Dec 19, 2024
Rewiring Aotearoa's submission to the Ministry for the Environment on NDC2

Focusing on the emissions reductions at home through electrification is a major opportunity (and challenge) for Aotearoa NZ. Homes, farms, and businesses must play a role in driving emissions reductions through electrification and the potential must be recognised and addressed to our 2035 international climate change target.

Our submission

Prioritising the rapid electrification of homes, farms, and businesses across Aotearoa NZ is a significant opportunity that should be central to NDC2. The emissions reduction potential is substantial (see Figure 1 below) and, importantly, can be achieved quickly, cost-effectively, and with existing technology – unlike many other sectors. Our research also highlights that widespread electrification offers multiple benefits, including cost savings, enhanced resilience, and improved public health across the economy.

Figure 1: Domestic emissions sankey

In regard to the relationship between NDC2 and ERP2 (being that NDC2 will be informed by emissions reductions from ERP2 as reductions between 2026-2030 will shape progress for 2030 and beyond) we would like to support this submission with our submission on ERP2 (attached). 

Answers to selected consultation questions

  1. Do you have any comments on the Climate Change Commission’s advice? 

Overall, we support the direction of the advice made by the CCC. It provides a pragmatic overview of the opportunities and challenges in setting NDC2. In short, we agree with all of the key findings from the advice and encourage the Government to pick these up. 

The key takeaway from the CCC’s advice is its finding that domestic action could achieve significant emissions reductions (up to 69% below 2005 levels by 2035). This presents a major opportunity (and challenge) for Aotearoa NZ. One that we believe highlights the significant role that homes, farms, and businesses can play in driving emissions reductions through electrification. This potential must be recognised and addressed in setting NDC2. 

Our work (see the Electric Homes and Electric Farms reports) shows that electrification offers significant emissions reduction potential, yet the focus on trade emissions has overshadowed the opportunity for rapid domestic emissions cuts in current policy. Importantly, emission reductions in homes, farms and businesses can be achieved cost-effectively, quickly, and with existing technology, which is not the same for all areas of the economy. Empowering and enabling widespread electrification is a significant opportunity for Aotearoa NZ to deliver positive outcomes on emissions reduction, cost savings, resilience and public health all at the same time. 

This approach can also be viewed from the perspective of 'machine substitution’, which reflects the process of replacing fossil fuelled machines that are either old or broken with electric alternatives, offering multiple benefits. Our modelling conservatively estimates that household electrification could reduce emissions by 11.5 Mt CO2 by 2030, providing greater certainty in meeting future emissions budgets and reducing the need for offshore carbon credits to meet NDC1 and NDC2.Based on Treasury’s modelling, this could save the government $0.4 to $2.5 billion in avoided offshore mitigation costs. Additionally, due to falling CER costs and the efficiency of electric machines, accelerated electrification could save New Zealanders up to $8 billion by 2030, as the savings from operating electric machines far outweigh the costs of purchasing them.

We note that these are conservative estimates of the potential rate of household electrification as projections assume machines and vehicles are replaced at the end of their life. Policies that encourage faster adoption could achieve even more rapid reductions. Given Aotearoa NZ has reached its electrification tipping point, policies that reduce barriers to electrification could trigger rapid uptake of electric machines and vehicles. In this case, Aotearoa NZ could see much deeper reductions than the 11.5 Mt CO2 which we have conservatively estimated. Our analysis for the Investing in Tomorrow report showed that  households could cumulatively save $95 billion by 2040 with an aggressive electrification campaign and also avoid millions of tonnes of carbon emissions per year by removing the need for expensive and mostly imported fossil fuels in exchange for more electricity generated in Aotearoa NZ. 

Emissions reductions achieved through electrification reflect structural changes to the energy system and are very unlikely to be undone. These are opportunities for enduring, low-cost abatement that benefits the entire country, reduces reliance on offshore mitigation and puts us on track to achieve our domestic and international climate commitments. 

In this regard, immediate action is critical for achieving meaningful emissions reductions. And that delaying action or enacting policies that inadvertently support high-emission activities will only result in a more expensive offset bill. For the modelled trajectory, 11.5 Mt CO2 will be abated by 2030, with electrification accelerating after 2030 as more machines reach the end of their life. By 2035, 52 Mt CO2 will be abated, at 10 Mt per year. Starting now will position us well for NDC2 and the 2050 targets.

