Proposal Aims for Australia to Follow New Zealand to a Carbon Neutral 2050

EXCLUSIVE

Unwrap speaks exclusively to New Zealand’s Minister for Climate Change, James Shaw, as the Australian parliament grapples with proposed legislation for zero net emissions by 2050.

The New Zealand legislation was driven by a collation of community and business and earned unanimous support across all political parties. Australia is following a parliament-led approach which is almost certainly destined to fail.

“Business was absolutely critical to the Bill’s passage where we had no opposition in the House,” Minister Shaw told Unwrap.

Mr Shaw, a former PwC management consultant in the UK was keenly aware of the need for certainty for the business community.

“Over the past 20 years, climate policy was a political football and every time the Government changed the settings changed so it was a horrendous investment environment.

“We had large corporates and investors saying not only are we not investing in the green economy we are also not investing in the brown economy because we just don’t know where the ball is going to land.”

The NZ business sector were caught short in a few instances earlier when the policy settings following the 2008 election when John Key’s National Party took Government from Labour.

“The National government dramatically changed all the ETS settings and that caused havoc for businesses who invested under the previous settings.”

New Zealand businesses needed certainty to invest or the economy was at risk.

“What the private sector wanted was a bi-partisan legislation that gives them long term predictability.

“We know when governments change there will be arguments around the edges but they just want to know what the direction of travel is so they can make big calls.”

In late 2017, the New Zealand Sustainable Business Council formed the Climate Leaders Coalition.

The Coalition was formed by 13 CEOs from Air New Zealand, Fonterra, IAG, Ngāi Tahu Holdings, NZ Post, Ports of Auckland, Spark, Toyota, Vector, The Warehouse Group, Westpac, and Z Energy.

“The Climate Leaders Coalition provided me a forum to speak about the intention of the Bill, trying to create some investment certainty and so on.

“I framed it very much as a this is a Bill for business, this is going to make life better for business. Not that there won’t be costs attached, but businesses are fine with that they understand that.”

The New Zealand parliament passed the landmark Zero Carbon Bill with near-unanimous support in November 2019. In January 2020 an independent Climate Change Commission was launched to advise the New Zealand Government on how to meet targets set in law by the Zero Carbon Bill.

These targets include zero net emissions of all greenhouse gases (except biogenic methane) by 2050 and reducing emissions of biogenic methane to 24 – 47 per cent below 2017 levels by 2050, including to 10 per cent below 2017 levels by 2030 [1].

The targets listed above will be met with five yearly carbon budgets recommended by the Commission [2].

“The constraint of having to grow living standards and opportunities, and at the same time remove all sources of carbon dioxide from the economy is probably the greatest source of innovation you could possibly imagine,” adds Minister Shaw.

“Rather than thinking this just as this kind of constraint on economic development or business but really think of it as an opportunity to bring new innovations into the market.”

Large Format Retail businesses were already leading the sustainability space ahead of the proposed discussions in Parliament.

For example, New Zealand’s The Warehouse Group was the first large company in the country, and only the third major retailer globally, to commit to a carbon neutral goal. The first step is committing to reduce carbon emissions by 32% by 2030.

When asked about this initiative, Minister Shaw said, “I think that it is an incredibly bold leadership move, and it’s not an easy one.

“The Warehouse Group is a great role model for other companies to follow.”

The reduction of carbon emissions is not only focused on its stores, but out of their whole supply chain.

 “It’s an astonishingly tough target. The leadership that their founder, Sir Stephen Tindall, has put into climate change over 20 years has shown that he’s walking the talk with his own business.”

In Australia, the Spotlight Retail Group (SRG), which includes Large Format Retail brands Spotlight and Anaconda, has taken a proactive approach to reducing its carbon footprint.

SRG was also recently presented with the inaugural Sustainability Initiative Award at the LFRA Gala Awards Night to recognise and celebrate its practical measures towards environmental sustainability.

One of SRG’s initiatives include installing Building Energy Management Systems (BEMS).

BEMS monitor and control services such as lighting, power, heating, and air-conditioning to ensure the building operates at maximum levels of efficiency and removing wasted ​​​​energy usage and associated costs.

SRG installed its first BEMS in September 2014 in their Frankston Spotlight store. As a result, SRG saw a staggering 46.8% reduction in energy use.

Since then SRG installed 133 BEMS across their Spotlight and Anaconda stores and in some common areas owned by the Spotlight Property Group.

This resulted in an average of 18% reduction in energy use per store across the 133 stores and a further reduction of 2.5 million kWh in FY 18/19 compared to FY 17/18, even with store expansions and openings.

Spotlight Retail Group has seen a reduction of over 9,990 tonnes of CO₂ emissions as a result of the BEMS installations.

This is in addition to a 1,650-tonne reduction in CO₂ emissions from installing approximately 2250 solar panels, motivating SRG to continue rolling out solar panels in 2020 and 2021.

Climate change, the environment, and sustainability have been an increasing focus in recent years.

Businesses and governments around the world are taking proactive steps to reduce their carbon footprint and becoming more eco-friendly.

With Zali Steggall MP introducing a Bill to the Australian Parliament in the coming weeks, there is already significant opposition from Australian business.

Australian Chamber of Commerce and Industry chief economist Ross Lambie told The Australian the earlier the target, the faster and potentially more disruptive the necessary changes would be [3].

“Reducing emissions should be done in a way that is stable, predictable and provides long-term certainty for business and is consistent with our international obligations,” Dr Lambie said.

If a target was set too early, it would not allow the time for businesses to plan, prepare and implement changes across their networks to support Government targets.

The Australian Labor Party also recently recommitted to a net zero carbon emissions target for 2050, a policy former Opposition Leader Bill Shorten took to last year’s Federal election.

The Government is heading towards a technology-led solution.

The Prime Minister said recently “You want to get global emissions down? That’s what you need. You need technology that can be accessed and put in place, not just here in Australia, but all around the world.”

Former Minister for Resources Senator Matt Canavan has dismissed the idea of a net zero carbon emissions target and said “We are being told that we need all countries to hit net zero by 2050 to save the planet. Who are we going to buy carbon emissions from if all other countries have stopped emitting too? We can’t buy carbon credits from Mars.”

Once again New Zealand has taken a very different path to Australia.

[1] NZ Ministry for the Environment (2020), Climate Change Response (Zero Carbon) Amendment Act,

accessed at https://www.mfe.govt.nz/climate-change/zero-carbon-amendment-act

[2] Cooke, H. (7 Nov 2019), Zero Carbon Bill passes with near-unanimous support, setting climate change targets into law, stuff.co.nz, accessed at https://www.stuff.co.nz/national/politics/117244331/national-will-support-climate-change-zero-carbon-bill

[3] Lewis, R. (11 Feb 2020), Zero emissions target ‘may need nuclear’ energy input, The Australian, accessed at https://www.theaustralian.com.au/nation/politics/zero-emissions-target-may-need-nuclear-energy-input/news-story/07efb88cd09c5f8240a72104cc3980cc