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By: Daniyal Hannan

New Zealand’s Zero Carbon Plan 

New Zealand is a small country in the south pacific known for its breathtaking landscape, peaceful people, and most importantly the set of the Lord of the Rings trilogies.  However, this country of only 4.8 million people is rallying together to pass legislation that is one of the most progressive responses to climate change.[1]  The country is led by Prime Minister Jacinda Ardern who has stepped into the global spotlight and excelled in leading her country on numerous occasions.[2]  With Prime Minister Ardern’s support and leadership, the country’s parliament is working on the Climate Change Response Zero Carbon Amendment (“the Zero Carbon Bill”) to combat the effects of climate change on the world.[3]  Prime Minister Ardern stressed that “climate change is the biggest challenge of our time,” and in a country where sheep outnumber people 10 to 1, the people certainly understand how work together in the best interests of the environment – Kia Ora.[4]

The Zero Carbon Bill tackles climate change by detailing industry energy transition plans that aim to reduce the total emissions of all greenhouse gases to zero by the year 2050, except for biogenic methane gas.[5]  As opposed to manmade pollution, biogenic methane gas is natural gas that is found in the earth’s sediments underground.  The Zero Carbon Bill goes one step further with a plan to reduce the total emissions of biogenic methane gas or natural gas to a total value that is at least 10% below the levels from 2017 by the year 2030 and to a total value that is at least 24 to 47% below the  levels from 2017 by the year 2050.[6]  The Zero Carbon Bill also aims to limit the global average temperature increase to a maximum of 1.5 ℃ by implementing its energy transition plans.[7]  To aid in the development of this legislation, the New Zealand Climate Change Commission issued a call for evidence on “options available to reduce greenhouse gas emissions” from 2022 to 2035, and it received “77 responses from a wide range [of] organisations and individuals.”[8]  Overall, the Zero Carbon Bill provides “a framework by which New Zealand can develop and implement clear and stable climate change policies,” but it is also important to consider how the law’s energy transition and reduction of greenhouse gasses will have an effect the New Zealand economy.[9]

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The Economic Implications of Implementing the Zero Carbon Plan

With a dynamic issue like climate change, it is critical to assess the economic impact of New Zealand’s monumental and promising Zero Carbon Bill.  An economic analysis from New Zealand’s Ministry for the Environment — Manatu Mō te Taiao reported key findings that showed overall promise for the future of the nation’s economy with the Zero Carbon Bill in place.[10]  This report noted that the New Zealand economy “can continue to grow under any of the 2050 target options”, mentioned above.[11]  While the report stated that the economy would not grow as quickly “as it might have done without any further climate action,” it is “highly unlikely” that New Zealand would not take any further action to combat climate change.[12]  Therefore, the fact that the economy can continue to grow even with the Zero Carbon Bill’s 2050 target goals is a massive positive for the country and its economic future.

The report mentioned that New Zealand would need to “substantially expand [its] forest estate while continuing to innovate.” [13]  A strong national economy “will require lots of trees”  and increasing innovation because it can reduce the economic impact from higher emission prices associated with lower growth rates.[14]  Some business may face increased competition in prices, such as those “exporting to overseas markets” if the Zero Carbon Bill has the effect of increasing costs; however, “new sectors can emerge and new business opportunities could arise” where New Zealand is “already leading the research and development,” such as agriculture.[15]

Furthermore, there are many co-benefits of the Zero Carbon Bill that could help stimulate the economy.  Many studies have calculated “substantial wider benefits of transitioning to a low-emissions economy,” and those benefits from affirmative directives to combat climate change include “reduced congestion, health benefits, cleaner air, cleaner water and improved biodiversity.”[16]

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So How can the United States Follow?

