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Image: Tina Tiller

OPINIONPoliticsMay 17, 2022

The ERP is a step in the right direction, but where’s the ambition?

a green background with a planet on fire, a cow, and some cars
Image: Tina Tiller

After decades of inaction, the Emissions Reduction Plan is a milestone. But we need a level of political ambition as high as the existential threat of climate change, argues Gareth Hughes.

Many years ago I had the rare privilege of visiting Kiribati, the low-lying Pacific nation on the frontlines of climate change. Climate change isn’t academic there – it’s a lived part of daily existence. Even then, in 2010, they were building seawalls to try to keep the rapidly rising seas from washing into their fields. Heartbreakingly, these flimsy walls were built from garbage and sticks and would be no match for the power of the waves. 

Yesterday New Zealand outlined the country’s plan to reduce emissions consistent with the Zero Carbon Act. Would a New Zealander travelling to Kiribati today be able to report New Zealand was doing all it could to urgently reduce emissions? Is it enough? 

It comes in the fifth year of Ardern’s premiership, 14 years after the Emissions Trading Scheme was created and 32 years after New Zealand’s first climate targets were announced. Since 1990 New Zealand’s emissions have increased by a full quarter – primarily as a result of “cars, cows and coal”. Successive governments have preferred agricultural exemptions, ineffective price signals and technological wishful thinking over more proactive policies. Inadequate targets, pine tress and creative accounting have all been used to mask our long-standing lack of deep and decisive action. 

Yesterday climate minister James Shaw released the Government’s first Emissions Reduction Plan (ERP) – a laundry list of policies to meet the first emissions budget. The plan sets out $2.9 billion in spending from the Emissions Trading Scheme, the biggest single item being a $569m cash-for-clunkers scheme to encourage cleaner vehicles. There’s $350m for walking and cycling, $650m to help industry invest in low-carbon processes and $339m for agricultural research and a new Centre for Climate Action on Agricultural Emissions. Farming still gets a free ride outside of the ETS and many people have pointed out the irony of it receiving about a third of the total funding without contributing anything towards it.  

Cows. Lots of cows. (Photo: Martin Hunter/Getty Images)

Despite being a weighty 343 pages, the plan lacks detail and ambition and many of its pages are padded by outlining existing projects and case studies. Far too many actions are listed as to “investigate”, “explore”, “trial” or “consider”, and 12 separate new strategies are proposed. Substantially grappling with the 50% of our emissions that come from agriculture or making difficult decisions like reducing the national dairy herd have been “kicked down the road” to another day, along with congestion charging and bans on internal combustion vehicle imports. People hoping for a permanent extension of public transport discounts, free public transport or electric bike incentives would have been disappointed. 

With billions of dollars of ETS revenue to spend, there are many worthwhile projects in the plan. Home insulation, more electric car chargers, a new Climate Information Centre and organic kerbside waste collection are all good projects. One particularly promising area the plan outlines is a Māori climate strategy and action plan that “prioritises mātauranga Māori”. Funding will be made available for tāngata Māori initiatives and I would love to see solar panels adorning the roofs of marae, and whānau and hapū producing their own power. I imagine an Emissions Reduction Plan developed in a true Tiriti partnership would be stronger.

I wanted to see a huge regenerative agriculture fund and a €25bn package like in the Netherlands to radical reduce livestock numbers. I wished for more to help our most vulnerable New Zealanders cope with climate change among the other structural challenges they face. I hoped the ERP would have sent a clearer signal that New Zealand coal burning might end before my children have kids and oil drilling might stop before they have grandkids. There are plenty more climate policies to push politicians of all stripes on.

After decades of inaction, the ERP is a milestone and a step forward but a small step. Would this plan truly demonstrate to a citizen on a small-island state like Kiribati that New Zealand is treating climate change like an emergency and doing all it can to reduce its high per-person emissions? Probably not. It does show a direction of travel and after decades of inaction, perhaps those selling this aspect of the ERP are right to celebrate this. We need a level of political ambition as high as the existential threat of climate change.

The ERP is a modest step in the right direction but still leaves many of the most intractable, difficult choices ahead. We should celebrate positive steps but we shouldn’t forget Bill McKibben’s warning that “‘winning slowly is the same as losing”.

While this isn’t the bold, transformative plan to fundamentally redesign our economy to live within planetary boundaries it should be, it can be a foundation to build on. The climate movement has made massive strides and is now securing serious money and policy programmes, but the scale of action is not yet matching the scale of the climate emergency. 

In the end, a bold, transformative plan is unlikely to come handed down from those in power – it will come from people coming together. People who want to turn roadway into cycleway like on the Auckland Harbour Bridge, travel between our towns and cities on a national network of fast intercity rail and ride on modern free public transport need to redouble their efforts. Those campaigning to end coal burning for milk dehydration and a ban on coal exports need to ramp it up. Those calling for social justice and drawing attention to the fact 15 companies are responsible for three-quarters of New Zealand’s emissions need to constantly remind our politicians about this. We need to work together, build bridges and form alliances across society to create a transformative climate movement. This is just the start.

Gareth is a former Green MP, now the country lead for the Wellbeing Economy Alliance and chairperson of SAFE.

