With all the buzz around carbon emissions and climate change in the news, you are probably wondering how exactly the upcoming Zero Carbon Bill will affect you and your organisation.
Well we can’t be exactly sure about what will happen until the bill is released in October this year (2018) but after a review of the progress thus far, we can make a few predictions that will help you prepare for it.
First let’s have a quick look at where this Zero Carbon Bill originated from…
New Zealand is committed to reducing its greenhouse gas emissions (GHG), as part of the Paris Agreement under the United Nations Framework Convention on Climate Change.
Under this agreement New Zealand must reduce its emissions to 30% below 2005 levels (11% below 1990 levels) by 2030.
New Zealand has also stated it will reduce its emissions to 50% below 1990 levels by 2050.
Since implementing the Emissions Trading Scheme (ETS) in 2008, New Zealand’s GHG emissions have not decreased (as expected) but instead our GHG emissions have risen each and every year since the end of the recession.
*Note: Emissions targets are set by using net target emissions
More graphs on NZ's emissions: https://emissionstracker.mfe.govt.nz
More info on emissions targets & reporting: https://www.mfe.govt.nz/node/20725/
In May 2017, before the 2017 elections, the National led government asked the Productivity Commission to identify how New Zealand could maximise the opportunities and minimise the costs and risks of transitioning to a lower net-emissions economy.
In late 2017, New Zealand went into Parliamentary Elections that ultimately saw the formation of a Labour led Coalition Government (with coalition partners NZ First and Greens). This newly formed coalition avowed action on climate change.
As part of the Green Party Confidence and Supply Agreement with the Labour Party, it established a Policy Programme that includes the following key agenda items:
The implementation of the United Nations' 17 Sustainable Development Goals
The adoption of policy to progress the goal of a Net Zero Emissions Economy by 2050. In support of this will be the establishment of an independent Climate Commission and the passing of a Zero Carbon Bill.
Productivity Commission Draft Report
On the 28th of April, the Productivity Commission finally released its draft ‘low-emissions economy' report which outlined the need for policy changes to drive an effective transition.
The report states that “New Zealand has had climate mitigation policies in place for some time, such as the New Zealand Emissions Trading Scheme (NZ ETS). Yet these policies have not lowered emissions. Without more ambitious policies that endure over the long haul, New Zealand will not successfully transition.”
The report covers 4 essential elements to ensure a successful transition to a low-emissions economy:
Getting emissions pricing right, to send the right signals to motivate investment in low emissions technologies and processes;
Harnessing the full potential of innovation and supporting investment in low-emissions activities and technologies;
Creating laws and institutions that endure over time and act as a commitment device for future Governments; and
Ensuring other supportive regulations and policies are in place (including to encourage an inclusive transition).
The report consistently references UK climate change policy, a strong indicator that we can expect many elements of the Zero Carbon Bill to follow what has been implemented in the UK.
Under the laws and institutions section there are recommendations such as introducing mandatory GHG emissions reporting and financial disclosures about climate risk for all sectors.
The report states that “Legislation should include clear reporting obligations, including requiring regular reporting to Parliament”.
What Will Be In The Zero Carbon Bill?
If we are to assume that the reporting requirements of the Zero Carbon Bill is to follow UK climate change policy, then we can expect annual sustainability reports (including GHG emission reporting in accordance with ISO14064) will first become mandatory for companies trading on the NZX and all public sector organisations.
The bottom line is…