The Climate Change Response (Zero Carbon) Amendment Bill has now been tabled, providing businesses with a clear framework within which to plan.
We run through the key elements of the Bill.
The Bill establishes a zero net target (allowing for forestry offsets) by 2050 for all greenhouse gases except biogenic methane – which is to be brought within a range of 24% to 47% below gross 2017 levels by 2050, with an interim requirement of a 10% reduction by 2030.
This was widely anticipated and was probably the price of getting New Zealand First over the line. The National Party has yet to commit its support.
Leader Simon Bridges said it had found common ground on the Climate Change Commission’s form and function and on the net zero target but had serious reservations about the expected rate of methane reduction, which went beyond any “credible, scientific recommendations”.
Policies to achieve the targets
The Bill doesn’t set the emission reduction policy measures to achieve these targets. It does however oblige the Government to produce an emission reductions plan setting out that policy mix.
Whether this will involve bringing agriculture into the Emissions Trading Scheme (ETS) is therefore yet to be seen (although if it is brought in, the coalition agreement between Labour and New Zealand First provides for a 95% reduction in emission obligations).
Interestingly, the Bill obliges the Government to publish its emission reduction plan within a specific timeframe, a measure that was missing in the UK legislation on which the Bill is based. This may go some way to avoiding the climate change ‘policy gap’ criticism experienced in the UK.
Of particular interest to many emitters is the fact that the Government has not shut the door on using international emission reductions to achieve our domestic targets. While the Bill provides that budgets must be met “as far as possible through domestic emissions reductions and removals”, it also contemplates a level of offshore mitigation utilised to offset domestic emissions.
The Climate Change Commission
The Commission will be established as a Crown Entity with seven members, appointed by the Governor-General on the recommendation of the Minister from a sheet of candidates selected by a nominating committee. This committee will comprise the Chairperson of the Commission and four or more other Ministerial appointees.
The Commission is required to “act independently in performing its functions and duties”. Its key role is in the preparation of the five year emissions budgets. This will be determined by the Minister but based on advice from the Commission on:
- the quantity of emissions that will be permitted in each budget period
- the rules to measure progress
- how the emissions budgets and the 2050 target may be realistically met, including by pricing and policy methods (we assume this means setting a price floor and a price ceiling), and
- the proportion of emissions reduction to be achieved domestically and by offshore mitigation (the Bill provides that budgets must be met “as far as possible through domestic emissions reductions and removals”).
Other functions will include:
- the ability to review and recommend changes to both the timing and level of the reduction targets, but only where certain prescribed ‘significant changes’ have occurred
- advice on the quantity of emissions which can be banked or borrowed between adjacent budgets
- monitoring and reporting on progress toward meeting emissions budgets and the 2050 target
- preparing national climate change risk assessments, and
- reporting on the implementation of the national adaptation plan.
The targets are largely a political commitment as opposed to a legal commitment.
The Bill expressly states that no legal remedy or relief is available if the Government fails to meet a target or emission budget, and they are not enforceable in court. Only declaratory relief is available and only to state that the target or an emission budget has not been met. If a declaration is made by a court, it must be laid before Parliament and the Government must respond in the House.
Similarly, while Ministers and agencies may take the targets into account when performing public functions or making investment decisions, they will not be required to do this by the Bill and failure to do so will not allow the decision to be invalidated.
This may leave open judicial review proceedings but the Bill removes the key remedy, invalidation, when a decision maker fails to take into account the targets.
The Bill will go through the normal legislative process, including submissions.