The government won’t admit it yet, but The Spinoff is calling it: New Zealand has no viable path to reach its 2030 emissions targets.
“I am incredibly confident we will meet our fair and ambitious target,” climate change minister Paula Bennett said in 2016 as New Zealand signed the Paris Agreement along with 194 other UN member states, as part of the world’s most significant effort to keep temperature rises below 2C above pre-industrial levels.
New Zealand committed to reducing greenhouse gas emissions by 30% below 2005 levels by 2030. In 2021, climate change minister James Shaw raised the target to a 50% reduction (though, confusingly, the target is based on net emissions while the baseline is gross emissions, meaning the actual reduction is more like 41%).
Despite how it’s framed, the target doesn’t just apply to the year of 2030; it’s averaged over a decade. New Zealand agreed to stick to a budget of 571 megatonnes (mt) of CO²-equivalent emissions between 2021 and 2030. If we go over, we have to buy carbon credits from other countries.
From 2021-2025, based on audited emissions data and projections by the Ministry for the Environment, New Zealand has emitted 358mt. There is 213mt left in the budget, which is nowhere near enough to last another five years.
New Zealand is on track to emit 68mt in 2025. To meet the budget, the annual emissions would need to drop to 42.6mt for each of the next five years. There is no realistic way to meet that target unless most of our cows drop dead from a disease, a global war makes it impossible to import petrol, or there is some other black swan event.
Based on current projections, New Zealand is on track to emit 659mt between 2021 and 2030, putting us 88mt over our budget. Missing our 2030 target isn’t necessarily a shock; it was always expected that the country would rely on overseas mitigation in the short term and hope that technological and policy advancements help us reach our major goals by 2050.
But the sheer scale of New Zealand’s blown climate budget makes meeting the target difficult, even with international carbon credits. The Paris Agreement only accepts carbon credits that meet high quality standards, which makes them expensive. Treasury analysis in 2023 put the cost of purchasing carbon credits between $3.3bn and $18.3bn and international experts put it at the higher end of that projection because there is expected to be a shortage of carbon credits by 2030, leading to inflated prices. New Zealand has had discussions with other countries about purchasing carbon credits but, to date, no government has put aside any money for it.
When asked if New Zealand could still meet its 2030 commitments, climate change minister Simon Watts told The Spinoff the government was “committed to all of New Zealand’s climate change obligations, including those under the Paris Agreement… 2030 is 48 months away and I am optimistic about how we are tracking”. Watts said “the government has ruled out buying offshore credits for this election term, and we have no current plans on purchasing credits. Our efforts to continue reducing emissions domestically as a priority continue, but we are also exploring all options while recognising the challenges.”
Finance minister Nicola Willis and trade minister Todd McClay have made similar statements, that the government plans to meet the emissions targets without buying overseas carbon credits. But the statistics show that position defies credibility.
Government ministers aren’t yet willing to admit that New Zealand will miss its targets, but they’ll have to say it eventually. When that happens, it will trigger an awkward conversation about how we’ll pay for it and what it will mean for the international consensus on climate change.
As Newsroom’s Marc Daalder points out, the government has backtracked on virtually every significant climate policy this term; removing the clean car rebate, restricting funding for walking and cycling projects, importing more fossil fuel, adding subsidies for new oil and gas exploration, gutting key parts of the Zero Carbon Act, cutting methane reduction targets, and falling well short of its pledge to install 9,000 public EV chargers.
Those moves have rattled confidence in the emissions trading scheme, New Zealand’s main mechanism for driving private sector emission reductions. The price of NZU carbon credits has crashed from $88.50 in November 2022 to $39.75 at time of publication, a sign that investors doubt the government’s long-term commitment to the scheme.
New Zealand is not alone in this. As 2030 creeps closer, many UN member states – particularly developed countries – will be looking at the bill and suddenly doubting their ambitions.
The United States has already bailed; the world’s second-largest emitter withdrew from the Paris Agreement in 2020 during the first Trump presidency, rejoined under Joe Biden, and left again this year. Internationally, there is a growing chorus of politicians, mostly on the populist right, who are making noise about leaving the agreement – including David Seymour and Winston Peters.
New Zealand probably won’t be the first mover. If the agreement collapses it will most likely happen like a dam breaking; one or two major countries quit, followed by a bursting tide of copycats giving up on their self-imposed criteria. The alternative – considered most likely by many UN-watchers – is that the agreement will limp along, weakened, with countries paying lip service to their goals but quietly giving up on their ambitions.
Earlier this year, over 90% of countries missed the deadline to submit updated carbon targets. They’ve slowly caught up – 108 had filed by November 9 – but it’s a sign that the international consensus is wavering. If that trend continues, humanity’s best chance at minimising the impacts of a warming planet may be over.
