New Zealand

Climate Change Response (Zero Carbon) Amendment Act (amending the Climate Change Response Act 2002)

Legislative
Law
Mitigation Framework
Passed in 2002
The Climate Change Response Act 2002 established an institutional and legal framework for New Zealand to ratify and meet its obligations and the Kyoto Protocol and the United Nations Framework Convention on Climate Change. To this end, the Act authorised the Minister of Finance to manage New Zealand’s holdings of units for GHG emissions under the Kyoto Protocol and to trade them on international carbon markets. Furthermore, the Act designated a national inventory agency. The Agency is charged with recording and reporting information relating to GHG emissions in accordance with New Zealand’s international requirements.

The Act has been amended numerous times, most recently by the Climate Change Response (Zero Carbon) Amendment Act in November 2019: The Zero Carbon amendment sets a target to reduce net carbon emissions to zero by 2050. It also sets targets for biogenic methane emissions (from agriculture and waste) - 10% by 2030 (compared with 2017 levels), and 24%-47% reduction by 2050 (compared with 2017 levels). 5 year rolling carbon budgets are set, and obligations set to monitor meeting of those budgets. By 2024, a review will be carried out with regards to inclusion of emissions from international shipping and aviation in the 2050 target. The amendment mandates carrying out a periodic national climate risk assessment, and sets obligations on government to follow every assessment with a national adaptation plan. The amendment establishes a Climate Change Commission which serves an an independent advisory board to government. The Commission's role is to provide independent, expert advice to the Government mitigation and adaptation, and to monitor and review the Government’s progress towards its emissions reduction and adaptation goals. The Zero Carbon amendment sets consulting obligations with Māori and iwi leadership bodies under the obligations of the Treaty of Waitangi on multiple aspects of the law. Previous amendments: The Climate Change Response (Unit Restriction) Amendment Act 2014 ensures that only domestic emission units within the NZ ETS can be surrendered by participants when deregistering post-1989 forest land from the NZ ETS. The intent is to remove the opportunity to arbitrage units by registering and deregistering the same piece of post-1989 forest land from the NZ ETS multiple times.

The Climate Change Response (Emissions Trading and Other Matters) Amendment Act 2012 maintains the costs that the NZ ETS places on the economy at current levels. Essentially, the 2012 amendments prolong the transitional measures introduced in 2009: non-forestry obligations remain at one emission unit for two tonnes of actual emissions, there is no phase-out of free allocations, and the unit price is capped at NZD 25 (USD 19.65). The most significant change however is that agriculture will not have to surrender obligations from 2015. The Climate Change Response Amendment Act 2011 made several changes to the administrative functions of the Climate Change Response Act 2002, such as the functions of the chief executive of the Environmental Protection Authority, the appointment of enforcement officers, and the obligation to maintain confidentiality. The Climate Change Response (Moderated Emissions Trading) Amendment Act 2009 made several important changes aimed at modifying New Zealand’s emissions trading scheme, including delaying the participation of the agriculture sector in the NZ ETS until 1 January 2015, and that additional allocations of emission certificates will be given to the agriculture sector on an intensity basis. They will be phased out at 1.3 percent rate starting from 2016. The Act also stated that additional allocations of emission certificates will be given to emissions-intensive, trade-exposed industries. The Climate Change Response (Emissions Trading Forestry Sector) Amendment Act 2009 made technical amendments to the forestry sector’s participation in the NZ ETS, specifically, giving the Minister in charge the ability to withdraw or suspend draft allocation plans, and changing the timeframes for the surrender of units in relation to pre-1990 forest land activities. The Climate Change Response (Emissions Trading) Amendment Act 2008 amended the Climate Change Response Act 2002 to introduce a GHG emissions trading scheme in New Zealand (known as the NZ ETS). The Department of Inland Revenue specifies how the Climate Change Response Act amends the Income Tax Act 2004, the Income Tax Act 2007, and the Goods and Services Tax Act 1985 (GST Act) to cover the income tax consequences to the forestry sector and the GST consequences to all sectors of transactions in emissions units. The Climate Change Response Amendment Act 2006 made numerous small changes to the 2002 Climate Change Response Act such as identifying an expiry period for both temporary and long-term certified emission reduction units, allowing the Governor General to make regulations establishing forest sink covenants, and adding principles of cost recovery such as via levies or fees.

The Climate Change Response (Unit Restriction) Amendment Act 2014 ensures that only domestic emission units within the NZ ETS can be surrendered by participants when deregistering post-1989 forest land from the NZ ETS. The intent is to remove the opportunity to arbitrage units by registering and deregistering the same piece of post-1989 forest land from the NZ ETS multiple times.

