New Zealand

New Zealand is one of the few countries to have enshrined its 2050 net zero emissions goal in to law, passing the Zero Carbon Act in 2019 but this early ambition is not yet aligned to short-term policies. The net zero goal is backed up with an intermediate 2030 target of reducing emissions by 30% against 2005 levels (excluding land use changing forestry) and the governments Climate Change Programme outlines a strategy to meet this via emissions budgets, an emissions reduction plan, emissions trading scheme, land use change and sustainable finance actions. However, close inspection of the programme reveals that it permits offsetting of emissions through forestry which, when set beside a 2030 target that excludes forestry, establishes a loophole permitting net emissions to continue to rise. In addition, the countrys net zero goal excludes methane from agriculture and waste (which accounts for over 40% of total emissions). New Zealands 2020 NDC did not strengthen the 2030 target or address its flawed architecture as recommended by the countrys Climate Change Commission.

There is some guidance available on gender from Diversity Works, a government-supported organisation. In June 2018, the government set a target of achieving 50% women on public sector boards and committees which was reached in 2020. A task force was also established to reduce the public sector pay gap, which has since reduced from 12.2% to 8.6% between June 2018-2021.

The government has not released a national strategy to support businesses or organisations that are working towards the SDGs. In addition, the Auditor General's report highlights that New Zealand has not yet set specified targets across all of the SDGs, in order to determine whether the country is on track to achieve them. However, there is a Sustainable Business Council which supports businesses to work towards the SDGs, including assessing them every 2 years and providing guidance on possible improvements.

Stats New Zealand Tatauranga Aotearoa is the government agency responsible for the compilation of national environmental economic accounts, and it also develops social, cultural and environmental indicators in the context of the wellbeing statistics. However, no system of wealth accounts has been established to date.

Aside from Stats New Zealand, the Treasury has its Living Standards Framework (LSF). Although the LSF contains metrics and indicators to measure wellbeing (with a public, online dashboard where these can be viewed), it does not include any measures of the capitals, or feed into national accounts.

While there is no formal plan in place, the government has taken some proactive steps. These include establishing New Zealand Green Investment Finance, a green investment bank which aims to accelerate investment in New Zealands low carbon future. Target sectors for investment are transport, process heat (replacing commercial coal boilers), energy efficiency, agriculture and distributed energy resources, crowding-in private capital and encouraging market leadership. There have been some cases of green and sustainability-linked loans, though there is no agreed taxonomy or local principles for labelling these schemes.

Elsewhere, the main private retirement scheme KiwiSaver was amended during 2021 to forbid default schemes from investing in fossil fuel production - a move anticipated to result in the withdrawal of approximately USD$9.5 billion from fossil investment.

The Treasury, in its Wellbeing Budget 2019, injected $106m into innovation for New Zealands transition to a low-carbon economy. The budget sets out a Productive and Sustainable Land Use package, investing $230 million in projects to support farmers and councils to make positive land use changes, establishes a National New Energy Development Centre, and proposes further investment in scientific research to support decarbonisation of the agricultural sector. The Fiscal Strategy 2020 prioritises responsible investment as a financial vehicle to ensure wellbeing, with the government channeling fiscal support to the Green Investment Fund and New Zealand Venture Capital Fund.

The Reserve Banks climate change strategy includes incorporating the impact of climate change within its core functions, and providing leadership to other public and private institutions. The bank commits to consider the impact of climate change policies and private sector adaptation on inflation and labor market outcomes, future capital and migration flows, and the NZ economy and financial system, conducting an in-depth analysis on potential future implications for financial stability.

The Reserve Bank of New Zealand has a stress test framework in place and regularly conducts financial stress testing. During 2020, the government announced it would introduce a mandatory reporting regime for large companies and banks, making it the first country to begin legislating a climate-related financial disclosure regime. The Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill was approved by parliament in October 2021, requiring over 200 organisations to make disclosures. While New Zealand has not yet adopted climate change stress testing for banks, it is currently exploring options to for incorporating climate risks within its stress testing framework and planning to launch a climate change scenario-based industry stress test by 2023.

