Principles for guiding the Emissions Reduction Plan Speech

Tēnā koutou, tēnā koutou, tēnā koutou katoa.

Tēnā koutou, tēnā koutou, tēnā koutou katoa.

Ngā mihi o te ahiahi.

Good afternoon.

Let me begin by thanking Stephen Bendall for the warm introduction, and ASB for hosting us.

I also want to thank you all for being here.

In the room we’ve got a wide range of businesses represented, as well as unions, Iwi/Māori, and campaigners.

It was important for me to speak directly to each of you today about the work we are doing on the Emissions Reduction Plan and the principles we will apply to the decisions about what goes in it.

It is these decisions – especially those that we take in the next two years – that will have the most profound impact on the world your children and grandchildren will inherit.

There is no part of Aotearoa, no business, no community, no family whose future will not be shaped in some way by these decisions – which is why it is so important we get them right.

And why today I want to share with you the approach we are taking.

Since we released the Climate Change Commission’s final advice, officials in agencies and ministries right across have been coming to the table to set out what actions can be taken to bring down emissions in their sector.

These conversations will form the basis of draft chapters for the Emissions Reduction Plan, which will then need to be considered by Cabinet before consultation.

Put simply, from now on, nearly every Minister needs to think of themselves as a Climate Change Minister. And they are.

A few days ago, the Treasury’s Long-term Fiscal Strategy landed on my desk.

It says very clearly that climate change is a long-term trend with significant economic and fiscal impacts.

It says the sooner we act, the better the economic outcomes will be.

It sets out that the Treasury has introduced shadow carbon pricing into its fiscal and economic analysis.

I cast my mind back to shortly after I was first elected, and the then Minister of Finance, the now Sir Bill English, told Parliament he had not even asked the Treasury to quantify the costs of climate change.

Well, things have changed!

Aside from the Budget and COVID-19, this is one of the largest cross-Government programmes of work we have engaged in – and, frankly, we don’t have a lot of time to do it.

The Zero Carbon Act requires us to publish the Emissions Reduction Plan before the end of the year, setting out how we will meet our climate targets.

But before that we need to decide on what the first three Emissions Budgets will be.

These budgets will set out the total amount of emissions New Zealand must cut over the next 15 years, and therefore what the Emissions Reduction Plan must achieve.

And so what I want to talk with you about today are principles I would like to see guide our decisions and actions over the next few months.

More than that, these principles should be used to assess and evaluate what we have achieved so far, in order that lessons can be learned to inform what we do in the future.

This means that if we don’t get something right, we can change direction quickly – something I think most people would expect from their Government.

Having said that, we are only now at the start of the race to net-zero and it is a marathon, not a sprint.

We have a lot of ground to cover and it’s going to take a long time.

Our task right now, is to take the first steps.

***

The transition to a low carbon economy will involve a mix of positive opportunities and necessary changes.

From the small things, like working from home more often in order to cut down on trips in the car, to the more transformational change that will need to happen over a long period of time.

It is these latter, longer-term changes to which these principles will most directly apply.

But if we are going to transform our economy over the coming decades, as we must, then we will need to recognise that the story of change is also a story of collective progress.

The world in thirty years’ time will look as different, and as familiar, as the world of today looks to that of thirty years ago.

Three decades ago the World Wide Web was an idea in the head of a British scientist called Tim Berners-Lee, working at the CERN research facility in Switzerland.

Now it’s in my wristwatch.

In the early 1990s, we would never have imagined that one day some schools would be heated by pristine, quiet, hugely efficient wood chip boilers hooked up to monitoring stations in Austria and controlled by the principal’s touchscreen phone.

But that is now the case for more and more of our schools thanks to the State Sector Decarbonisation Fund.

A little under three decades ago the first hybrid vehicle hit the streets – the Toyota Prius.

And now here we are, with policies like the Clean Car Discount making clean and green ways of getting around a more realistic option for many.

Of course, there will be robust and occasionally difficult conversations about exactly how we build a low carbon future.

Progress doesn’t always come easy.

By itself, the recognition that we need to build a low emissions economy will not be enough.

Nor will it substitute the hard work we have ahead, of building consensus and making difficult decisions.

But if we do not change, the cost of inaction or delay will be an estimated 2.3 percent of GDP by 2050.

This could burden future generations with unnecessary cost and uncertainty.

So we know we need to change – the question then is how.

