Climate Change Response (Zero Carbon) Amendment Act (amending the Climate Change Response Act 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, including by the Climate Change Response (Zero Carbon) Amendment Act in November 2019. The Zero Carbon Amendment Act 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.

Other notable amendments: On June 22nd, 2020, the Emissions Trading Reform Amendment Act was passed to amend the 2002 Act. This amendment reforms the existing trading scheme created by the 2008 Amendment to the Act. The Amendment aims at improving certainty for businesses, making the Emissions Trading Scheme more accessible, and improving its administration. It also allows for the phase down of industrial allocation from 2021 with greater reductions from 2030.

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.