While it is an outstanding directive from New Zealand it is critical to the health of the world for the United States to follow because “there are upsides” to the Zero Carbon Bill’s economic impact “if the whole of the world acts.”[17]  If all countries have New Zealand’s Zero Carbon Bill’s ultimate objective to limit temperature increases to 1.5 ℃ by 2050, the communal effect could lead to “an increase in the global gross domestic product [] [by] 1.5 to 2%.”[18]  Currently,  the United States’ policy on climate change is far from this under its current presidential administration.[19]

In June of 2017, Trump pulled out of the Paris Climate Agreement, which is contrary to New Zealand’s Zero Carbon Bill in accordance with reducing temperature increases to 1.5 ℃ by 2050, and the United States current policy is inconsistent with meeting that goal.[20]  Most recently, Trump used the panic of coronavirus pandemic as a cloud to shade his rollbacks of United States climate change efforts.[21]  On March 31, 2020, Trump weakened “one of the [United States’] most aggressive efforts” when a new rule from the United States Environmental Protection Agency announced new fuel efficiency standards for cars and trucks.[22]  This new rule from the United States Environmental Protection Agency is in stark contrast to the carbon reduction and energy transition goals of New Zealand’s Zero Carbon Bill.  This new rule relaxes fuel efficiency standards by requiring car manufacturers to increase fuel efficiency by only 1.5% a year, rather than 5% per year as the previous rule required.[23]  This means that about “900 million more tons of carbon dioxide” will pollute the environment than with the previous rule in place, which is no where near a step in the right direction towards New Zealand’s Zero Carbon Bill.  New Zealand is launching itself in the right direction for the betterment of the earth; as it certainly is, Aotearoa.  

[1] See Climate Change Response (Zero Carbon) Amendment Act 2019, s 3 (N.Z.), https://www.legislation.govt.nz/act/public/2019/0061/latest/LMS183736.html.

[2] See generally New Zealand shooting: Jacinda Ardern to announce gun law reforms within 10 days, The Telegraph (last updated Mar. 18, 2019), https://www.telegraph.co.uk/news/2019/03/18/jacinda-ardern-announce-gun-law-reforms-within-10-days-suspect/.

[3] See Eleanor Aigne Roy, Ardern says New Zealand on ‘right side of history’ as MPs pass zero-carbon bill, The Guardian https://www.theguardian.com/world/2019/nov/07/ardern-says-new-zealand-on-right-side-of-history-as-mps-pass-zero-carbon-bill, (last updated Nov. 7, 2019) (explaining that the bill passed 119 votes to none in New Zealand’s Parliament).

[4] See id.

[5] Climate Change Response (Zero Carbon) Amendment Act 2019, s 3 (N.Z.); see also Climate Change Response (Zero Carbon) Amendment Act, Ministry for the Environment — Manatu Mō te Taiao (https://www.mfe.govt.nz/climate-change/zero-carbon-amendment-act, last visited Mar. 30, 2020).

[6] Climate Change Response (Zero Carbon) Amendment Act 2019, s 3 (N.Z.).

[7] Id.

[8] Climate Change Commission https://www.climatecommission.govt.nz/, (last visited Mar. 30, 2020) (showing a wide range of sources that contributed evidence on alternate forms of energy and how to reduce greenhouse emissions, such as car manufacturers, energy companies, doctors, and environmental groups).

[9] Climate Change Response (Zero Carbon) Amendment Act 2019, s 3 (N.Z.).

[10] See Zero Carbon Bill Economic Analysis:  A synthesis of economic impacts, Ministry for the Environment — Manatu Mō te Taiao https://www.mfe.govt.nz/sites/default/files/media/Climate%20Change/Zero-Carbon-Bill-Economic-Analysis-Report-FINAL.pdf, (last visited Mar. 30, 2020).

[11] Id. at 5.

[12] Id.

[13] Id.

[14] Id. at 6.

[15] Id.

[16] Id.

[17] Id.

[18] See id.; (noting that a global adoption of a Zero Carbon plan could preclude economic damages on global scale of “approximately NZ $11 trillion to $16 trillion,” which is about $6 to $9 trillion in U.S. dollars).

[19] See Sarah Gibbens, 15 ways the Trump administration has changed environmental policies, National Geographic (Feb. 1, 2019) (tracking the decisions that will “impact America’s land, water, air, and wildlife”).

[20] See id.

[21] Anna M. Phillps & Russ Mitchell, Trump weakens fuel economy standards, rolling back key U.S. effort against climate change, Los Angeles Times (Mar. 31, 2020).

[22] Id.

[23] See id. (explaining that the new rule reduces the fuel efficiency goal from 54 miles per gallon by 2025 to only 40 miles per gallon by 2026).

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