No case for reform

Matt Burgess
Insights Newsletter
26 March, 2021

After eight weeks of poring over the 847 pages of analysis from the Climate Change Commission, two findings stand out.

First, the Commission shows current policies, including the Emissions Trading Scheme (“ETS”), will deliver our 2050 emissions targets. With existing policies and an ETS price of $50, emissions will pass net zero in the late 2040s and fall to negative 12 million tonnes by the mid-2050s.

Second, the Commission’s analysis implies that with current policies, New Zealand can comfortably maintain net zero emissions after 2050.

The Commission proposes economic transformation to reduce emissions. These findings make clear this is unnecessary.

To justify its plan, the Commission disparages current policies, saying they lean too heavily on trees, “fail to drive meaningful decarbonisation” and “use up land resources for the purpose of offsetting.”

Except that is not what the Commission’s analysis shows. The Commission finds current policies:

  • Plant fewer trees overall than the Commission’s plan by 2050.
  • Deliver only a slightly higher share of exotic trees (26%) than the Commission’s plan (23%) in 2050, and
  • At least 74% of the reduction in net emissions comes from lower gross emissions, not removals by trees, by 2075.

The Commission’s analysis suggests that with current policies, New Zealand could maintain net zero emissions after 2050 without planting any new forests at all.

The Commission’s models show net emissions stabilising at about (positive) 12 million tonnes per year from 2070. This assumes no exotic afforestation after 2050.

Say we close the gap only with forestry. That would mean planting 12,300 hectares of exotic trees each year, a modest rate given afforestation over the last thirty years have averaged 13,500 hectares per year.

But there are other ways to get to net zero. The Commission’s analysis conservatively assumes an ETS price of $50; a carbon price for agriculture of $2.50; all of the carbon stored in trees goes back into the atmosphere after harvesting; and no use of international offsets.

Relax one or more of these assumptions, and we need to plant fewer trees – or none at all – to maintain net zero emissions after 2050.

So current policies tick every box.

Deliver our emissions targets? Tick.

Entirely domestic? Tick.

Mainly decarbonisation, not trees? Tick.

More affordable than the Commission’s plan? Tick. Many times more affordable.

This all means that New Zealand could do none of the Commission’s recommendations and fully meet its commitments to lower emissions, based on the Commission's analysis. The Commission has made no case for its far-reaching reforms.

We make these points and many more in our submission to the Climate Change Commission, which you can read here. Submissions close on 28 March.

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