New Zealand has an established emissions trading scheme in place, regulated under the governments Climate Change Response (Zero-Carbon) Amendment Act 2019 and implemented by the Environmental Protection Authority. However, key sectors such as agriculture (responsible for around 40% of the countrys emissions) are exempt from permit surrender obligations, undermining its effectiveness at present.

There is currently no cross-government body working for a green economy in New Zealand. While the Wellbeing Framework has established some relevant policy (such as ceasing to issue any more offshore oil and gas exploration permits) it does not form an overarching national strategy or facilitate wider coordination. The multi-sector Emissions Reduction Plan sets out some policies and strategies for mitigating the impact of decarbonisation, though these are relatively narrow in scope. Other relevant initiatives include the Primary Sector Climate Action Partnership, which aims to support farmers in mitigating agricultural emissions, and the One Billion Trees Programme.

There is limited support for green SMEs and social enterprisies. Although the government recognises the importance of social enterprises, no particular statement or legal entity structure was found. The Social Enterprise Sector Development Programme, implemented by the Department of International Affairs, does not appear to adopt a green approach to SME development. Although specific schemes for green or sustainable businesses are lacking, cooperatives form a major part of New Zealands economy (the top 30 cooperatives total gross revenue represents approximately 20% of GDP) and the government provides some support for them.

New Zealand has passed legislation enshrining their long term target of reaching net-zero by 2050 into law. To keep future governments on track toward meeting that goal, the Zero Carbon Act established a system of five-yearly emissions budgets to act as interim stepping stones towards that target. Cabinet recently agreed the first three emissions budgets (spanning 2022-2035) under the act, and is due to publish an Emissions Reduction Plan setting out how the government plans to deliver on its first emissions budget. However, the goal is not fully aligned with the Paris Agreements 1.5 degree target since it excludes emissions from agriculture.

New Zealand recently set the strategic, albeit challenging, target of reaching 100% renewable electricity generation by 2035, in addition to its previous target of 90% renewable electricity by 2025. The government is also considering renewable targets for heat and electrified transport.

The countrys Energy Efficiency and Conservation Strategy (EECS) 2017-2022 sets the overarching policy direction towards energy efficiency, conservation and the use of renewable sources, emphasising three priority areas: renewable and efficient use of process heat, efficient and low-emissions transport, and innovative and efficient use of electricity. In December 2021, the Energy and Resources Minister commissioned the next five-year EECS (due to be released mid-2022) expected to align with the government-led national energy strategy. Complementary in-depth strategies on process heat, green hydrogen and the gas transition are also under development.

With ambitious targets in place and comprehensive strategies forthcoming, the country stands in a strong position yet financial backing remains in its infancy. Currently there are no government subsidies for renewable energy, and comprehensive financial support, incentives and investment packages will be needed if New Zealands targets and commitments are to transpire as renewable generation growth.

As part of its COVID-19 Response and Recovery package, the government launched a USD$930 million Jobs for Nature programme, aiming to create more than 20,000 jobs with direct social and environmental benefits for rural communities. The programme manages funding across multiple government agencies spanning the environment, conservation, business and employment - and by mid-2021 had created more than 4,500 new jobs. Work activities and roles are varied, but fall generally under weed and pest control, biodiversity enhancement and regional restoration (including wetlands and waterways), alongside skills training to support career development in environmental management. In addition, the One Billion Trees programme, which aims to increase tree planting to one billion trees by 2028, provides new employment and opportunities for Maori to maximise the potential of their land and resources.

While New Zealand does not have a specific green and pro-poor policy approach, it has some general policies in place to address child poverty and support those on low incomes. The 2018 Child Poverty Reduction Act established ten-year targets aimed at halving child poverty by 2028, and the Families Package provides a range of tax-credit adjustments and other measures for low-income families estimated to impact over 380,000 families with children and reduce child poverty. The government has also made significant increases to both the minimum wage and low-income benefits over a number of national budgets, alongside increasing the stock of public housing and reducing debt arising from predatory lending.

