprint of milk (after the recalculations) ranged from 0.74 (New Zealand) to 5.99 (Tanzania) kg CO2e·kg−1 FPCM (Figure 4).
...These latter countries (i.e., with low footprint values) have pasture-based milk production, with good pasture and animal management ensuring high pasture quality and high feed conversion efficiency, with relatively low external inputs (Australia, Ireland, New Zealand, and Uruguay)."
https://www.journalofdairyscience.org/article/S0022-0302(22)00585-9/ful…
Speedmax - learn about the biogenic carbon cycle.
""Dr Kevin E Trenberth says: ...The issue is that methane is so short lived that in fact NZ is already at “net zero” wrt methane. The numbers of livestock have been stable enough since 2010 that the amounts emitted are completely compensated by the amounts oxidized to carbon dioxide. Since the methane started out as carbon dioxide in the atmosphere before being taken up in grass, and then eaten by livestock, the process is circular."
https://newsroom.co.nz/2024/04/08/govt-sidelines-climate-commission-in-…
Saying Labour was going to bring agriculture into the ets in 2025 is not telling the whole story. It first tried to get voluntary agreements ( E Waka Noa ), and agriculture was going in at a 95% discount, . The proceeds were going to be plowed back into methane reduction research. I think by 2030 farmers will be wishing they made that deal.
What I find hypocritical about Mr Langford's stance is that there is expectation that public funding is used to help support (bail out) farmers when there is a severe drought or flood (which are made worse by climate change whether they choose to face facts or not). Refusing to pay their way via ETS should have consequences at the other end.
Considering the public cannot afford the rise in food prices to accommodate more user pays on covering risks & events caused by poor national & local infrastructure management you would think it would be better to ensure the security of food production at the source rather then resorting to importing more food from foreign retailers when our local food production fails. It certainly is cheaper and better for the environment. After all much of the population is already on food bank support. Food is sadly the most common discretionary cost that is cut in poorer families and we are already importing more food even for school lunch programs (tripling the carbon costs of the food production).
Unlike most other countries we don't have direct farm subsidies and protectionist trade agreements. We kind of already shot ourselves in the foot in regards to the security of food supply. Hence many farms being converted to unsuitable poorly managed forestry and housing developments that when it rains only increase environmental damage to massive amounts & causes more flooding. See much of the destruction from slash that is still causing severe damage to our water ecosystems even now and the massive reduction in drainage housing development does to an area (along with sewage overflows).
Not to also forget the social benefits of having access to local food supply, the ability to manage the supply chain legally more so there are employment laws, minimum wages, better environmental controls on the food processing, use of fertilizers, water use etc. Or we can just ignore the negative effects on overseas food supply with no legal control for NZ and mass employment abuse & environmental pollution and destruction overseas. I am sure you would protest equally as much for farmers in India and China as you do now considering most our vegetable proteins come from areas of extreme environmental & social abuse. I am sure you will welcome the chance to pay many multiples more for food in NZ so families who are poorer will also have access to the same food you do or even more medically suitable safe food for them.
Or perhaps since your protests are absent of any consideration of farming practices for our vegetable proteins widely used in NZ it is all just more hypocritical ableism by a person who has experienced no true food deprivation in their life and is ignorant of the harm a loss of food security does to people.
Government can easily target support for people struggling to afford food by adjusting the benefits system, and/or funding food banks. That doesn't need to involve food producers themselves. In America its called "food stamps".
We need all kinds of things to survive in 2024, including energy which DOES pay into ETS (generators).
I'm sick of the lame excuses from the ag industry for not standing on their own two feet on this issue, unlike the rest of the economy.
Tell me how did you go this long without even doing a simple budget or even looking at benefit rates.
So how affordable is it to live on a benefit now if most are resorting to charitable food banks who are also finding they cannot get enough charitable donations to feed everybody. If food was unaffordable on a benefit (as it has been for over a decade) then certainly one or two govts would have made a significant change... oh they did nothing in this regard! Protip there is no chance future govt will make significant change for this either.
Well looks like the poor are just your punching bag once again. Let them eat cake.
Ironically dumpster diving is actually more restricted now so the population just suffers from more food based issues, which include obesity from lacking adequate nutrition & resorting to anything, including striping native shore environments while we have people in their 30s now dying of starvation and kids with more malnutrition based diseases. Something no country like NZ should be proud of. But hey so long as you've got yours jack.
It's crazy that I brought some frozen fries the other day, and they were made from imported potatoes. I'm not sure the point of claiming to be the most efficient feeder of the whole world when we can't grow enough potatoes to feed ourselves.
Mind you, my own attempt to grow potatoes seems to end up with mainly feeding the rats, little(and not so liitle) barstards.
Fungus and invertebrates love them too. Actually some of the major food crisis have been avoided by human civilization being able to out maneuver fungus. In fact it was for this reason we also have significant genetic understanding as our research to improve plant resilience helped push for even more fine tuned understanding of internal makeup of different species. Which actually went on to benefit human medical development in significant ways... all to have more hardy plants to survive to eat. The last of us kind of was worried about the wrong end of fungus development more likely to affect us.
Yet sadly more and more of our food production is grown overseas with near no environmental protections (uses actual crop burning in practice as well creating large quantities of air pollution), but also processed with predominantly non renewable energy, and then shipped multiple times across vast distances. It has just become too uneconomic to grow here in the quantities we eat and the competition we face against countries with subsidized & protected farming industries is steep.
"The way in which we decarbonise and reduce emissions in transport particularly is going to be through electrification for light vehicle fleets and most probably hydrogen for heavy fleet vehicles"
What an absolute fucking lie this is.
It's true that transport is where we have the biggest opportunity to reduce emissions. Within that opportunity, electrification of the light vehicle fleet offers a minimal opportunity. Even if it were possible to electrify the light vehicle fleet quickly and cheaply, electric vehicles sales have tanked since the coalition government abolished the clean car discount for plug-in and low emission vehicles.
https://businessdesk.co.nz/article/policy/ev-sales-plummet-after-ute-ta…
Combined with massive road building plans and pulling funding for public transport and active modes, the government has decided that Transport will not be decarbonise, if anything they are doubling down on emissions.
Fucking liars. Another example of where they are making things worse, much worse.
Focusing benefits on the wealthiest with the most transport access but who have the ability to choose luxury forms of private transport or even more dangerous forms then walking & PT was never going to be a winning solution on any level; environmental, economic, social, medical etc.
You see for any significant change you kind of need to consider more then just the wealthiest (on both financial and physical levels) in the nation.
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