Productivity Commission inquiries into low-emissions economy

In a positive move towards determining the opportunity for domestic carbon mitigation the Government tasked the Productivity Commission to make recommendations on how the New Zealand can transition to a low-emissions economy.

The focus of the Inquiry was on how to manage a transition while maintaining or improving incomes and wellbeing. The commission looked at economic solutions on how to achieve the set emissions targets.

The terms of reference was completed by the Commission, the Ministry of Finance and Treasury and included assessing the implications of a changing climate to inform different economic pathways the Government should consider.

The Inquiry considered current economic patterns and how these are already contributing to emissions. It determined 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 included an Issues Paper which was released on 9 August 2017 and Draft Report issued on 27 April 2018 and a final report at the end of August 2018.

Click link below to view the Association’ submission on the Issues Paper:
Productivity Commission Issues Paper

Click link below to view the Association’s submission on the Draft Report:
Productivity Commission Draft Report

The Commission’s Final Report highlighted three particular shifts that must happen for New Zealand to achieve its low-emissions goals:

  • Stop burning fossil fuels and switch to using electricity and other low-emission energy sources
  • Undertake substantial levels of afforestation to offset New Zealand’s remaining emissions.
  • Make changes to the structure and methods of agricultural production.

The Commission considered the Government needs to prioritise the following actions to achieve the above shifts:

  • Establish a comprehensive and durable climate change policy framework, including separate legislated long-term targets for short- and long-lived gases; a series of successive emissions budgets; and an independent Climate Change Commission;
  • Reform the New Zealand Emissions Trading Scheme and apply some form of emissions pricing to methane from agriculture and waste;
  • Ensure supportive regulations and policies are in place, to address non-price barriers, and accelerate the transition; and
  • Devote significantly more resources to low-emissions innovation and technology.

Click below to view the Commission’s Final Report: