Environment Commissioner’s Zero Carbon Act recommendations – Expert reaction

The new Parliamentary Commissioner for the Environment, Simon Upton, has released his first report, containing advice for the Government on how to implement a Zero Carbon Act and establish an independent Climate Commission.

The report follows on from his predecessor Dr Jan Wright’s report Stepping Stones to Paris and beyond, released in July 2017.

The SMC asked experts to comment on the Commissioner’s report. The report is available on the PCE’s website.

Catherine Leining, Policy Fellow, Motu Economic and Public Policy Research, comments:

“A Climate Commission needs capability, credibility and influence.

“Capability comes with appointing Commissioners with diverse expertise and resourcing them adequately. Credibility is only possible by maintaining independence from government and having clear terms of reference defined in legislation. In addition, we need transparent reporting to Parliament and the public, and a requirement for Commissioners to deliver consensus recommendations.

“The issue of influence is critical. As the PCE’s report rightly points out, ‘There is no easy way to compel governments to act in a way that is consistent with budgets’.  No legislation or commission can – or should – bind future governments. That would undermine democracy and adaptability. Binding future governments is the job of the public. Public support is the fuel that fires cross-party consensus, policy continuity across election cycles, and strategic low-emission investment.

“A Climate Commission will be effective only if it is part of a broader institutional framework integrating technical advice, consensus on goals and strategies, and collaborative action. It will also need to leverage the expertise and resources of the private sector, research institutions and civil society. More thought is needed on coordinating and resourcing these supporting activities inside and outside of government.

“Additional elements of the UK model are noted in the report but not included explicitly in the PCE’s recommendations. For example, New Zealand’s Climate Commission could be tasked with reviewing the government’s progress against targets and budgets, making recommendations on relative mitigation effort across sectors, and advising the government on mitigating emissions outside the usual domain of Paris-style targets, such as international aviation and shipping and, potentially, consumption emissions and emissions embedded in exports. The Climate Commission could also inform investment decisions by delivering advice on the social cost of carbon and target-consistent shadow prices for carbon.

“As New Zealand contemplates design options for a Climate Commission, it should look beyond the UK for useful insights. Australia’s tumultuous experience with its Climate Change Authority and Climate Commission certainly offer food for thought about the perils of politicisation.

“Our political institutions are failing to safeguard the welfare of future generations who will inherit a badly damaged climate system unless we shift urgently toward low-emission development. Implementing an independent Climate Commission that delivers capability, credibility and influence will be an important step in the right direction.”

Professor Jonathan Boston, School of Government, Victoria University of Wellington, comments:

“The recent Report of the Parliamentary Commissioner for the Environment, Simon Upton, on ‘A Zero Carbon Act for New Zealand’ is most welcome. The Report is clear, thorough and compelling, and in my view all nine recommendations make sense and should be supported by the government and parliament.

“The Report builds upon a Report prepared in 2017 by his predecessor, Dr Jan Wright. It reaffirms her view that New Zealand should introduce a long-term policy framework for addressing climate change very similar in nature to the British model.

“Such a framework would include legislation, such as a Carbon Zero Act, which sets a clearly defined long-term emissions-reduction target, establishes an independent expert advisory body (i.e. a Climate Change Commission), requires the periodic setting of medium-term, economy-wide carbon budgets, and obliges the government to respond to the advice of the Commission on targets, budgets and other climate-related policy matters. To be successful, such a framework requires a multi-party agreement on the core elements — a point which Mr Upton correctly underscores.

“With regard to the specific recommendations in the Report of the Parliamentary Commissioner for the Environment:

  1. I agree with his proposal that New Zealand’s long-term emissions-reduction target should be set via a staged process, drawing on the advice of the new Climate Commission;
  2. I agree with his recommendations that the planned Zero Carbon Act should specify the expertise required on the Commission and that there should be cross-party consultation, both on its membership and that of any interim Climate Committee;
  3. I agree with his recommendation that the Commission should have an advisory rather than decision-making role and that all major policy decisions on climate change issues should be the responsibility of the elected government;
  4. I agree with his recommendations regarding the need for the government to act expeditiously following the enactment of a new carbon budget in setting out the policies that will be implemented in order to realise the objectives of the budget (including a requirement to quantify the likely impact of the proposed policy changes on greenhouse gas emissions);
  5. I am open to the suggestion that each carbon budget run for six years rather than five years (as in the UK); and
  6. I agree with the recommendation that the Zero Carbon Act should include a requirement for governments to implement new policy mechanisms with respect to climate change adaptation, such as a national adaptation strategy and regular national-level risk assessments; in my view, the main features of the British model regarding adaptation planning and the provision of policy advice should be followed by New Zealand — this would involve an explicit role for the Climate Commission in providing policy advice and scrutiny of the government’s performance in relation to adaptation matters.”

