Impossible to meet Paris Agreement targets without buying offshore carbon credits - experts

It is impossible for New Zealand to meet its climate change commitments with only domestic emissions reductions, analysts say.

One says there will "always" be a cost to climate change, no matter how the country chooses to deal with the crisis, and the government needs to be clear about how it will meet that.

Finance Minister Nicola Willis said earlier this week that the government was not prepared "to send cheques for billions of dollars offshore" for carbon credits, in order to meet its 2030 Paris Agreement commitment.

Climate Change Minister Simon Watts said the government was still "exploring all available options to meet our [2030] commitment" but that offshore mitigation - paying to help other countries reduce their emissions - was not part of the current plan.

Both ministers said the government was instead prioritising reducing New Zealand's domestic emissions.

In a written statement Watts told RNZ the entire target could be met domestically due to a coming "renewable energy boom" and "increasing confidence" in agricultural technology.

"We believe it is possible ... but acknowledge it will be challenging."

Existing data shows that New Zealand will currently fall short of the 2030 target - to halve net emissions from 2005 levels - by 84 million tonnes (Mt) of greenhouse gases.

In a scenario where there was "much higher uptake" of methane-inhibiting agricultural technology, the Ministry for Environment still projects a 66Mt gap.

Compass Climate independent analyst Christina Hood said recent policy changes would worsen that gap, not close it.

"The various decisions that the current government has made has actually put us on a higher emissions track than we would have otherwise been."

Modelling from the Climate Change Commission had recommended a more ambitious 'net-negative' 2050 target - since rejected by the government.

"If you did that, the scenario that would get you towards those targets would have us reducing emissions quicker."

Even that would still not get the country all the way to the first Paris target in 2030, she said.

"There would be about a 50 million tonne, I think 49 million tonne gap left rather than the current 84."

The government could not simply lean on an even faster adoption of agricultural technology than was projected, Hood said.

"There's no credible scenario that suggests that can happen.

"If they thought that, why are they weakening our methane targets, rather than strengthening them?"

Nigel Brunel, the managing director of commodities broker Marex, said the tanking carbon price was a reflection of what the market saw as "back-tracking" by the government on climate policies.

He also thought it highly unlikely the target could be met only with domestic action.

If that was the government's intention, though, "it should be coming out with saying what it's going to do".

"It's not just about saying there's a whole lot of wind farms and solar farms coming. Sure, that's going to take care of some electricity generation. What about transport? And what about agriculture, which are a big part of our emissions? What does it intend to do about that? It needs to be much clearer."

There would be a cost to climate change regardless of whether money was sent offshore.

"Science is pretty clear about climate change," he said.

"The damage has been done and continues to be done. Stopping that, doing something about that's not going to be free, but inaction or doing nothing, many papers out there prove that's going to cost us more in the long run than actually doing something."

He added: "There's no free lunch here."

Offshore mitigation 'not a failure'

The 2030 target was set by the Labour-led government in 2021.

It built on an earlier commitment made by the previous National-led government in 2015 when New Zealand signed up to the Paris Agreement.

Both commitments were made with the understanding that at least part of the target would need to be met by paying other countries to reduce their emissions.

Talking about writing billion-dollar cheques was "a really poor framing" of offshore mitigation, which contributed to a global goal, Brunel said.

"That's what the heart of the Paris Agreement is about - helping developing countries decarbonise.

"Those carbon savings that they make domestically, we can use to help meet our [target]. The atmosphere doesn't care where the savings of carbon come from, whether it's in Vietnam, Chile, or New Zealand."

Hood agreed.

"Using international cooperation as part of meeting the target, as part of delivering our share, doesn't represent a failure to meet our target. It's part of meeting the target."

New Zealand has entered into several high-level cooperation agreements with other countries about potential offshore mitigation.

However, successive governments have not put aside any money to pay for it, and no detailed agreements about how it would happen have ever been signed.

There was blame across the political spectrum on that score, Hood said.

"Successive governments should have been putting much more concrete plans in place for how they were going to deliver it."

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