Productivity Commission inquiries into low-emissions economy

In a positive move towards determining the opportunity for domestic carbon mitigation the Government has tasked the Productivity Commission to find recommendations on how the country can lower net emissions.

The focus of the report will be on how to manage a transition to a lower net-emissions economy, while maintaining or improving incomes and wellbeing. The commission is to look at economic solutions on how to achieve the set emissions targets.

The terms of reference have been compiled by the commission, the Ministry of Finance and Treasury. That states the emissions inquiry should consider the implications of a changing climate to inform different economic pathways the Government should consider.

The inquiry should examine the current economic patterns and how these are already contributing to emissions. It will then determine the timeframes and costs of how the country's economy may need to evolve, as well as the strategies and practices the Government could adopt to achieve change.

The Commission’s work programme includes an Issues Paper which was released on 9 August, a draft report in February 2018 and a final report by the end of June 2018.

NZWEA submitted in response to the August Issues Paper. In its submission NZWEA:

  1. Recognised the importance of the Commission’s Inquiries given the current absence of a defined transition pathway.

  2. Expressed a preference for New Zealand to address its emissions footprint domestically as ultimately a net zero position needs to be achieved under the Paris Agreement and any investment should be focused on achieving this outcome for the benefit of all New Zealanders.

  3. Noted as the price of carbon increases, future competitive advantage can be obtained by utilising New Zealand’s natural renewable energy advantages. 

  4. Supported the electrification of high carbon emitting activities as outlined in the Issues paper and the NZ Energy Efficiency and Conservation Strategy.

  5. Considered that there was a need for a higher level of regulatory alignment to ensure the electricity industry provides an affordable, stable and environmentally sustainable energy system for all.  In particular, ensuring the alignment of the objectives of Government Departments and Crown Entities to address climate change and support the use of renewable sources of energy and enhancing the effectiveness of The National Policy Statement for Renewable Electricity Generation.

  6. Highlighted the importance of removing the consumer cross subsidisation created by electricity distribution businesses (EDB) charges not being cost reflective to support sector innovation and wind energy.

  7. Supported the call by the Parliamentary Commissioner for the Environment’s for a long-term approach to climate change including a new Climate Change Act and to put emissions targets into law.

The Association’s submission can be viewed here: