Enabling voluntary action will get us to net zero faster
This week we sent in our submission on the Climate Change Commission’s draft report. Fundamentally, we share a lot of common ground with the Commission and its current thinking on the key issues. In particular, we support the urgency behind its drive to change New Zealand’s approach to emissions reduction and its focus on tackling energy and transport emissions as a priority.
There is no doubt that much of what the Commission is proposing is ambitious, but we also believe it’s achievable. While we largely support its recommendations, we have made the point that the Commission should take the opportunity to support greater understanding and recognition of the value the voluntary market has in emission reduction. We believe that reducing barriers to voluntary action will allow businesses to make positive decarbonisation decisions and enable market mechanisms to thrive. This does not contradict direct Government action, it complements it.
Businesses are increasingly becoming interested in mapping out their pathways to net zero as a way to mitigate their emissions and support 100% renewable electricity or zero carbon goals. Many of the members of the Sustainable Business Council and signatories to the Climate Leaders Coalition are leading the way on this, and the Sustainable Business Council has published a useful guide to Emissions Measurement and Management. As we have seen recently through the BOC deal with Kea Energy, the voluntary market provides the opportunity to mobilise finance from private institutions towards renewable energy investment, while also enabling these institutions to manage their emissions and reach their reduction goals.
The power of a market for energy certificates is that it lets generators offer different types of energy attributes, whether they are renewable, low-carbon, time-specific or have other properties - and lets companies decide what attributes they most want to associate with their energy use. The market can assign a value, and then if there is a gap between that value and what would be commercially viable, only at that point would government intervention be needed.
We also asked the Commission to explore the potential for renewable gas purchase obligations to support an orderly, financially-efficient transition away from natural gas. A purchase obligation, administered via energy certificate, could be implemented instead of, or alongside, a moratorium on new gas connections. This could complement the efforts First Gas and BOC, among others, are making towards green hydrogen.
We want to see the Commission explore options for enabling voluntary mitigation and clarifying the types of claims that can be made within New Zealand. There are huge gains to be made in encouraging the private sector’s desire for voluntary action for the benefit of the climate.
A big step for us, and the energy sector at large, would be for renewable energy certificates to be recognised in the commonly-used frameworks that help companies measure and reduce their emissions, for example the Ministry for the Environment’s voluntary guidelines for corporate GHG reporting. We have advocated for this in our submission and trust the Commission will see the merits of the scheme.
We believe that making voluntary action as easy as possible is the single biggest thing the Government can do to mobilise the power of the private sector for real action on climate change.
Read our full submission below. We’d welcome your views on the potential for voluntary action. Tell us what you think in a comment below or get in touch via the contact form.