Associate Professor Bronwyn Hayward, Political Science, University of Canterbury; lead author on the IPCC report on restricting warming to 1.5C, comments:

“The aim of any of any Climate legislation is to provide long-term clarity on policy direction and flexibility of delivery, alongside a way the public can hold their governments to account for making progress.

“A Commission aids parliament and the public because it provides advice on setting carbon budgets (in the UK Government carbon budgets place a limit on the level of economy-wide emissions that can be emitted in five-year periods), and reports regularly to the Parliaments and Assemblies on progress.

“In 2017, I interviewed some of the founding and current members of the UK Climate commission. The Commissioner’s report is helpful in encouraging a wide political support. However, while the Environment Commissioner is right to point out the differences between the situation facing NZ and UK there are still some key issues NZ needs to consider

“One of the striking lessons for me is that a climate commission must be supported by a strong climate act that applies to all major greenhouse gases. It is unfortunate that the NZ Act has been dubbed the Zero ‘Carbon’ Act because the success of the British climate commission is that it has the support of a broad climate act which mandates cuts of 80 per cent to six greenhouse gases by 2050.

“This is particularly important in New Zealand where methane contributes such a significant part of our profile and latest research suggests it is becoming recognised as more problematic policy issue than is possibly even acknowledged in the PCE’s report notes.

“The Commission also needs to be served by a strong secretariat. It’s a mistake to think the Commissioners themselves will do the science, those appointed must be credible significant thought leaders rather than sector advocates. While the PCE is right to point out the diversity on the UK committee, it goes beyond economic voices. The new Paris Agreement requires countries to consider climate emissions in the context of sustainable development and poverty eradication, so having an understanding of issues confronting Māori and Pacific and local communities is also essential.

“But it is better to think of the commissioners as trustees monitoring the quality of the advice and setting the general direction, not doing research themselves. My other basic concern is our pool of senior people who can serve in this way is very small and many of these New Zealanders are already heavily committed internationally, making a strong secretariat more important

“It is also important that any Commission and associated Climate Act does not lock in place any one policy tool. At present, there is still some strong residual support in NZ for example for an Emissions Trading Scheme as a major plank of NZ’s future climate policy. Some of this comes from years of previous investment in expertise in this area but this inertia can make nimble policy shifts harder.

“Governments who rely on a carbon trading scheme are likely to find this tool becomes more and more expensive, if we invest in offshore carbon saving schemes rather than invest in our own greenhouse reductions or becoming a place the world invests in regional development in NZ. There is a significant risk that over the long term the cost of Emission Trading Schemes will undercut gains in other trade areas over so governments must have the flexibility to choose the tools.

“Any Climate Act and Commission will need the scope to take into consideration changing international commitments and domestic climate impacts. As international science changes and our expectations change we need to be able to reflect that in targets, but we also need to face the way that many forms of adaption are also effective methods of mitigating climate change, be they city development or land use change and to draw a hard distinction between policies of adaption and mitigation would lock the climate commission in a straight jacket that could become unhelpful.

“Finally, this Commission and associated Climate Act needs to be enabled more quickly than we appear to be, while we certainly need cross sectors support, New Zealand has experienced decades of delay by some lobby groups, who are adept at advising governments to slow down. This new government has a once in a generation opportunity and a clear mandate and now needs to set out a timetable for action and implement it.”

Associate Professor Ivan Diaz-Rainey, Co-Director, Otago Energy Research Centre, University of Otago, comments:

“I welcome the idea of a Zero Carbon Act and an Independent Climate Commission. I like the tone of this report – it acknowledges the lack of ambition that has defined climate policy in New Zealand over the last two decades or so. It contrasts this with the leadership role that the EU has embraced, which in turn contributed to the UK implementing a Climate Change Act a decade ago.

“The report wisely notes that a Zero Carbon Act and an Independent Climate Commission are stepping stones. Much more is needed and in this respect, I have several concerns:

  • As the report acknowledges, the UK Climate Change Act (CCA) was possible because there was strong cross-party commitment to tackling climate change. I lived through this period in the UK and I am not convinced we have the same level of commitment here in New Zealand today. As the report notes, there has been a reluctance to implement policies that ‘bite’ in New Zealand – this is true of National with their rural electorate, but also true of Labour to date. This means that in New Zealand there is a risk that this legislation might be repealed or watered down by future administrations.
  • The report notes [page 17] that New Zealand is unlikely to be able to implement three carbon budgets in quick succession that yield ‘easy’ emissions reductions. I think here you can substitute the ‘able’ with ‘willing’ – there are plenty of ways NZ with a highly inefficient car fleet, land use policies that have encouraged intensification, large potential for afforestation and a housing stock that has poor levels of insulation, not to mention schools that have coal boilers, could cut emission ‘easily’ but not painlessly with the appropriate policies … this takes me to my third and final point.
  • The Zero Carbon Act and an Independent Climate Commission will tell us where cuts might come from and when – this could help improve NZ ETS (Emissions Trading Scheme) by, for instance, setting hard caps on emissions that reduce through time and are consistent with our Paris commitment and help with planning out to what degree international allowance importation is needed (if at all).  But critically it does not tell us how we are going to get there i.e. the policies needed to achieve them. So it is important work, and it is needed, but it should not be an excuse to stand still any longer – ultimately it is the policies that count.
    The UK is a good example here; despite having the Climate Change Act as a high profile overarching framework, the UK is set to miss its 2020 EU renewables target, while several other EU states without such a framework have already achieved their target and are set to exceed them because they have had a more stable and effective (and, dare I say it, interventionist) policy environment [see ICIS article]. Put bluntly, the UK has been successful in cutting emissions but there are better role models out there for New Zealand.