The Climate Change Response (Emissions Trading and Other Matters) Amendment Act 2012 maintains the costs that the NZ ETS places on the economy at current levels. Essentially, the 2012 amendments prolong the transitional measures introduced in 2009: non-forestry obligations remain at one emission unit for two tonnes of actual emissions, there is no phase-out of free allocations, and the unit price is capped at NZD 25 (USD 19.65). The most significant change however is that agriculture will not have to surrender obligations from 2015.

The Climate Change Response Amendment Act 2011 made several changes to the administrative functions of the Climate Change Response Act 2002, such as the functions of the chief executive of the Environmental Protection Authority, the appointment of enforcement officers, and the obligation to maintain confidentiality.

The Climate Change Response (Moderated Emissions Trading) Amendment Act 2009 made several important changes aimed at modifying New Zealand's emissions trading scheme, including delaying the participation of the agriculture sector in the NZ ETS until 1 January 2015, and that additional allocations of emission certificates will be given to the agriculture sector on an intensity basis. They will be phased out at 1.3 percent rate starting from 2016. The Act also stated that additional allocations of emission certificates will be given to emissions-intensive, trade-exposed industries.

The Climate Change Response (Emissions Trading Forestry Sector) Amendment Act 2009 made technical amendments to the forestry sector's participation in the NZ ETS, specifically, giving the Minister in charge the ability to withdraw or suspend draft allocation plans, and changing the timeframes for the surrender of units in relation to pre-1990 forest land activities.

The Climate Change Response (Emissions Trading) Amendment Act 2008 amended the Climate Change Response Act 2002 to introduce a GHG emissions trading scheme in New Zealand (known as the NZ ETS). The Department of Inland Revenue specifies how the Climate Change Response Act amends the Income Tax Act 2004, the Income Tax Act 2007, and the Goods and Services Tax Act 1985 (GST Act) to cover the income tax consequences to the forestry sector and the GST consequences to all sectors of transactions in emissions units.

The Climate Change Response Amendment Act 2006 made numerous small changes to the 2002 Climate Change Response Act such as identifying an expiry period for both temporary and long-term certified emission reduction units, allowing the Governor General to make regulations establishing forest sink covenants, and adding principles of cost recovery such as via levies or fees.

On June 22nd, 2020, the Emissions Trading Reform Amendment Act was passed amend the 2002 Act. This amendment puts a cap on the existing trading scheme and aims at improving certainty for businesses, making the Emissions Trading Scheme more accessible, and improving its administration.

Documents
  • Net accounting emissions of greenhouse gases in a calendar year, other than biogenic methane, are zero by the calendar year beginning on 1 January 2050 and for each subsequent calendar year
    Economy-wide | Base year target | Target year: 2050 | Base year:
  • Emissions of biogenic methane in a calendar year—
    (i)are 10% less than 2017 emissions by the calendar year beginning on 1 January 2030; and
    (ii)are 24% to 47% less than 2017 emissions by the calendar year beginning on 1 January 2050 and for each subsequent calendar year.
    Economy-wide | Base year target | Target year: 2030 | Base year: 2017
Related litigation cases
  • Mataatua District Maori Council v. New Zealand

    Opened in 2017 Case filed

    Representatives of the Mataatua District Maori Council have filed a claim and supporting memorandum in the Waitangi Tribunal, the forum where disputes over the performance of the Waitangi Treaty between the Maori and the government of New Zealand are heard and resolved. 
     
    The claimants allege that New Zealand has breached its obligations to the Maori by failing to implement policies that will address climate change. Upon learning from the Tribunal Registry that the claim would be heard after 2020, the claimants filed an urgency application requesting an earlier hearing. 
     
    That application seeks the following forms of relief: - a declaration from the Tribunal that the government has breached its treaty obligations; - a recommendation that New Zealand revise its emissions reduction targets upward to a level that corresponds with keeping the global concentration of greenhouse gas (GHG) emissions below 450ppm”the level that corresponds with the 2°C threshold that demarcates a stable climate from a potentially unstable one; - a recommendation that New Zealand adopt different mitigation policies, including the restructuring or replacement of its Emissions Trading Scheme; - a recommendation that New Zealand adopt policies that facilitate adaptation in ways specific to locations and resources relied upon by the Maori. 
     
    It bases these requests for relief on several points of fact and law. The most basic of these is the relationship between sources of GHG emissions and climate changes, and the relationship between climate change and various adverse impacts on locations and resources relied upon by the Maori for physical and cultural purposes. The application also points out that New Zealand's Nationally Determined Contribution, submitted following the Paris Climate Conference in 2015, committed the country to reduce emissions by 11% relative to 1990 levels by 2030. It contrasts this target with the increase of GHG emissions in New Zealand of 24.1% relative to their 1990 levels by 2015 and the current expectation that they will increase to 30% increase by 2020. 
     