***

Principle One - A Just Transition

What we know from our history is that change needs to happen in a way that is fair to everyone.

Throughout our history, economic transformation has more often than not led to corrosive inequality – those at the top amassing an even larger share of wealth and income, while too many families and communities were left behind.

We all know the stories:

  • People left with little choice but to take on increasingly precarious work as their livelihoods are taken over by technology.
  • Industrial workers who lost their jobs only to be denied access to retraining or support that would help them find new opportunities in emerging sectors of the economy.

Economic change in New Zealand has undoubtedly brought with it many benefits.

People with higher incomes and quality of living, a world-class technology sector, and we are home to some of the most innovative approaches to growing food in the world.

But more often than not these benefits have not been shared evenly.

Far too many families and vulnerable communities have been excluded from New Zealand’s story of change, our story of progress.

This time has to be different.

We are going to have to come together and choose a vision of a low carbon Aotearoa New Zealand where everyone has a secure income that pays enough for them to put a warm roof over their heads and food on the table.

Which brings me to the first principle we will apply to the Emissions Reduction Plan – a fair, equitable transition that leaves no community, no family, and no person behind.

There is no doubt we have an historic opportunity ahead of us – the creation of new jobs and opportunities for Kiwi businesses; lower household energy bills; a more sustainable agriculture sector; less air pollution; an enviable global brand; warmer, drier homes; exciting new technologies; protection of native species and eco-systems; cost savings for businesses; and greater resilience in the face of increasing uncertainty.

How we go about capturing these gains in our communities – and who stands to benefit most – is a question that we all need to be asking ourselves.

For me, the answer is clear: we will only have succeeded if we transition to our low carbon future in a way that also helps unwind existing patterns of inequality.

Because if we don’t – if the transition simply locks in or exacerbates those existing patterns of inequality – then we simply won’t have the social license to continue the transition.

It will become, in itself, unsustainable.

Witness the yellow vest protests in France. France is a country with huge public support for climate action.

But when the government brought in a carbon tax on fossil fuels, increasing household costs, it faced tremendous opposition, because the distributional impacts of the transition weren’t managed at the same time.

Part of this is about ensuring the shift towards low-carbon work includes support for the work that makes all other work possible.

Genuinely low carbon professions like teaching, social care, and nursing.

Jobs that don’t extract anything from nature, don’t create any new waste, and have a limited impact on the environment.

People know that change is coming to their jobs as a result of climate change and other trends, and we need a just transition to support them through this change.

That means proactive transition planning with business, unions, iwi, and affected communities at the table; widely accessible education and training; dedicated support for workers in transition; working for a fairer distribution of health outcomes, and making sure we fully understand the distributional impacts of climate policies on population groups.

It also means looking at how we can change governance structures and business models so they are more inclusive and offer genuine opportunities for working people to shape the decisions that impact them.

The foundations for this already exists through initiatives like the Government’s Just Transition Unit and Future of Work Forum, but there is work to be done if the transition is to be fair, inclusive, and equitable.

***

Principle Two - Science-led

Now, of course, the world of work is intimately connected with the natural environment.

A huge number of jobs in Aotearoa rely directly on the effective management and sustainability of a healthy environment.

This includes jobs in farming, fishing and forestry, and those that rely on essential ecosystem services like soil renewal and fertilisation, pollination, and water purification.

The defining feature of a just transition then will be action to cut emissions right across the economy.

However, the window of opportunity for us to do this is closing fast.

In late 2018, the Intergovernmental Panel on Climate Change published a landmark report informing us that global emissions need to be cut roughly in half in less than twelve years if we are to have any chance of limiting global warming to 1.5°C - a limit that is acknowledged the world over as the best chance we have of avoiding climate crisis.

This is a limit that simply cannot be met without every country, every city, and every community playing a game-changing leadership role.

With President Biden now in the White House, every member of the G7, the European Union, Japan and South Korea are now committed to net-zero emissions by 2050.

China too has said it will aim to achieve carbon neutrality before 2060.

Global momentum is building at just the right time.

Which is precisely why putting the 1.5°C global warming limit into our Zero Carbon Act was so important.

Why creating the independent Climate Change Commission was essential to ensuring this, and all future Governments receive the best possible independent, science-based advice on what needs to be done in Aotearoa in conjunction with the rest of the world to do to stay within this warming limit.

