3 Oct 2023

Climate debate puts parties' emissions policies under scrutiny

7:15 pm on 3 October 2023
Labour's Megan Woods, National's Simon Watts and James Shaw for the Green Party.

Photo: RNZ

With New Zealand on track to fall 114 million tonnes short of the 2030 emissions reduction target, and billions of dollars likely needed to pay for it, climate change is going to be central to New Zealand's future economy.

Just seven years away, our first big international deadline is a 41 percent reduction from 2005 emissions levels across all sectors of the economy.

The 114 million tonne carbon dioxide equivalent (Mt CO2-e) shortfall that is projected is more than double New Zealand's net emissions from 2021.

National Party spokesperson Simon Watts, Labour's Megan Woods, and the Green Party's James Shaw debated their climate policies, moderated by Morning Report's Corin Dann, on Tuesday.

ACT declined to take part, NZ First did not respond, and Te Pāti Māori did not put a candidate forward in time.

Challenged on why Labour had chosen to subsidise businesses to decarbonise when surely they could afford to do it themselves, Woods said they preferred to look at it as partnering.

"So New Zealand has two choices to reach our emissions. Either we cut our emissions here at home or we go and buy credits and essentially help other countries to decarbonise."

She pointed to the $140m spend from the Government Investment in Decarbonising Industry (GIDI) fund for NZ Steel to build an electric arc furnace.

"We're getting those emissions for around $17 a tonne, we could not go anywhere else and buy an emissions reduction credit for that amount of money but the thing for me ... is that we're protecting those jobs here in New Zealand," Woods said.

"The biggest emissions reduction we've ever done in New Zealand, it is a huge amount that we're taking out, it's 1 percent of our emissions target and we're getting it for $17 a tonne ... if we were going to do this through the ETS you'd probably have to be looking at carbon pricing being around $200 a tonne which would drive up the price of petrol and electricity."

Watts said it would not do that, and criticised this as $140 million of taxpayer money going to a profitable multinational company.

"You're talking about an organisation that's earning $2.3 billion of profit ... they're not going to leave, this is an operation that's in Australia, the US and New Zealand, you know, they put their hand out for some money and the government wrote a cheque.

"They need to be doing this themselves. We don't support corporate subsidisation."

Shaw argued the job of reducing emissions could not all be left to the ETS, and said the fund assessed whether projects invested in would have happened anyway.

"When we consulted on the Zero Carbon Act back in 2018, 90 percent of the respondents said they thought that revenue from the Emissions Trading Scheme should be recycled back into decarbonising industry, so that's what we have done."

He said he wanted to make changes to the ETS so that companies could get credits for reducing their emissions, further incentivising change.

"At the moment, companies that plant trees get capitalised for drawing carbon dioxide out of the atmosphere but companies that reduce the amount of pollution they put into the atmosphere aren't ... if we were to change that then I think you would see directly through the emissions trading scheme companies just cracking on with it."

He defended his record on the ETS markets, saying Cabinet had ignored his advice. The Climate Change Commission should be independently setting ETS unit prices, he said.

Watts rejected that suggestion, instead criticising the government's handling of the ETS.

He said National did "support" the Climate Commission's advice, but he did not commit to making the changes the Commission had recommended. Those changes include allowing the commission to set unit prices.

"We've said very clearly we don't intend to make any changes to the ETS," Watts said, but seemed to speak counter to his own party's policy: "The price will go where it will go, it is a market, it is not for government to determine what that price should be or where it will go."

Both Labour and the Greens have committed to allowing the commission to set ETS prices, which Woods acknowledged was a shift from the government's previous decisions.

"This is actually the smart way to do it," she said. "Simon seems to believe that there's a pure market with an ETS that can do this alone, it simply isn't the case ... any credible body that you look at around the world says that you need complementary measures alongside an emissions trading scheme or a carbon pricing scheme."

Watts said he was "not going to be lectured by Megan, Grant Robertson forgot to tell James Shaw in August that he was taking $100m out of his Budget so you're simply not credible."

He argued it was "simply not the case" that failing to curb emissions would mean fuel and electricity costs rising. Asked what he would do if this did happen, he said National was focused on doubling New Zealand's renewable electricity supply by making consenting faster and easier.

"Government needs to be focused on doing the doing, and we've announced around the renewable energy and also our plans around agricultural emissions."

National's policy on agricultural emissions includes extending the deadline for on-farm emissions pricing by five years, out to 2030.

Shaw acknowledged Treasury's forecast of between about $3 billion and $23b that could be needed in offshore credits to make up for shortfalls in emissions reduction promises.

"This is an unfortunate legacy of sort of 20 or 30 years of decision making. There was a period of time when the overall assumption was it was cheaper to do this offshore and not to change your domestic economy," Shaw said.

"One of the key pieces of work in the last six years is to focus on the domestic economy and to start to bend our emissions downwards ... but it will take time for that to catch up with the obligation we have."

Watts repeatedly refused to answer how National would make up those kinds of shortfalls, saying "our focus in the short and medium term is on domestic emissions reduction".

Woods said National "doesn't have a single policy that meaningfully reduces emissions. We have policy that actually reduces emissions."

Watts said Woods was wrong to say doubling renewable energy would not achieve the emissions targets.

He said taking away the effective ban on GMO and investing in biotechnology was a key solution for reducing livestock emissions by 2050.

"We have to be ambitious about finding a solution to this problem because pricing alone isn't going to stop methane coming out of livestock ... the Greens have been blocking GMO technology in this country for a long, long time."

Shaw contested this, saying the Greens had not been "in a position to block anything here, our votes aren't required to form a majority in the government and haven't been for the last 20 or 30 years.

"The government has spent something like $350m in agricultural scientific research, that's almost double the amount that the previous National government put in over a 10-year period."

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