New Zealand

The updated NDC target is stronger than the previous target by 24%. While this moves the rating of the target against modelled pathways from “Insufficient” to “Almost Sufficient” and against fair share from “Critically Insufficient” to “Insufficient”, it does not change the overall CAT rating of “Highly Insufficient”.

Our revised rating does not take into consideration the government’s October 2021 announced increase in international climate finance. Therefore, our rating is based on the fair share target, not the full fair share contribution. New Zealand’s rating may change after we assess the new climate finance commitment.

New Zealand’s first NDC set a target of 30% below 2005 by 2030 including LULUCF. In April 2020, New Zealand submitted an NDC update that did not contain a stronger 2030 economy-wide target and only hinted that such an update could come in 2021 based on scientific advice requested by the government about whether the current NDC target is consistent with the Paris Agreement’s 1.5°C limit.

In November 2021, New Zealand submitted its new target, but it is still not consistent with the Paris Agreement’s 1.5°C limit.

The new target equates to around 51 MtCO₂e/yr by 2030 excluding LULUCF. This is equivalent to 21% below 1990 levels by 2030. A fair share target would require New Zealand to nearly halve this target to 31 MtCO₂e/yr by 2030, or 47 MtCO₂e/yr for a 1.5°C modelled domestic pathway.

New Zealand will not meet the updated NDC under current policies and actions. At present, current policies and actions, rated “Highly insufficient”, will lead to 78 MtCO₂e by 2030. New Zealand would need to enact further policies to reduce emissions by a further 34% in 2030. New Zealand has said in its NDC that it intends to buy international credits to meet its target. This could be up to two thirds of its target - or around 100 MtCO₂e.

The New Zealand government proposes two accounting steps.

First, the new target, like the previous target, sets the allowed net emissions in 2030 (emissions of energy industry plus removals from forestry) as a percentage of its 2005 gross emissions (emissions without the removals by forests). Because forests removed CO₂ from the atmosphere in 2005, gross emissions in 2005 (without these removals) are substantially higher (44%) than net emissions. The target is therefore not cutting emissions by 50% but an effective reduction for net emissions of 28% below 2005 levels by 2030. The use of this “gross-net” approach raises many questions in terms of the environmental integrity of the target.

The second step in the government’s accounting approach is to use the different accounting boundaries for forests under the Kyoto Protocol and the UNFCCC. They use the projected 2030 Kyoto land-use accounting for the 2030 carbon sequestration to generate what it calls “Target accounting emissions”. Because the 2030 Kyoto sink projection is about 3.6 MtCO₂ larger than the projected UNFCCCC LULUCF, this adds to the government’s allowed target emissions in 2030. This reduces the effective target in 2030 by about 6.3 percentage points to a 21.6% reduction only.

As the NZ Government accounting approach overestimates land use sequestration in 2030 compared to the UNFCCC LULUCF, it results in allowing higher actual net emissions in 2030.

In addition, the Government has defined its target using AR5 global warming potentials, whereas its emissions are in AR4 global warming potentials, giving a slightly higher weighting to methane, which essentially adds to the allowed emissions in 2030.

While the target is expressed as a ‘point in time’ target, the announcement indicates New Zealand will manage its NDC as a multi-year emissions budget of 571 MtCO₂e for 2021-2030, which has also raised questions as it is unclear how it relates to the target.

In 2019, New Zealand adopted its Zero Carbon Act, a good step forward. The legislation enshrined the country’s 2050 net zero emission reduction target into law (with a separate target for biogenic methane emissions, which represent close to 40% of New Zealand’s current emissions) and established an independent Climate Change Commission to provide advice to government on the transition to a low-emissions economy.

The Minister for Climate Change requested the Commission to provide advice on whether and how the NDC should be changed to make it consistent with 1.5°C. The Commission recommended a target of “much more than 36%”. The recommendations have led to the recent NDC update, yet the NDC is not 1.5°C compatible.

Lawyers for Climate Action New Zealand is currently seeking judicial review of the Commission’s recommendations, to be heard early in the new year.

Target emissions levels were calculated from New Zealand’s Greenhouse Gas Inventory 1990-2019.

New Zealand uses a gross-net approach. A gross-net approach is when a Party does not include the LULUCF sector in its base year (gross) but accounts for net emissions and removals from LULUCF for the target year (net). Such an approach is a logical and categorical error. In the year 2005, New Zealand had a LULUCF carbon sink of 25 MtCO₂e. However, New Zealand has chosen to exclude the carbon sink to ensure a higher baseline to apply the 50% reduction from 2005 levels. New Zealand then includes the LULUCF carbon sink in the target year 2030, which allows for higher emissions elsewhere in the economy.

For the 2030 pledge, the CAT has estimated levels of emissions excl. LULUCF resulting from the NDC by subtracting Kyoto Protocol forestry activity emissions in 2030 taken from government projections from the NDC target level.