And why making huge investments in our low carbon future is so crucial to making us a world-leader on climate action - from clean and active transport, to replacing coal boilers in schools, to accelerating innovation through Green Investment Finance.

Is it enough? No. We know that.

For we are yet to see a sustained decline in the pollution we put into the atmosphere.

Even when we do, we need to ensure that decline continues and, in fact, picks up pace, every year until we hit net-zero.

And so the second principle we will apply to the Emission Reduction Plan is to make sure it cuts emissions in line with what the science requires.

That is absolutely non-negotiable.

It is now three years since that game-changing IPCC report was released – and here we are, no longer with 12 years to cut emissions at the level required, but nine.

The question then is not whether we need to act.

The question is, and always has been, whether we will act before it’s too late.

Previous generations didn’t have the technology - but we do.

Future generations won’t have the chance - it will be too late.

And so, it falls to us.

***

Principle Three - Nature

And we will need every tool in the toolbox in order to do it.

That means focusing on how protecting and restoring Aotearoa New Zealand’s precious ecosystems such as native forests, oceans, and freshwater habitats can help repair the planet’s broken climate.

For decades, successive Governments have tried to deal with our biodiversity and climate crises separately, trapping what should be complementary solutions in silos.

But the reality is, neither the biodiversity crisis nor the climate crisis will be successfully resolved unless both are tackled together.

That is why the third principle of the Emissions Reduction Plan will be to enhance the role nature based solutions can play in helping tackle the climate crisis.

In practice, this means recognising climate change is a common thread that runs through the Emissions Reduction Plan, the Aotearoa New Zealand Biodiversity Strategy, the National Policy Statement for Indigenous Biodiversity, RMA reform, the forthcoming Climate Adaptation Plan, and planned reform of our water infrastructure.

If we can do this, we can have a truly holistic approach to stopping the loss and degradation of carbon- and species-rich ecosystems on land and in the ocean – especially areas like forests, wetlands, and coastal ecosystems.

We can restore carbon- and species-rich ecosystems - a cost effective step that will also improve water quality, reduce soil erosion, and enhance pollination.

And we can enhance our international reputation for world-leading sustainable, organic and regenerative agricultural and forestry practices.

***

Principle Four – te Tiriti o Waitangi

At the heart of what I have spoken about so far is the concept of repair, partnership, and progress – each of us playing our part to create well-paying jobs, restore and protect threatened, endangered, and fragile native ecosystems, and drive innovation.

But there is a deeper story to be told here about the duty to repair – and that is to transition to a low carbon future in a way that helps to undo the damage done by nearly two centuries of failure in upholding the rights and property of Iwi/Māori.

So much of the modern history of Aotearoa can be traced back to the signing of Te Tiriti o Waitangi – and the broken promise of Māori autonomy and authority over the land.

An understanding that Māori hold mana as Kaitiaki – not through imposition but through partnership.

We rightly point to the structural and historical causes of today’s social and economic injustices, but in doing so it is also our responsibility to acknowledge that for too many Māori, injustice is not just historical, it is a lived reality.

And so, the fourth principle for the Emissions Reduction Plan is to apply a tikanga Māori lens to the transition to a low emissions economy.

Through this lens we can better understand the distributional impacts of climate policies and work to balance some of the risks, the costs and benefits to Māori of the transition.

We already know that Māori could experience more job change as a result of the transition – and so by applying a tikanga lens we can ensure Māori have equitable access to education and training opportunities that can prepare them for the jobs of the future.

We can also do more to rebalance Māori wealth through support for things like Māori agribusiness and afforestation on Iwi owned land.

And gain a fuller understanding of how initiatives like introducing more affordable public transport options will better connect Māori to whanau and tūrangawaewae.

In short, a transition that upholds the promise of Te Tiriti o Waitangi.

We will not always get this right. We will make mistakes. But we can and must use the Emissions Reduction Plan as an opportunity to move the story of Aotearoa along.

It will not be up to the Crown alone to decide exactly how we do this.

But what we can do – what we can all do – is actively support Iwi/Māori and involve a variety of Māori voices in the design and the development of the transition.

***

Principle Five - a clear, ambitious, and affordable path

Many of the challenges we face right now – the climate crisis, the biodiversity crisis, and the crisis of poverty – are rooted in past mistakes, not our capacity to do things differently in the future.

It will take time to change, but at the heart of the transition needs to be a faith in the potential of enterprise and Kiwi ingenuity.

