Our German Desk
The Government has released a draft for the second emissions reduction plan (ERP 2) which is open for consultation until 21 August 2024. It reflects a significant change in approach to climate change mitigation. Rather than reducing the volume of gases that New Zealand emits to atmosphere (gross emissions), the focus is on abatement through forestry and other potential methods for carbon capture.
The draft plan states that the role of Government is to get policy and regulatory settings right, not to direct where emissions reductions occur in the economy. Reductions are intended to be led by the market, driven by the Emissions Trading Scheme (ETS).
There is no mention of the Building for Climate Change programme or any specific plan for reducing gross emissions in the construction sector. The future of the current proposals for improving the energy performance of buildings and reducing embedded carbon is accordingly unclear. The draft simply states that the Government intends to support green building practices in New Zealand and “work to establish a clearer picture of this is underway”. It also intends to encourage wood processing and remove barriers to building with wood.
The draft plan says that to build resilience, we must invest in our infrastructure and built environment (this is the first pillar of the Government’s strategy). It does not provide detail, other than a commitment to build a network of 10,000 public EV chargers by 2030. The transition to low carbon technologies for businesses and households must be financed by the private sector.
The draft plan projects that New Zealand will meet its emissions budgets until 2030, although this depends in part on new technology. It anticipates that later budgets and the net zero target for 2050 will not be met by either the ETS or the other measures proposed in the plan. Domestic emissions will increase under the draft plan and New Zealand will need to purchase more international offsets by 2030 in order to meet its nationally determined contribution (NDC) under the Paris Agreement. It says the Government is working on this challenge.
Key changes between ERP 1 and the draft ERP 2 are summarised in the table attached to this article. The table does not include all policy measures in ERP 1.
The Government was sent a letter from the New Zealand Green Building Council (NZGBC) on 27 June 2024 seeking a commitment to implement the Building for Climate Change programme. The letter was signed by 50 businesses and professional bodies. The Minister of Climate Change, Hon. Simon Watts, will be addressing the NZGBC’s Green Property Summit on 14 August 2024. The future of the programme under ERP 2 should be a topic of some interest.
For further information about matters discussed in this article, please get in touch with our Construction Team or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
