Climate Change and the Construction Industry: Shaping the Emissions Reduction Plan

New Zealand’s first emissions reduction plan (ERP) is due to be published in May 2022.

The ERP will identify how New Zealand will meet its budgets for permitted quantities of greenhouse gases.

The Government released a discussion document[1] on 13 October 2021 outlining policies which may be included in the ERP.  It seeks to identify:

  • What businesses and organisations can do to reduce emissions, and what support they need from Government to achieve that goal.
  • Whether the shift to a low-emissions economy will affect some groups more than others, and what can be done to make the transition equitable.

The discussion document focuses on five key sectors that will be addressed in the ERP, including building and construction. 

Building and construction strategy

The strategy for the building and construction sector relies on the Building for Climate Change frameworks (see our summary here), which:

  • Encourage the design and construction of durable, energy-efficient buildings made of low-carbon recyclable materials by introducing caps on embodied carbon into the building consent process.   
  • Set mandatory caps on operational emissions (energy and water use in buildings).

The frameworks will initially apply to new buildings, but will extend over time to retrofits and refurbishments.  MBIE has also consulted on changes to the Building Code which are intended to support higher-density housing and improve energy efficiency in buildings. 

In addition to sector-specific policies, the discussion document has overarching policy themes which affect the building and construction sector. 

Where will we build?

A key theme is reduced reliance on private vehicles, and support for walking, cycling and public transport. 

For building and construction, this means more medium and high-density development and mixed-use centres.  Priority will be given to urban development along existing or planned public transport routes.  

Labour and National have announced a bipartisan plan to permit medium-density housing on all residential land in Auckland, Hamilton, Tauranga, Wellington and Christchurch.  Housing which fits the criteria will not require resource consent.  Legislation implementing this plan may be passed next year. 

Work is already underway to repeal and replace the Resource Management Act with legislation intended to coordinate responses to climate change risks between different levels of government and mana whenua.  The legislation will address issues associated with managed retreat from land threatened by climate-related hazards (such as rising sea levels).

What will be built? 


Street space will be reallocated for public transport, pedestrians, cycles and scooters.  Connected cycleways will be built and traffic-calming measures rolled out.  Auckland will see investment in light rail and its Rapid Transit Network (trains and busways). 

A nationwide network of charging stations will be developed for electric vehicles (EVs).  Any investment in new roads will need to be consistent with climate change targets to avoid encouraging the use of private cars.  


Building design and construction techniques which minimise emissions over the life cycle of a building will be encouraged.  Desirable features include smaller, better-insulated spaces, and the use of sustainable and recyclable materials. 

Labour and National’s bipartisan plan permits three dwellings of up to three storeys on residential lots. 

A voluntary certification scheme for modular component manufacturers has been introduced to streamline the consenting process.  Modular design and off-site construction techniques are expected to reduce construction waste and increase the supply of durable and affordable houses.  

How will it be funded?

The Government is aligning its procurement policies and public financing with climate initiatives, and will partner with iwi/Māori and local government in housing and transport infrastructure projects.  The discussion document identifies Kāinga Ora as a significant market for fast-tracking the implementation of low-emissions design and construction practices. 

Strategies are also being implemented to encourage private investment in climate action, which include mandatory climate-related disclosures for financial products[2] and co-funding of projects with public funds.  Subsidies and rates or tax rebates for low-emission builds or retrofits are also being considered. 

What next?

Submissions close on 24 November 2021.  Hesketh Henry will continue to report on developments affecting our clients in the building and construction sector.


[1] Te hau mārohi ki anamata: Transitioning to a low-emissions and climate resilient future

[2] The Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 received royal asset last week.

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