As a country we are constantly innovating.

From the labs coming up with cutting-edge technologies, to smaller but no less innovative changes, businesses all over the country are making changes already.

The transition to a low carbon economy will require innovation at every level.

To make that happen, government has a role to play in addressing the inherent uncertainty of change.

And that is why the fifth guiding principle shaping the Emissions Reduction Plan, is to provide business with a policy environment that is predictable and stable over the long term, providing the level of certainty they need to invest in low carbon solutions.

Our Government was elected on a promise of climate action.

So it is our job as a Government to create the conditions where people, businesses, and communities can invest in reducing emissions.

If we get it right, we have the potential to unleash a period of unprecedented innovation and opportunity for New Zealand business which will be the catalyst for growth and shared prosperity for decades to come.

We can create competitive new markets for low carbon technologies, spur creative entrepreneurship, and become the envy of the world for our clean, low carbon exports.

Our businesses will grow smarter and more productive, from which we can build competitive advantage as one of the world’s most innovative clean economies.

It is the Government’s responsibility to set the framework for this future - but it is up to you to seize the opportunities it will create.

Exactly what the framework looks like through the Emissions Reduction Plan will become clearer in the next few months, but what I can commit to today, is that:

  • We will signal policies early so businesses and communities have time to plan and confidence to invest.
  • We will deepen our partnerships with business, communities, and Iwi/Māori to support the development and implementation of the Emissions Reduction Plan.
  • We will work to build consensus and cross-party support for the emissions budgets, so that if the Government changes, the direction of travel stays the same.
  • We will ensure market-based approaches like the Emissions Trading Scheme provide the right price signals so the polluter-pays – in others words to ensure those who are the source of pollution bear the bulk of the cost for managing it.
  • And we will look at what support measures can be put in place so that low carbon technologies are accessible to everyone, so that families up and down the country have the same chance to enjoy the benefits of the transition.

For all of this to happen, we need to rise above day-to-day political divisions and come together in a collective effort to address the biggest issues facing the country.

This isn’t about handing our opponents a veto over what polls show most New Zealanders want us to do.

No one can veto the scientific reality that we need to cut emissions, fast.

Rather it is a promise that we will aim for a bipartisanship that enables us to talk about the future in a way that makes sense to people.

Not through abstract debates played out through newspaper headlines, but by talking about what change looks like for business and families.

Now, we can and should debate the best approach to meeting the emissions budgets.

But to deny where we need to get to, and that we will need to make changes to get there, risks betraying future generations and denying us the gains to be made.

***

Closing

Over the last four years, we have put in place the foundations for a low-carbon Aotearoa that will be a catalyst for job creation, innovation, and prosperity for decades to come.

But it is what we do next that will matter most.

Earlier this year I said that I had never felt more confident that a climate-friendly, prosperous future for Aotearoa was within reach.

I still feel that way.

But a huge part of whether we do it or not will come down to those of you here today and the options you choose in your own organisations.

Addressing the climate crisis will never just be about setting long-term emission reduction targets - but making changes, both large and small, that together will add up to a better, cleaner future.

Unlike previous periods of economic change, we will support people through the transition we are embarking on.

That means equitable access to low carbon technologies, as well as working with Iwi/Māori, Pacific people, unions and business to ensure the jobs of the future are created in the right places, and are made available through the right training opportunities.

We will also work with nature to mitigate and adapt to climate change, so that the unique plants and wildlife species that live only in Aotearoa New Zealand can thrive for future generations to enjoy.

Māori management and ownership of land goes hand in hand with indigenous biodiversity protection, so a te-Tiriti led approach to the transition will help with that, too.

The Emissions Reduction Plan will set the framework for a strong, lasting, balanced and inclusive transition. But Government cannot achieve it alone – it is a job for us to do together.

The Emissions Reduction Plan will open the door onto something new, something better for Aotearoa - a blueprint for a low carbon future that we know is achievable and affordable.

The question will be whether we have the courage to step outside; to find the space we need to rethink and change the way we do things.

If we apply the five principles I have set out today:

  1. a just transition;
  2. a science-led response;
  3. enhancing the role of nature based solutions;
  4. genuine partnership with Māori;
  5. and a clear, ambitious, and affordable path –

then I firmly believe ours will be a future that is more equitable, more prosperous, and more innovative – and all within planetary limits.

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