$2.9b climate change boost for EVs, waste, emissions reduction

A new scrap-and-replace scheme to help low-and-middle income New Zealanders buy EVs and a nationalised curbside waste collection service is part of a significant $2.9 billion investment into tackling climate change and reducing New Zealand's emissions.

In addition, the emissions reduction plan announced as part of Budget 2022 pumped $650m into decarbonising the energy and industry sector and $710m to lower agricultural emissions. Overall, $1.2b will go into transport.

Finance Minister Grant Robertson said we need to prepare for climate change now – or prepare to pay for the cost of inaction for the "rest of our lives, the rest of our children's lives and their children's lives".

"Today is the most significant day in our country's history on climate. I hope the days of climate being a political football will end."

Robertson called policies to reduce emissions "not radical - they're essential".

He said the plan today would ensure New Zealand was on the right side of history.

Climate Change Minister James Shaw said it was "going to take all of us and it's going to take everything we've got".

Scrap-to-replace trial

Transport Minister Michael Wood said for many families, "the cost of transitioning to cleaner vehicles can be too expensive", even with the existing clean car discount scheme.

An initial trial of up to 2500 vehicles, the new clean car upgrade scheme will help low and middle-income people buy low-emission alternatives in exchange for scrapping their old car. It will start early next year with about $30m going into the trial, with the full programme likely to be up and running by 2024/25, costing about $570m over four years.

He said a similar scheme in California saw 10,000 "old, dirty cars" taken off the road and replaced with new and used zero emission or hybrid vehicles.

There will also be a $20m 'social leasing trial' for low-income families in three communities to lease EVs from a community organisation from early 2023.

Overall, $1.2b will go from the climate emergency response fund "to support people to move to public transport, increase walking and cycling, accelerate the uptake of cleaner vehicles… and decarbonise our freight system".

Electric car charging socket and lead

"That is expected to reduce carbon emissions equivalent to taking 181,000 cars off the road between now and 2035.

The Transport Minister said they were considering capping the car cost at $35,000 and offering a $10,000 subsidy to allow people to buy an EV or hybrid.

Wood said there was final policy design that needed to be done over the next couple of months, but it was expected the threshold will be approximately the median household income.

Waste

To cut emissions from waste, the Government wants to reduce and divert organic waste from landfill.

Most New Zealanders should have access to a food waste collection service by 2030. Alongside this, the Government will invest in waste infrastructure, such as composting.

All municipal landfills need to have gas capture systems by 2026.

It will cost $103m over four years, with the biggest investments from 2022 to 2024.

Climate change funding

Finance Minister Grant Robertson said the $2.9b allocation over four years intends to move New Zealand "away from short-term piecemeal responses" and towards long-term investment.

It is estimated there will be another $1.5b invested into climate change in future budgets from revenue generated from the Emissions Trading Scheme.

It could mean New Zealand may meet its first carbon budget; a limit announced last week.

The limits are part of the effort to get New Zealand to a net zero greenhouse gas emissions by 2050

Between 2022 and 2025, New Zealand needs to bring down its emissions by 11.5 megatonnes of carbon dioxide equivalent - that's approximately the equivalent of the emissions of five million petrol cars that drive 10,000km a year.

Transport

There will be $1.2b going to transport, part of that is to continue the clean car discount, improve EV charging stations and have a zero emission bus fleet by 2035.

There will be nationally integrated public transport ticketing, with new projects in Auckland, Wellington and Christchurch to create easier, cleaner and cheaper public transport.

Energy

Energy Minister Megan Woods said rising global prices meant New Zealand needed to "wean ourselves off" expensive fossil fuels and future-proof the energy system.

"Emissions from our energy and industry sectors make up 27% of our total emissions," Woods said.

The Government is boosting funding for businesses to "move to cleaner, more affordable, more efficient energy choices," Shaw said.

Woods said the funding is going up to about $650m over four years "which means we can expand the number and type of projects that receive money".

New low-medium temperature coal boilers will be banned, and existing ones phased out by 2037.

Insulation

Stronger insulation standards for new buildings "so new buildings will be warmers and drier while requiring 40% less energy to heat".

Agriculture

It said ensuring New Zealand was one of the most sustainable providers of food in the world would be achieved by introducing a price on agricultural emissions from 2025, and "working alongside farmers with advice and technologies".

$710m over four years will go to speeding up efforts to reduce agriculture emissions, expand the amount forestry reduces carbon and produce 'green' fuels.

"Our economic security depends on New Zealand's food and fibre sector," Agriculture Minister Damien O'Connor said, "It's our biggest export earner but also our largest contributor to emissions, and if we don't take action now we will be at risk as consumer preferences evolve."

"We are allocating nearly $339m to accelerate the development of high-impact technologies and practices to reduce agricultural greenhouse gas emissions, including the establishment of the new centre for climate action on agricultural emissions."

Forestry

$73.5m will go into "increasing woody biomass, which offers the best alternative to coal in our efforts to reduce carbon emissions from fossil fuels", Forestry Minister Stuart Nash said.

It will see about 10,000ha of forest planted.

"Forests can provide an abundant, natural resource to store carbon. Funding of $256m will go towards maximising the contribution of forestry in boosting carbon sequestration to achieve New Zealand's future carbon goals."

Landmark day

In a statement, Prime Minister Jacinda Ardern described the release of the emissions reduction plan as a landmark day in New Zealand's transmission to low emissions.

"We cannot leave the issue of climate change until it's too late to fix," she said.

Ardern also said that addressing climate change now "means we can bring down the cost of living".

"Reducing our reliance on fossil fuels will shield households from the volatility of international price hikes while reducing transport and energy bills. Households are already seeing the impact of escalating petrol prices and this plan sets out practical ways to cut power, transport and energy."

Shaw said it was a historic day for climate action in Aotearoa.

He said New Zealand is on track "to bend the curve of its emission downwards for the first time in history".

"The plan we have published today lays the path towards a net zero future where more people can purchase EVs, our towns and cities have world-leading public and active transport infrastructure, our highest emitters have switched to clean and reliable energy, our farmers are growing food in ways that help the climate and more of our homes are warmer and more affordable to heat."

Reaction

ACT's David Seymour called the announcement "a bonanza for bureaucrats and travesty for taxpayers".

"The Government has chosen the most expensive and bureaucratic possible route to emissions reduction. They’ve maximised political theatre while actively rejecting the least-cost path to emissions reduction during a cost of living crisis."

Climate Change Commission Chair Rod Carr said a good emissions plan would show "urgency, decisiveness, cohesion, and a commitment to collaboration".

"The transition will impact some communities, industries and regions more than others. The Government needs to work with the people who are most impacted to ensure the transition is achievable, affordable and socially acceptable."

Federated Farmers' Andrew Hoggard said he was "pleased the Government has recognised solutions to agricultural emissions lie in new technologies and tools, and is stepping up investment on that front".

"Nitrate and methane inhibitors, gene editing, animals bred for their lower methane ‘burping’ - they’re the kind of advances that will enable New Zealand’s farming sector to continue to perform for the nation’s economy while maintaining our world-leading meat and dairy carbon footprint," he said.

While Greenpeace said the plan failed "by omission of dairy pollution".

Lead agriculture campaigner Christine Rose said it was "absolutely staggering to see that the Emissions Reduction Plan fails to include policy that would reduce cow numbers or phase out the synthetic nitrogen fertiliser that drive emissions”.

"This Emissions Reduction plan is not credible because it fails to deal with the dirty great cow in the room.

"Instead of just cutting cow numbers, the Government is relying on industry promises, hypothetical, and unproven techno fixes to agricultural emissions, and the freshwater reforms that the dairy industry is undermining at every step."