A stark contrast emerges on climate policy

Labour says New Zealand needs to "grasp the nettle" on climate change, whereas National is keen to reassure businesses they won't be left at an international disadvantage. Photo by Lynn Grieveson

Labour's new leader has pledged her Government would develop legally-binding carbon budgets, setting up a clear choice for voters eyeing National's tweaks to existing laws, Lynn Grieveson reports.

As the election approaches, a clear choice is likely to be presented to voters on climate change policy: either minor tweaks but otherwise 'business as usual' under National, or tough new legally binding limits on greenhouse emissions under a Labour-led government.

The Government is promising tweaks to the Emissions Trading Scheme that it is hoping won't alienate those who argue New Zealand is too small to matter - and the costs of drastic action too great - when it comes to global climate change.

Labour, however, is taking up the call from the Parliamentary Commissioner for the Environment New Zealand for new climate change laws based on those in the UK, which put greenhouse gas emissions targets into law and set "carbon budgets" to cap emissions. Labour has also promised to bring an end to the "free pass" given to agriculture by bringing it into the emissions trading scheme.

"We need to legislate carbon targets," said Jacinda Ardern, pointing to this week's NIWA report which showed temperatures in the Wellington region could rise by three to four degrees by 2090, there would be more extreme weather events, and drought risk would increase in the Wairarapa.

In contrast, Bill English, speaking at his post-cabinet press conference on Tuesday afternoon, said the Government was "not planning to go down that track" of emulating the strict UK law which legislates the amount of greenhouse gases allowed to be emitted over successive five year periods.

"We've signed up to the Paris Accord, that's pretty clear-cut," English said.

"The measurements are published, we have the emissions trading system which is one of the most advanced carbon trading systems in the world, and credit systems, and we are happy with where we are going – but we do understand there is quite a challenge for New Zealand to meet those targets."

According to the Parliamentary Commissioner for the Environment, the UK's net emissions fell by 30 percent between 1990 and 2015, while New Zealand's rose by 64 percent.

National to tweak the ETS

English suggested the Government would announce some changes to the ETS in the next few weeks, but was quick to emphasise that they would only be minor.

"There will maybe be a bit more added to it between now and the election, but we are happy with where we are on climate change," he said.

"I wouldn't want to give the impression it would be any big shift. We are pretty happy with the policy where it is, but there may be some additions to it."

English was probably foreshadowing announcements around the introduction of measures included in a package of changes to the ETS agreed to, in principle, by Cabinet several days ago.These proposals would see the introduction of auctioning of carbon units. They would also see the ETS reopened to the global carbon trading market – but with, for the first time, a limit placed on how many carbon units emitters could buy from international carbon traders.

The ETS has been closed to international markets since 2015, but the Government's view in the past has been that it didn't matter where in the world the emissions reductions were made – although this argument became difficult to maintain in the face of controversy over carbon credits of dubious origin flooding out of former Soviet states.

The Government has also agreed to "develop a different price ceiling'' to replace the current $25 fixed price option, and to coordinate decisions on supply settings in the ETS over a rolling five-year period. No date has yet been set for these changes, with the Government only promising consultation over the next 12 to 18 months and making it clear it was keen to avoid excessive cost or shocks to business.

Climate Change minister Paula Bennett said Cabinet had "asked officials to work on how [the proposals] will be developed and implemented in the ETS over the next few years so there will not be immediate changes."

"We are committed to ensuring New Zealand businesses whose emissions are a big part of their costs are not disadvantaged compared to their international competitors. This means there will be no changes to the current level of free allocation at least until the end of 2020, and any changes would be well signalled and take into account what is happening internationally. The $25 price ceiling will also remain in place until auctioning or links with international markets are established."

Labour says "no excuses"

Labour's climate change spokesperson Megan Woods said a Labour-led government would establish an independent climate change commission and, rather than relying on the cost of carbon units as a deterrent, would introduce binding 'carbon budgets' that could not be exceeded - as in the UK.

She was dismissive of the tweaks to the ETS.

"They are not grasping any of the nettles that need to be grasped on this – including bringing agriculture into the ETS, which we are also committed on doing. They are not doing any of the big things, any of the transformational stuff, that will put us on a pathway to meeting our commitments.

"I heard Paula Bennett on the Wellington report saying 'New Zealand is too small to make a difference', but for Labour and for Labour prime ministers our size has never been an excuse for lack of leadership," Woods said.

"Norman Kirk didn't use it as an excuse not to send a flotilla to protest French nuclear testing, Lange didn't use it as an excuse not to ban nuclear warships – and we will not use it as an excuse not to tackle climate change."