New Zealand

New Zealand submitted its updated NDC in November 2021, increasing its net emissions reduction target to 50% below gross 2005 levels by 2030 including LULUCF. We estimate that the emissions level excluding LULUCF targeted by the NDC is 51 MtCO₂e in 2030.

New Zealand is in the small group of countries still using a gross - net approach for its emissions projections, despite wide criticism in terms of the environmental integrity of the target (Rocha et al. 2015). New Zealand excludes LULUCF emissions in the base year (2005) but accounts for them in the target year (2030) (see Assumptions section). While the update strengthens the country’s 2030 target, the effect is nowhere near a 50% reduction, as the government has deployed misleading accounting methods that more than halve its effective reduction in net emissions to 22% below 2005 levels by 2030.

New Zealand passed its Zero Carbon amendment to the Climate Change Response Act in 2019, which sets a target for all greenhouse gases except for biogenic methane – methane from agriculture and waste – to reach net zero by 2050.

The methodology the Climate Change Commission used to calculate emissions required for a 1.5°C pathway for 2030 and 2050 in relation to the NDC update was challenged in a judicial review to the High Court in February 2022 (Wannan 2022a). However, the High Court rejected the claim, and in its November 2022 judgment, ruled that the Act does not impose any legally binding obligation on the government to set an emissions budget compatible with the 1.5°C temperature limit (Daalder 2022).

The New Zealand Government plans to meet its NDC target through a combination of domestic emissions reductions, use of market mechanisms to purchase international offsets, and removal of carbon dioxide by forest offsets (New Zealand Government 2021a). Legislation reforms have ruled out using emissions carryover under the Kyoto Protocol period to meet the NDC (New Zealand Government 2020b).

New Zealand’s current NDC target is around 19 MtCO₂e away from its 1.5°C compatible fair share range of CAT and is rated “Insufficient”. When assuming the entire target will be achieved domestically (which is not the case), the rating is “Almost sufficient”. This implies that not only does New Zealand need to strengthen that target slightly but to achieve the entire target through domestic reductions, it also needs to support reductions to achieve its fair share.

The gap between New Zealand’s 1.5˚C compatible domestic target and fair share contribution is around 15 MtCO₂e which is similar to the offshore abatement government plans to use to meet NDC target (Ministry for the Environment 2022a). The amount of carbon market credits New Zealand is considering would allow the country to close its fair share gap. However, for 1.5˚C compatibility, the government needs to achieve and exceed its current NDC target through domestic reductions alone, which is not the current plan.

In its updated NDC New Zealand increased its emissions reduction target to 50% below 2005 level including LULUCF emissions, from the previous target of 30%. The updated NDC target is stronger than the previous target by 20 percentage points. This moves the rating of the target against modelled pathways from “Insufficient” to “Almost sufficient” and against fair share from “Critically insufficient” to “Insufficient”.

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.

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 595 MtCO₂e (AR5) for 2022-2035, which has also raised questions as it is unclear how it relates to the target (Ministry for the Environment 2022c).

* Before September 2021, all CAT ratings were based exclusively on fair share and only assessed a country’s target.

Analysis of earlier NDC developments

• 22 April 2020: New Zealand commits to no new climate action in Earth Day NDC update
• 12 November 2021: New Zealand submitted a stronger NDC target

New Zealand’s NDC target in 2030 is not consistent with limiting warming to 1.5°C when compared to modelled domestic pathways. The target aims for GHG emissions to be 50% below 2005 levels by 2030 (including LULUCF).

The new target equates to around 51 MtCO₂e/yr by 2030 excluding LULUCF. This is equivalent to 21% below 1990 levels by 2030. New Zealand needs to bring down its emissions level to 47 MtCO₂e/yr for a 1.5°C modelled domestic pathway. We rate this target as “Almost sufficient”, moving up from previous rating of “Insufficient”.

The CAT calculates a 1.5°C domestic emissions pathway for New Zealand is 44% below 2005 emissions in 2030 (excluding LULUCF).

This rating indicates that New Zealand’s emissions in 2030 are not yet consistent with limiting warming to 1.5°C but could be, with moderate improvements. If all countries were to follow a similar approach, warming could be held below—but not well below—2°C.