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Image: Tina Tiller
Image: Tina Tiller

OPINIONPoliticsMay 17, 2022

A tame, tentative and too thin Emissions Reduction Plan

Image: Tina Tiller
Image: Tina Tiller

No decision on congestion charging, no cash for clunkers scheme for two years, no political risks taken. Bernard Hickey on the government’s wasted opportunity on climate change.

This article was first published on Bernard Hickey’s newsletter The Kākā.

So much for a climate emergency. The Labour/Green government has unveiled a politically and financially tame Emissions Reduction Plan that offshores a large proportion of our climate spending and backloads most of the costs here to 2024 and beyond.

It has kicked into touch the politically difficult decisions around congestion charges, agricultural emissions and the electricity market. It also chose not to ban the importation of petrol and diesel cars and utes from 2035 nor to shut down connections to the domestic gas network from 2025.

Its flagship “cash for clunkers” scheme isn’t scheduled to start in earnest for at least another two years, with the key decisions on how it will operate, who will be eligible, what types of cars to be exchanged and how much per car it will cost yet to be decided.

What’s in the plan

The ERP includes $2.9b of new spending over four years from a $4.5b Climate Emergency Response Fund (CERF), which is itself funded by revenues from the Emissions Trading Scheme.

However, only $1.17b of that is in the first two years, with most of that used to:

  • Subsidise the conversion of industrial coal boilers, mostly in dairy factories ($230m);
  • Vaguely fund Waka Kotahi’s efforts to encourage cycling ($373m);
  • Subsidise moves to reduce emissions from waste ($100m);
  • Pay for research and development to find technologies to reduce agricultural emissions ($92m); and,
  • Fill up a past Waka Kotahi funding shortfall caused by low public transport usage during Covid ($47m).

Almost a third of the spending in the first two years is going to help the agriculture sector adjust, even though agriculture has contributed nothing to the current Emissions Trading Scheme (ETS) that the spending is coming from, and is not due to be part of the scheme at all until 2025 (the decisions on what form that will take have still not been made.)

Finance minister Grant Robertson said Treasury had advised of an extra $800m in ETS revenues because of higher carbon prices, which offset $840m allocated in December for “international climate finance”, or buying international carbon credits for a market that does not exist yet. Robertson said just $2.9b of the $4.5b fund available had been allocated.

The ‘cash for clunkers’ scheme will allow low-income households to trade in their gas guzzler for an electric vehicle. Photo: Miles Willis/Getty

The flagship “cash for clunkers” scheme unveiled in the plan actually only commits $32m to a trial in the first two years for 2,500 vehicles at a cost of $12,800 per vehicle, with decisions yet to made on the remaining $537m to be spent over the following two years. Even so, it would only allow 42,000 clunkers to be traded in for low-emissions vehicles, and only to those households earning less than the median wage.

The measures would see just 30% of the light vehicle fleet being electric or hybrid by 2035, with only a 35% reduction in vehicle kilometres travelled. The overall effect of the plan would be to reduce the number of cars on the road by 181,800 by 2035, from a current light vehicle fleet of 4.4m.

The measures to encourage the adoption of electric vehicles and the specific adoption of public transport amount to just $52m of the $2.9b trumpeted. Just $12m is allocated for electric bus purchases, with diesel buses being bought for another three years and still being used until 2037.

What’s not in the plan

The plan was as notable for what was not in it as what was, including:

  • No plan to ban imports of petrol and diesel-powered cars by any date, which was recommended by the Climate Commission and widely done overseas;
  • A decision not to stop new connections to the domestic gas network from 2025;
  • No decisions on congestion charges for Auckland or anywhere else, other than a vague suggestion of more consultation and no action for at least two and a half years;
  • No announcement of an extension of the half-price bus, train and ferry fares beyond the current three months;
  • No funding for future larger subsidies of public transport to ensure some sort of just transition;
  • No significant measures to encourage investment in renewable electricity generation or remove the current one million tonnes of coal currently being fed into Huntly by Genesis Energy to power Auckland; and,
  • The assumption about closing the Tiwai Point smelter has been removed from the plan, adding to the burden of moving to 100% renewable electricity and meaning the 30% fall in wholesale electricity prices cannot be relied upon to enable the transition.

My view

The key things to know here are:

  • The government had already decided to make its climate spending fiscally neutral, meaning it will only spend the revenues from the ETS;
  • It has ruled out borrowing to fund new climate infrastructure or measures to reduce emissions;
  • It has also decided to underspend from that fund, effectively tightening fiscal policy by taking in more from the ETS than it is spending;
  • Despite being painted as equitable, a full third of the plan’s spending in the first two years goes to the farming sector, who contributed nothing to the ETS, and there is nothing in the first two years to help those on low incomes;
  • The government has made no politically painful decisions, kicking the can down the road on congestion charges, road conversions to cycleways, subsidies for electric cars, climate friendly infrastructure and bans on internal combustion engine imports.

The government has done the least it possibly can to meet its limited emissions targets under the Zero Carbon Act, and has done nothing either truly transformational or politically difficult. Its main priority in this plan appears to have been to:

  • Reduce government debt now, rather than use the balance sheet to invest for future generations;
  • Avoid giving the impression of being “addicted to spending”, as the Opposition has accused Labour of; and,
  • Avoid any decision that might alienate or lose the vote of median voters, who mostly live in suburban homes they own and have at least two cars in the driveway – including, possibly, a double cab ute – and who rarely if ever use public transport.

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