Government plans tree-planting spree as report shows New Zealand no longer on track to meet climate target

The government has published a draft plan for consultation today. The final plan will be published before the end of the year.

“This draft Emissions Reduction Plan shows that with effective climate change policies we can both grow our economy and deliver on our climate change commitments,” said Climate Change Minister Simon Watts.

The government released an economic analysis with the plan and said the policies would reduce New Zealand’s GDP by 0.4% by 2030 than if no emissions reductions were attempted. It is keen to ensure that emissions reductions do not come at the expense of growth.

The impact on GDP is expected to remain similar through 2050. The plan’s effects will be felt most strongly among households with annual incomes between $35,000 and $61,000, particularly superannuation households. These households will reduce their consumption by an average of 0.4% to just under 0.6%, compared with no change.

The policies in the plan are mostly things the government announced during the campaign, such as setting a target of 10,000 electric vehicle chargers by 2030, improving public transport in Auckland by opening the City Rail Link and investing in new rapid transit. Agriculture and forestry will make the biggest contribution to the second emissions budget, although short-lived gases like methane will remain outside the ETS.

In the last Budget, the Government included a plan to improve organic waste management and landfill gas capture, and invest in resource recovery through the Waste Minimisation Fund.

Earlier this month, the government announced a plan to invest in carbon capture, use and storage, which traps emissions, preventing them from entering the atmosphere. That was also included in the plan.

One of the main goals of the plan is not to reduce emissions, but to plant huge numbers of new trees to capture emissions.

The Government has stated that it is interested in obtaining private investment to plant trees on Crown lands.

This area is not located in a national park, is not suitable for agriculture and has low natural value.

“Estimates of the area of ​​Crown land suitable for planting are preliminary and conservative. Further analysis will be required to confirm the suitability of the land; however, it is likely that more land is available and the potential reduction is greater than currently projected,” the plan reads.

Ideally, these forests should consist not only of pine forests, but also of native forests.

“Native forests can provide a long-term carbon sink and additional benefits, including biodiversity and adaptive value.

“Established native forests are likely to be better adapted to steep and erosion-prone terrain because they are more resistant to extreme weather conditions,” the plan says.

It has been noted that current incentives put native forests at a disadvantage compared to introduced trees.

“(The) government is interested in exploring partnerships to increase incentives for planting native species,” the statement said.

Assuming that planting occurs from 2027, the government believes that it will be possible to plant 5,000 ha of native trees in 2027, and 7,500 ha from 2028, and 10,000 ha from 2027 of exotic trees.

The current government wants to make greater use of the Emissions Trading System to reduce emissions, but the system itself has not yet proven to be helpful.

NZU emission units covered by the program are currently trading at a price of just over $50, significantly lower than in the past.

The government is planning some changes to the ETS, but the details have not yet been finalized. One big change could be tightening the rules on the giveaway credits that are currently given to industrial emitters. This would be a double whammy for those emitters who lost out on hundreds of millions of dollars in decarbonization subsidies offered by the previous government.

The government is now giving some industrial polluters free credits to ensure they are not disadvantaged when competing internationally.

These allocations must be regularly reviewed to ensure that these companies suffer sufficient losses from the ETS to reduce their emissions, but not so much that they are placed at an international disadvantage.

Former climate change minister James Shaw has launched a review of these settings, which were last set in 2010. The current government will undertake this work to, as the plan puts it, “ensure that free allowances more accurately reflect the emissions of companies receiving allowances”.

“We will publish the updated regulations at the end of 2024,” we read in the report.

The report also warns that significantly more work will be needed for New Zealand to meet its Nationally Determined Contribution (NDC), the international climate target set out in the Paris Agreement.

The plan said the policies in the plan would “contribute” to achieving the NDC, but “we know more is needed.”

Watts said the government was not consulting just on policy for its own emissions reduction plan, but also on the decision to roll back parts of the previous government’s emissions plan.

“The forecasts show we are still on track to meet our first emissions budget, but we want to seek public comment on the impact of the change in approach,” he said.

This is significant given the legal threat the government faces over its decision to reject many of the Labor and Greens’ emissions policies.

Lawyers for Climate Action have previously argued that the government is breaching the Zero Carbon Act by rejecting the previous government’s policy of an emissions reduction plan without following the emissions reduction planning process set out in the legislation.

The report indicates that an additional 93 Mt of CO2 reductions will be needed to meet the NDC requirement, on top of currently proposed policies.

The difference between the first and second emission budgets and the NDC is 101 Mt CO2-e.

That’s a hell of a lot of emissions. The second budget is 305 megatons for the full five years from 3026 to 2031, an average of 61 megatons per year.

This will likely mean New Zealand spending significant sums of money to buy international offsets, which was also part of the previous government’s plan.

Estimates of the cost of these offsets vary widely. The Treasury believes they could cost between $3.3 billion and $23.7 billion.

Thomas Coughlan is deputy political editor covering politics in Parliament. He has worked for the Herald since 2021 and in the press gallery since 2018.