We rate New Zealand’s NDC target as “Insufficient” when compared with its fair share emissions allocation. The “Insufficient” rating indicates that New Zealand’s emissions in 2030 needs substantial improvements to be consistent with limiting warming to 1.5°C. New Zealand’s target is at the least stringent end of what would be a fair share of global effort and is not consistent with limiting warming to 1.5°C unless other countries make much deeper reductions and comparably greater effort. If all countries were to follow similar approach, warming would reach over 2°C and up to 3°C.

With the 2021 update in its NDC New Zealand’s fair share rating has improved from “Critically Insufficient” to “Insufficient”. A fair share target would require New Zealand to nearly halve this target to 32 MtCO₂e/yr by 2030

New Zealand’s NDC target would need to be 37% lower to be a 1.5°C compatible in terms of New Zealand’s fair share. The current target is equivalent to 51 MtCO₂e in 2030 where as a 1.5°C compatible fair share target would be around 32 MtCO₂e. Substantial improvement is needed. Some of these improvements should be made to the domestic emissions target itself, others could come in the form of additional support for emissions reductions achieved in developing countries in the form of finance.

Taking both New Zealand’s emissions reduction target and climate finance into account, we rate the overall fair share contribution as “Insufficient”.

New Zealand’s international public climate finance contributions are rated “Highly insufficient.” The country remains committed to climate finance in the period post-2020 but contributions to date have been very low compared to its fair share. To improve its rating New Zealand needs to improve climate finance commitments and make explicit commitments to prevent investments in fossil fuel finance abroad.

Reported contributions fall short of New Zealand’s fair share contribution to the USD 100bn goal and show no clear trend of increasing. A big disbursement in 2014 distorts the trend. Annual contributions with climate as the main component have been less than a third of 2014 values – but have increased in recent years.

New Zealand expects to meet its commitment to deliver a total of NZD 1.3bn in climate finance between 2022 and 2025, but this target is still insufficient. The 2022 budget allocated NZD 840m for international climate finance in addition to pre-commitments (New Zealand Ministry of Foreign Affairs and Trade 2022a). During COP27, New Zealand announced that it would contribute NZD 15m of this climate finance to the Adaptation Fund and a NZD 20m contribution to Loss and Damage (New Zealand Government 2022g; 2022e).

New Zealand does not finance fossil projects overseas. New Zealand signed the COP26 statement to end public support to fossil fuels abroad (CNN 2021).

In April 2021, New Zealand passed legislation which mandates climate risk reporting for banks, asset managers, and insurers, making it the first country in the world to implement such mandatory climate risk reporting. Financial institutions are required to annually report on governance, risk management as well as strategies for climate change mitigation.

Further information on how the CAT rates countries (against modelled domestic pathways and fair share) can be found here .

We evaluate New Zealand' net zero target as: Poor.

New Zealand passed its Climate Change Response (Zero Carbon) Amendment Act in 2019, which sets a target for all greenhouse gases except for biogenic methane – methane from agriculture and waste – to reach net zero by 2050 (Government of New Zealand 2019a). There is a separate target for biogenic methane emissions to be 24-47% below 2017 levels by 2050. The minister of climate change has recommended moving to an all gas net zero target, but the government has not yet acted on this recommendation.

In November 2021, New Zealand submitted its Long Term Low Emissions Development Strategy (LTS) to UNFCCC (Ministry for the Environment 2021e). In the LTS, the government has presented a framework for net zero target including five year review cycles with corresponding emissions budgets. The LTS has identified action areas for key sectors without going into details of the emissions reduction potential of those strategies.

New Zealand’s net zero target performs poorly in terms of its scope, target architecture and transparency. While the target architecture of New Zealand’s net zero target is relatively strong, it does not follow good practice on a number of elements. In addition to biogenic methane, international aviation and shipping also remain outside the target’s scope, and the government’s reserving of the right to use international offset credits to meet its net zero target in the case of a significant change of circumstance (New Zealand Government 2020a).

The full net zero target analysis can be found here.

In brief, New Zealand has an unconditional target of reducing emissions 5% below 1990 by 2020, and a conditional target of 10 to 20% below 1990 emissions levels by 2020. The CAT calculates the unconditional target is calculated to be 62 MtCO₂e in 2020 excluding LULUCF and the conditional target to be 52-59 MtCO₂e excluding LULUCF.

With emissions at 79 MtCO₂e (excl. LULUCF) in 2020, New Zealand did not meet its 2020 pledge (Ministry for the Environment 2022g). For more details on New Zealand's 2020 target, please see the 2020 pledge section here.