There are various partial channels for consultation and engagement, though none are comprehensive. National legislation follows a multi-step process that includes Select Committee, where any member of the the public can make a submission on a Bill before Parliament. As per New Zealands Cabinet Guide, public participation can be compulsory or strongly recommended due to a particular law or administrative requirement, or to meet the obligations of the Treaty of Waitangi (which frames the political relations between the government, on behalf of the Crown, and the M?ori population). In terms of impact assessment, the government requires Regulatory Impact Statements to be prepared for any legislation amendments, which include identification of particular groups impacted by the changes.

New Zealand has several initiatives for the bottom 40% of household incomes, spanning labour market programs for employment readiness, job placement services and wage subsidies. For example, the Construction Skills Action Plan includes a capacity building initiative to drive higher skilled and better paid jobs focusing on increasing participation of under-represented groups (M?ori and pacific peoples). The government has passed the Employment Relations Amendment Act 2018 in order to improve working conditions and wages, alongside publishing its Crown-M?ori strategy (which aims to increase M?ori median income by 20 percent between 2017-21) and Disability Strategy and Action Plans.

New Zealand also established a Welfare Expert Advisory Group (WEAG) to review the system and advise on the future and health of the welfare system. The government initially accepted 2 of the 42 recommendations in WEAG's report but have addressed more over time, including those related to eligibility rules, income support, housing supply, employment opportunities for M?ori, and improving outcomes for peoples with health conditions and disabilities. While innovative social programmes are limited (with no green pilots identified), New Zealand has established a solid and broad social policy foundation.

In 2019 New Zealands Department of Conservation revised its Conservation General Policy, which combines its Conservation Act 1987, Wildfire Act 1953, Marine Reserves Act 1971, Reserves Act 1977, Wild Animal Control Act 1977, and Marine Mammals Protection Act 1978 into a comprehensive strategy, adopting an integrated management approach. The General Policy for National Parks provides direction for conserving land falling under the National Parks Act 1980.

More recently, the Te Mana o te Taiao - Aotearoa New Zealand Biodiversity Strategy 2020-2050 aims to improve governance, legislation and funding systems, placing biodiversity at the centre of economic decision-making and promoting the blue economy. The national strategy includes the internalisation of environmental costs as one of the pillars of biodiversity management, and places particular emphasis on indigenous biodiversity. New Zealand is also reforming existing legislation to include biodiversity measures, such as the Resources Management Act 1991, currently being updated to align with more sustainable and inclusive natural resource management practices.

New Zealand does not yet have a clear natural capital strategy in place and comprehensive accounts are not under development. However, some initial physical accounts are available, such as those published under the Environmental Economic Accounts 2018 which presents the natural capital stocks of land cover, timber and water in both physical and monetary terms. The accounts are intended to be updated annually with new developments being integrated over time. At present, the only SEEA flow account is for greenhouse gases though flow accounts for timber and water and other ecosystem accounts which inform on the transition to the low emissions economy are currently under consideration for development by Stats NZ. Stats NZ also elaborates natural capital indicators under the wellbeing indicators framework, spanning energy consumption, energy intensity, CO2 concentrations, ocean acidification and levels of pollutants among others.

There is no independent advisory body on natural capital in New Zealand. The Treasurys Capturing Natural Capital in Decision Making technical paper recognises that while the Living Standards Framework includes sustainability as one of its five dimensions, there is no specific and practical guide to deal with natural capital. Establishing a natural capital committee is complicated by considerations arising from the Treaty of Waitangi as Maori are tangata whenua who take a kaitiaki or guardian role over nature. Therefore any such body would need to be created with Maori.

The main fiscal tool in operation in New Zealand is its Emissions Trading Scheme. However, despite its recent reform, the scheme continues to exempt the agricultural sector from pricing its emissions. There are currently no other plans for green subsidy reform, though the country established the Friends of Fossil Fuel Subsidy Reform advocacy group of non-G20 countries. It has also taken significant regulatory steps forward such as banning the issuance of permits for new offshore oil and gas exploration in line with the Just Transitions work programme, legislating a clean car import standard (due to take effect in 2022) and mandating climate risk disclosure across the financial sector.