New Zealand: What is at stake on 23 September (NZ elections) for climate change/environment policy?

Under any and all scenarios, there will be more traction under climate change policy in the next term and a further rewriting of environment and planning law.

Climate change

The table below summarises the policy positions of the four parties most likely to feature in post-election coalition negotiations. All have plans for the Emissions Trading Scheme. New Zealand First and the Greens would dismantle it, Labour and National would strengthen it – although in different ways and to different degrees.

National

National is reviewing the ETS but has said that it will not implement any changes until at least the end of 2020. It has revealed some of its reform directions and would make further announcements next year if re-elected.

In-principle decisions to date would:

• allow emissions units to be auctioned
• limit the use of international units (once the ETS is reopened to world carbon markets)
• establish a new price ceiling to eventually replace the $25 cap, and
• introduce more predictability into the ETS by coordinating supply settings (unit volumes, price caps) over a five-year rolling horizon.

Labour, the Greens and New Zealand First have all picked up on a recommendation from the Parliamentary Commissioner for the Environment that New Zealand should adopt a version of the UK model and legislate to:

• set up an independent Climate Change Commission to recommend carbon targets
• put at least one emissions target into law making compliance mandatory, and
• establish dedicated "carbon budgets" with annual progress reports. Each budget would span five years and would cap the number of carbon credits that could be purchased offshore within the horizon period.

Climate Change Minister Paula Bennett has not ruled out a Commission as "something which might be worth looking at in the future" (suggesting that it may be a concession National could offer New Zealand First in coalition talks).

Reinforcing this possibility is that National is putting a lot of stock on the Productivity Commission inquiry into how New Zealand might transition to a low emissions economy without undue damage to incomes and wellbeing and from the Commission's issues paper, released last month, it seems the Commission will be looking at the UK legislation.

The Commission will release a draft report in February and is due to have its final recommendations with the government by 30 June 2018. We do not expect this timeline to be affected by the elections.

Labour and the Greens

Labour and the Greens would take a more urgent approach to the climate change challenge than has National, and would bring in agriculture as part of their all sector all greenhouse emissions approach.

Labour would phase agriculture in and has stated it wants to recognise on farm improvements. This may incentivise and reward investment in good farm practices but will add complexity to both the ETS design and administration.

The Greens policy would replace the ETS with a Kiwi Climate Fund, put various charges on greenhouse gas emissions and invest the revenue in tree planting. They would also provide carbon sequestration payments for trees planted and use any surpluses in the Fund to pay an annual dividend to all New Zealanders 18 and over.

These proposals will require a much sharper focus from business given their potential impact on various sectors of the economy.

Resource management/planning policy

National

For National, the Resource Management Act is unfinished business. Although it has made a raft of changes, mostly geared toward streamlining consent processes, its efforts to tilt the RMA more toward development have been frustrated.

The next Parliament will not be any easier, as New Zealand First is much more aligned with Labour and the Greens on the RMA. All three parties, for example, delivered scathing minority reports on the Resource Legislation Amendment Bill – although National was able to pass it with the support of the Maori Party.

So National is looking to the blue skies urban planning review which it commissioned from the Productivity Commission last year to achieve sweeping reform. The Commission delivered its final report in April and National has now announced its response. It plans to split urban planning laws out of the RMA into a separate statute.

Announcing the policy, Finance Minister Steven Joyce said: "The RMA's one-size-fits-all approach has restrained the development of our cities, dragged on their economic performance and restricted the supply of much needed housing and infrastructure".

Labour has also welcomed some of the Productivity Commission's recommendations, in particular its backing of infrastructure bonds, targeted rates, more competitive urban land markets and Urban Development Authorities (UDAs).

Both parties support UDAs and the use of long-term bonds to fund residential infrastructure.

National is developing the mechanisms to achieve this through Crown Infrastructure Partners which will "set up special purpose companies to build and own new trunk infrastructure for housing developments in return for dedicated long term revenue streams from councils through targeted rates and volumetric charging for the use of infrastructure by new residents".

Labour would establish an Affordable Housing Authority to develop a 30 year pipeline of land for residential, commercial and industrial development.

Labour

Labour considers that the RMA has been scapegoated for failures for which it is not responsible and that it has been pulled out of shape by the huge number of amendments made to it since its passage in 1991 – and particularly in the last nine years.

Labour would roll back many of the changes National has introduced – in particular:

• the ministerial powers to override council functions and plan provisions
• the power to standardise plan formats and definitions, including content and substantive provisions
• the limits to public notification and participation, and
• the curtailment of appeal rights.

It has not ruled out repealing and replacing the RMA but we consider this unlikely as it would mean losing the accumulated case law. Any new legislation a Labour-led government would introduce would replicate many of the RMA's basic features – sustainability principles like those in Part Two, an emphasis on participation and local decision-making, informal first hearings with appeal rights and provisions for national guidance.

Labour would also:

• fund the Ministry for the Environment to take prosecutions for errant behaviour where the regional council won't
• convene an expert body to provide advice on how to ensure that the Act remains fit for purpose, and
• make greater use of National Policy Statements (NPS), including new NPSs to protect estuaries, to constrain urban subdivision on highly productive elite and versatile soils (as in Pukekohe) and on affordable housing and onshore oil and gas exploration.

The information in this article is for informative purposes only and should not be relied on as legal advice. Please contact Chapman Tripp for advice tailored to your situation.