    Further facts noted in the application include that New Zealand's government encourages oil and gas exploration, controls an entity that mines coal, and controls another entity that is responsible for much of the recent conversion of forests to dairy farms. Having described the factual basis that links government policies adverse climate impacts, the claimants then point out that provisions of the Waitangi Treaty make the government responsible for the "active protection" of natural resources such as forests and fisheries on behalf of the Maori. In characterizing that violation, the claimants quote from the recent decision in Juliana v. United States regarding the public trust doctrine and characterize that reasoning as relevant to their claim.

  • Thomson v. Minister for Climate Change Issues (High Court of New Zealand, Wellington, filed 10 Nov. 2015)

    Opened in 2015 Case opened

    Sarah Thomson, a New Zealand law student, filed a Statement of Claim in 2015 against New Zealand’s Minister of Climate Change Issues alleging that the Minister had failed in several respects regarding the setting of greenhouse gas emissions reduction targets required by New Zealand’s Climate Change Response Act of 2002. That Act implements New Zealand’s responsibilities as a ratifying Annex I member of the United Nations Framework Convention on Climate Change (UNFCCC). It requires the Minister to set an emissions reduction target in keeping with the statements of the Intergovernmental Panel on Climate Change (IPCC), and to consider whether to revise that target as the IPCC issues updated findings. In March 2011, pursuant to the 2002 Act, the Minister had set a target of 50% reduction from 1990 greenhouse gas (GHG) emissions levels by 2050. The Minister did not review or revise that target following the 2014 issuance of the IPCC’s Fifth Assessment Report. In July 2015, in advance of the 21st Conference of the Parties to the UNFCCC in Paris, the Minister submitted New Zealand’s intended nationally determined contribution (INDC)--and then subsequently a nationally determined contribution (NDC)--consistent with a “provisional target” of only 30% reduction from 2005 levels by 2030. As Thomson's Statement of Claim noted, “this equates to a reduction of 11% below New Zealand’s 1990 emission levels by 2030,” and thus “will not, if adopted by other developed countries in combination with appropriate targets set by developing countries, stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.” Thus Thompson challenged both the target set pursuant to the 2002 law and the target set as part of New Zealand's NDC pursuant to the United National Convention on Climate Change and the Paris Agreement, both ratified by New Zealand.

    The High Court of New Zealand issued its decision after the 2017 election had ousted the prior government, replacing it with a government whose members had campaigned on a commitment to eliminate all GHG emissions by 2050. Nonetheless, the court reviewed both the 2030 and 2050 targets set by the prior government's Minister and ruled on their legality. With respect to the 2050 target, the court determined that although the Minister had discretion under the 2002 act to review and determine New Zealand's emissions reduction target for 2050, that discretion was limited by the act's purpose and by the evidence contained in IPCC Fifth Assessment Report (AR5), both of which argued strongly for a lower national emissions target than the one set based on the IPCC's Fourth Assessment Report (AR4). However, because it was not clear that a review of the 2050 target in light of AR5 would certainly have led to the target's revision, and because the question was largely mooted by the recent election ("[s]uch a declaration would now be of historic interest only"), the court concluded merely that the Minister should have reviewed the target, but not that a decision to maintain the existing target after such a review would necessarily have been unlawful. With respect to the 2030 target in New Zealand's INDC and NDC, the court determined that it had authority to review the Minister's setting of that target but no grounds for invalidating it because the Minister had not made “any reviewable error for which the Court may intervene.” 

    Regarding the authority of the courts to review climate change policy, the decision noted:

    "It may be appropriate for domestic courts to play a role in Government decision making about climate change policy . . . The courts have not considered the entire subject matter is a “no go” area, whether because the state had entered into international obligations, or because the problem is a global one and one country’s efforts alone cannot prevent harm to that country’s people and their environment, or because the Government’s response involves the weighing of social, economic and political factors, or because of the complexity of the science. The courts have recognised the significance of the issue for the planet and its inhabitants and that those within the court’s jurisdiction are necessarily amongst all who are affected by inadequate efforts to respond to climate change. The various domestic courts have held they have a proper role to play in Government decision making on this topic, while emphasising that there are constitutional limits in how far that role may extend. The IPCC reports provide a factual basis on which decisions can be made. Remedies are fashioned to ensure appropriate action is taken while leaving the policy choices about the content of that action to the appropriate state body."

from the Grantham Research Institute
from the Grantham Research Institute
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