  1. What factors should the Government prioritise when setting NDC2? 


a) Represent New Zealand’s highest possible ambition in light of national circumstances 
b) Align with the Global Stocktake recommendations 
c) Align with the temperature goal of the Paris Agreement (to limit global warming to well below 2°C, and pursue efforts to limit global average temperature rise to 1.5°C) 
d) Minimise costs from meeting the target 
e) Minimise impacts to the economy 
f) Ensure there is a clear plan for delivering the target 
g) Consider New Zealand’s relative standing to other comparable countries/economies. 

Most of the factors mentioned above make sense and should be considered when setting NDC2. However, we hold the following concerns:

  • Regarding ‘a’. The phrase "in light of national circumstances" is vague and open to interpretation, which could undermine the clarity and ambition of NDC2. Over time, this flexibility may be used to justify lowering commitments, as shifting political, economic, or social conditions could be framed as reasons to reduce ambition. This ambiguity risks undermining long-term climate goals and accountability. To ensure sustained progress, the criteria for adjusting ambition must be clearly defined to prevent it from being used as an excuse to delay or weaken action.
  • Regarding ‘d’ and ‘e’. The term ‘minismise’ used here is problematic as it reinforces a narrative based on outdated economic and energy assumptions, that are likely to restrict the level of domestic action we are advocating for. Evidence shows that electrification does not necessarily incur higher costs, and delaying it will impose greater economic burdens on future generations by prolonging fossil fuel dependency. This "least-financial cost" view overlooks the far-reaching costs of delayed electrification on society, biodiversity, and the environment. Electrification is not a cost to the economy but an investment in a more sustainable, prosperous future, offering long-term energy savings, economic stimulation from increased household spending, and significant co-benefits.

  • Regarding ‘f’, we want to stress the need for consistency across the language, assumptions, models and narratives used in setting and communicating NDC2. We had found that the proposed ERP2 had failed to communicate a clear actionable path toward success. 
  • We would also like to propose that a new priority point is added - measures to empower Māori. This is vital to enhance the mana of Tangata whenua and ensure strong representation of the Te Ao Māori view in decision making regarding climate-related issues, impacts and mātauranga Māori led solutions to climate change. Climate change has affected many Iwi, hapū and whānau across the country, particularly in coastal areas. This devastation has isolated communities, destroyed marae, and impacted Māori ability to practise kaitiakitanga (guardianship) and rangatiratanga (authority) of land. 
  1. What factors in New Zealand’s economic outlook should be taken into consideration when setting NDC2? 

Similar to what has been mentioned above. Funding or investment of capital should instead be prioritised so that it remains in Aotearoa NZ to address domestic emissions directly (through electrification), and only purchase offshore carbon credits once domestic action is maximised. This is a more plausible pathway to reducing the costs of climate change to future New Zealanders, and also sowing the seeds for future prosperity through innovation, technology uptake and improved productivity. 

It is important to view this as an investment into a more credible pathway to future economic prosperity, rather than a cost. Where the return on that investment is progress towards achieving our domestic and international climate commitments. While also delivering lower costs of energy over the long run, economic stimulation that comes with greater household discretionary spending, and co-benefits of electrification which include lower respiratory-related health costs, and the avoided costs of climate change by contributing to the global energy transition. 

The government urgently needs to undertake credible quantitative analysis of the integrated economic impacts of decarbonisation to make credible decisions Given international evidence, we believe that postponing the shift away from fossil fuels will only lead to increased inflation and higher living costs. Economic efficiency is an important principle, but this needs to be dynamic efficiency across time and across a range of variables, not static efficiency applied in the present to carbon abatement costs only.

  1. What factors do you think are most important for deciding a “fair share” for New Zealand for its NDC2? 

We have decided not to answer this question. 

  1. Should NDC2 be set at a level that is achievable with domestic action only or should it be set at a level that is achievable with a mix of domestic action and international cooperation (offshore mitigation)

As above, we believe that funding or investment of capital should be prioritised so that it remains in Aotearoa NZ to address domestic emissions directly (through electrification), and only purchase offshore carbon credits once domestic action is maximised. This is a more plausible pathway to reducing the costs of climate change to future New Zealanders, and also sowing the seeds for future prosperity through innovation, technology uptake and improved productivity.

Read moreDownload the document here

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