National policy plans
The Zero Carbon Act will require the Government to make a plan.
New Zealand currently does not have a credible plan to reduce domestic emissions. The Zero Carbon Act will require the Minister to make a policy plan. This plan must enable carbon budgets to be met, and put New Zealand on a fair and cost-effective pathway towards zero carbon.
One policy plan for ‘two baskets’
The plan will include policies to reduce long-lived and short-lived greenhouse gases.
Under the ‘two baskets’ approach, we propose that the Minister must prepare a single emissions reduction plan. The policies included in the plan must enable the budgets for long-lived and short-lived GHGs to be met. A single plan is necessary because some policies will reduce emissions in both budgets.
We propose that the Zero Carbon Act separate New Zealand’s GHG emissions into two ‘baskets’. Different targets and pathways will be set for each basket. (See The ‘two baskets’ approach).
Despite the separate targets, the Minister must prepare a single emissions reduction plan. This plan must include policies to reduce long-lived GHGs (such as carbon dioxide and nitrous oxide), and policies to reduce short-lived GHGs (such as methane).
It is important that all of these policies are prepared under a single plan, because some policies will affect both ‘baskets’. For example, agriculture-focussed policies to reduce nitrous oxide emissions (a long-lived GHG) may also reduce methane emissions (a short-lived GHG).
Making a national policy plan
Under the Zero Carbon Act, the Minister has two duties:
Make a plan: The Minister must set policies and proposals to enable carbon budgets to be met.
Report on the plan: The policy plan must be released to Parliament and the public. The Minister must also prepare a report explaining how the plan will meet future budgets, which sectors of the economy will be affected, and the expected timeframe of each policy.
The Minister’s plan must give effect to Te Tiriti o Waitangi. This means giving effect to meaningful partnership between iwi and the Crown, which includes a duty to consult with Māori. The plan must also be consistent with the other principles of the Zero Carbon Act. For example, the plan must contribute to environmental sustainability. (See Purpose and Principles).
Transitioning to net zero carbon will require a long-term plan with clear objectives and milestones. For example, we will need to raise the price on carbon, increase our use of renewable energy, plan for sustainable urban development, and increase forestry and other carbon sinks. In the longer-term, we will need to decarbonise the transport sector, use emission-free materials for building and industry, and introduce new technologies, such as long-life energy storage and super-smart power grids.
Long-term planning will ensure that New Zealand’s zero carbon transition is fair and cost-effective. Combined with the Climate Commission’s evidence-based advice, the Act’s legal framework will prevent zero carbon transition plans from being trumped by political short-termism.
The Minister’s plan must prioritise permanent emissions reductions, and factor in implementation timelines. In other words, the Minister must consider the time required to build infrastructure and put policies in place. This promotes long-term thinking, while prioritising immediate action and decision-making.
Beyond these requirements, the Zero Carbon Act will not prescribe how the Government must meet its targets, or which specific policies must be introduced. These are decisions for the Government.
National policy plans must be prepared in advance
National policy plans must be set by the Minister well in advance. Within two years of a carbon budget being set, the Minister must prepare policy plans that ensure the budget will be met.
Because budgets must be set 12 years in advance, this means policy plans must be prepared 10 years in advance. For example, a carbon budget beginning in 2040 must be set by 2028, and the policy plan to meet this budget must be set by 2030.
Setting policy plans in advance promotes transparency and long-term certainty. This long-term certainty will help businesses, communities and public authorities to:
take up opportunities created by the transition to a zero carbon economy
invest with confidence
take complementary steps to reduce emissions
understand what New Zealand’s transition to a safe, thriving zero carbon future will mean for them.
The Government can update an existing policy plan at any time by reporting these changes to Parliament and the public. The report must explain how the plan will still meet future budgets, which sectors of the economy will be affected by the updated plan, and the expected timeframe of each policy.
Annual emission statements
The Zero Carbon Act will require the Government to report on its progress towards meeting carbon budgets. Every year, the Minister must publish a statement of New Zealand’s emissions.
The annual emission statement must include the total emissions for each greenhouse gas, whether emissions have increased or decreased in the last year, and the amount of carbon absorbed by forests and other carbon sinks. Combined with the Climate Commission’s annual progress reports, this statement will transparently show whether or not the Government is meeting its targets. (See Independent Watchdog).