New Zealand needs to improve its land use decisions and get tougher on emissions pricing if it is to achieve its Paris targets, according to a new report by Vivid Economics.

Net Zero in New Zealand was commissioned by GLOBE-NZ, a cross-party group of 35 NZ MPs concerned about the nation’s emissions trajectory.

The researchers applied scenario analysis across the NZ economy and looked at both land and energy use. The big challenges were identified as a need to reduce emissions from the agricultural sector, increase forest cover and escalate electrification of both the private and public vehicle fleets.

Three scenarios were presented.

In “Off Track New Zealand” the country fails to meet the Paris targets due to focusing mostly on low-cost emissions reduction strategies but not addressing land use patterns.

In “Innovative New Zealand” the country is able to achieve net-zero emissions by 2050 through reducing overall livestock numbers and increasing reforestation while also implementing technological advances including EVs, more renewable energy capacity and alterations to breeds and feeding of livestock.

Other elements of the scenario include cost reductions for EVs for freight haulage, more efficient electrical heating technologies for high temperature applications and a vaccine to reduce methane emissions from livestock.

The structure of agriculture also shifts, with animal numbers reduced by 25-30 per cent and greater use of farmland for horticulture and other low-emissions crops. One million extra hectares of forest are planted by 2050.

Under the “Resourceful New Zealand” scenario, the nation undertakes the full range of low-cost emissions reduction strategies including decarbonising the energy sector, and also increases forest cover by 1.6 million hectares by 2050.

“All scenarios envisage the country exploiting abundant opportunities to pursue emission reductions that are either competitive with, or almost competitive with, more emissions-intensive alternatives,” the report stated.

“In the energy sector, these opportunities, highlighted in a burgeoning international evidence base on so-called ‘deep decarbonisation’ opportunities, include energy efficiency, further decarbonisation of electricity generation, and the electrification of the transport fleet and of low-grade heat.

“There are also some similar opportunities in the agriculture sector including improving low-performing farms, breeding lower-emissions livestock and taking advantage of new feeds.

“In combination, these opportunities are attractive to implement, especially if the rest of the world extends its decarbonisation efforts and drives technologies further down the cost curve.

“As well as providing low-cost (in the terms used in this report) ways of reducing emissions, they can also improve the health of New Zealand’s citizens, help reduce energy poverty, enhance mobility, improve water quality, and make New Zealand an attractive location for the low-emissions industries of the future.”

The researchers recommended that the NZ government develop a trajectory for emissions price policy values that are consistent with the Paris Agreement’s objectives.

This would “imply significantly higher values” than seen in the current NZ Emissions Trading Scheme.

A “robust and predictable” emissions price would also help encourage the private sector to make investments that are consistent with a low emissions future.

Extending the ETS pricing to include agriculture – which is currently not included – might also help encourage the land use decisions required for the Innovative and Resourceful scenarios, the researchers said.

“Emissions pricing needs to be accompanied by a range of changed market and regulatory arrangements, infrastructure deployment mechanisms, and specific support to address a range of additional barriers and market failures.”

The report also said there could be an opportunity for NZ in the global future of R&D into low-emissions technologies.

“Given the attractiveness of the Innovative scenario, New Zealand might contribute further to this, particularly in areas where it offers comparatively strong expertise, advantages and needs.

“Options for collaborative research and experimentation across government, business and research institutions should be explored, while further international collaboration can facilitate rapid application of new approaches to local contexts.”

  • Read the full report here
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