“The Zero Carbon Act is a good idea but it should not distract from the fact that we need sectoral policies over and above NZ ETS and we need them now. There are ‘easy’ wins but the policies that are needed to achieve them require investment and will challenge established interests. Policies that ‘bite’ are needed and invariably when you push hard there will be some policy mistakes, but this is just the nature of intervention.

“The biggest challenge to climate policy in NZ is not enacting the Zero Carbon Act or establishing a Climate Commission, it is overcoming the non-interventionist ethos that has engulfed Wellington in the last decade or so. There are times for government to be hands-off and let markets get on with it – for sure – but when radical change is need, government needs to be active and willing to step in when markets fail.”

No conflict of interest declared.

Professor Ralph Sims, Director, Centre for Energy Research, Massey University, comments:

“The Government’s proposal to implement a Zero Carbon Act and establish an independent advisory Climate Commission is commendable. Given our annual greenhouse gas emissions have continued on an upward trend, it is long overdue.

“In his first report as Parliamentary Commissioner for the Environment, Simon Upton offers wise advice to Parliament on how best to proceed with these aims. Based on his previous roles as Minister for the Environment (and other portfolios) and Environment Director of the OECD in Paris, he is ideally placed to analyse the lessons to be learned from the UK Climate Act model.

“Due in part to valuable advice received from the UK Climate Change Commission, this legislation has operated successfully in delivering emission reductions since 2008. With its mid-term goals set for every five years out to 2030, it provides some certainty for businesses and investors. However, the PCE report has rightly provided the key differences in energy and agricultural emissions between Britain and New Zealand and related policies that will impact on designing the legislative model to best suit New Zealand.

“To date, New Zealand governments have set several emission reduction targets but without any real guidance on what actions to take in order to meet them. We have relied on the emissions trading scheme but this has had zero impact on reducing emissions to date; forest sinks have provided useful offsets but can only be a temporary measure to buy some time since the available land area for planting more forests is constrained; and purchasing credits from off-shore can only delay the inevitable need to reduce domestic emissions.

“So the sooner we start on setting an ambitious but achievable target for domestic emissions reductions, and identifying the policy measures and cost-effective actions that can be taken in the short-term to help meet it, the better. This appproach is clearly outlined in the PCE report.

“The arguments made to have cross-party agreement for the Act confirms the views of the previous PCE, Dr Jan Wright. Possible roles for the Commission in assisting with this process are proposed along with the mix of expertise required. Surprisingly, the specialized list of expertise required (“climate science, energy and agricultural technology, business and economics, finance and investment, Māori interests, and Te Tiriti o Waitangi”) fails to include a social scientist to cover behavioural changes.

“The need for ‘a very frank appraisal of what near-term emissions reductions are possible’ has already been undertaken in the Royal Society’s 2016 report Transition to a low-carbon economy for New Zealand. The seven-member panel which I chaired, identified a large number of potential mitigation actions for all sectors at low, medium and high costs, although accurate costings were unable to be done since such information was not in the public domain at that time.

“This gap in knowledge has been partly filled by the ‘Transition Hub’ consisting of cross-ministry officials that was established mid-2017 to evaluate the costs and benefits of future climate policies. The key point here, also not addressed well in the PCE report, is the need for the Commission to ensure all co-benefits (such as reduced traffic congestion, noise and local air pollution, improved health, increased productivity on farms) are costed into future analyses of climate policies and measures.

“A key question that remained unanswered in the PCE report is whether the Commission should also look at climate adaptation and risk assessment. The IPCC has two separate Working Groups assessing adaptation and mitigation but there is some overlap. The New Zealand Zero Carbon Act will probably include both.

“However, there will be so much urgent work for the Climate Commission to undertake initially on mitigation efforts in order to meet our international obligations and to catch up with emission reduction actions being taken by many other countries after our relatively slow start, that adaptation and resilience issues could best be left to the existing Climate Change Adaptation Technical Working Group hosted by the Ministry for the Envrionment.”