This Will Change Your Life – Budgets
How are your budgeting skills?
From next year, you, your business and that of your clients will all need to operate within a budget; a national budget that measures the carbon your activities emit.
Statute requires the Minister of Climate Change to have 3 carbon emissions budgets in place by the end of this year. They will cover the period to 2035. The Climate Change Response Act 2002 imposes the obligation. Further budgets for later periods will follow as we progress to zero carbon emissions by 2050.
These budgets will reflect the amount of greenhouse gases that can be released by New Zealand over consecutive 5 year periods while enabling us to meet our Paris Agreement commitments. Working and living within the budgets will change the way you live.
The Climate Change Commission is an independent body tasked by the Climate Change Response Act “to provide independent expert advice to Government on mitigating climate change (including through reducing emissions of greenhouse gases) and adapting to the effects of climate change;” and to “monitor and review the Government’s progress towards its emissions reduction and adaption goals.”
They have recently released the first draft report of such advice with a view to supporting the Government’s statutory obligations around carbon emission budgets. The proposals set out will impact business (yours and your clients’) and ought to be accounted for in your own, legal advice and planning. As it says in the report “Meeting our proposed emissions budgets and 2050 targets requires transformational change across all sectors of the economy.” Taking heed of what is expected will enable foresight and better planning. The report provides information that can be used as a building block for action, but it also provides a means to better understand likely political decisions.
Undoubtedly the budgets are blunt tools, but they are supported by practical advice about implementation. To be practical tools they will also need to account for what is technically and economically feasible. Having budgets that support just transitions and strong, stable, predictable policy to enable the requisite changes, makes it easier for businesses and individuals to take appropriate action. Interestingly the Commission anticipates that the overall cost of meeting the emissions budget is less than 1% of projected annual GDP.
Remember the End Game
The Paris Agreement requires signatories to “keep the global average temperature well below 2 degrees Celsius above pre-industrial levels while pursuing efforts to limit the temperature increase to 1.5 degrees Celsius”
In New Zealand we have said we will do this by reducing greenhouse gas emissions to 30% below 2005 levels by 2030. That is in our Nationally Determined Contribution, our NDC. (That goal is not actually sufficient to meet our Paris Agreement obligations, but more on that in the report.)
As a lawyer I struggle with the wording of our NDC goals. The imprecision of language rankles, and I struggle to give practical meaning to the requirements. But as a citizen I don’t care much about the detail, I just know the goals require behavioural change, transformational change. I don’t know what emissions I caused in 2005, so instead, to try and personally make some sense of the goal, I think about it in the context of what I do today – what I have to do to reduce the emissions I currently produce by 30%. It encourages me to leave my car in the garage, ask retailers about their sustainability policy, and waste less food for example.
The Advice
So here are some of the issues address by the Commission in its consultation paper that might impact on you, your business and that of your property clients. In a nutshell, they are about removing our reliance on fossil fuels and they require immediate action. Many of the proposals centre around transport and electricity generation. Many impact on the way we use our buildings and our land, and as a consequence what products our property developers might sell:
Government must establish an integrated national transport network to reduce travel in private cars, this is likely to include encouragement to work from home, the incorporation of infrastructure for alternative transport into planning requirements and planning for compact communities
Within the next 6 years 50% of all light vehicles imported into New Zealand need to be electric
No light vehicles with an internal combustion engine are to be imported after 2032
Fiscal incentives and other schemes should be used to make the change to electric vehicles accessible - which may include tax incentives, lease schemes, shared vehicle arrangements (requirements that could conceivably be part of subdivision consent conditions), emissions targets for imported vehicles
Rail is to be electrified and freight transportation moved from road to rail and coastal shipping
Within the next 9 years there is to be no coal used in commercial or public buildings
All new heating and hot water systems installed after 2025 must be electric or biomass powered
From 2030 coal heating and hot water systems in existing buildings must be phased out
Our homes must be built to be 35% more energy efficient than they currently are
We must reduce our current use of natural gas - with hospitality businesses and other users expected to replace existing natural gas appliances with lower emission technologies as they wear out
By 2035 we need to have increased our electricity generation by 20% to meet our energy needs, foreshadowing a significant expansion of solar, wind and biomass generation
Each year we must plant 25,000 hectares of native bush
No native deforestation after 2025
Over the next 9 years dairy, beef and sheep animal numbers must reduce by 15%
Waste generation must decrease significantly
The amount of organic waste sent to landfills must reduce by at least 23%
Government policy to achieve these initiatives must be clear and predictable so businesses and households can plan, must include market incentives to influence choice, and must be reflected in regulation, education, planning and investment generally
By the end of 2023 Government should have established an “Equitable Transitions Strategy” to enable identification of communities particularly affected by the change and to create a workforce with skills relevant to the low emissions economy.
There is much more detail in the 188 pages of the consultation paper. I have cherry-picked the issues that in my view might pique the interest of a property lawyer with an eye to the future. Submissions close on 14 March 2021. Do have your say.
© Debra Dorrington 2021.