Client Alert: New Zealand Unveils Its First Emission Reduction Plan

Summary

The government of New Zealand announced this week the launch of a new multi-sector climate plan to address climate change and the transition to a low emissions economy. The new Emissions Reduction plan covers sector-specific policies and initiatives from the transport, energy and industry, building and construction, waste, fluorinated gases, agriculture, and forestry sectors. Building-level emissions goals and regulation are expected to accelerate as a result.

Background

Key aspects of the plan include goals to have zero-emissions vehicles reach at least 30% of the light fleet by 2035, reducing freight transport emissions by 35% a phase-out of coal-fired power generation, and financing initiatives through a NZ$4.5 billion (USD$2.8 billion) Climate Emergency Response Fund (CERF), with NZ$2.9 billion earmarked for deployment over the next four years.

Some of the country’s climate initiatives will be financed with green bonds, which the government aims to begin issuing in late 2022.

New Zealand’s climate initiatives also include plans to explore the extension of mandatory climate-related disclosures across a broader list of entities and activities. In 2021, the country introduced legislation requiring large banks, investors, and publicly listed companies to provide climate disclosures based on a standard developed in line with TCFD recommendations.

Major impact on the built environment is not anticipated as there was already existing regulation and pressure on building owners from a variety of stakeholders, but decarbonization expectations will accelerate for New Zealand assets, as well as asset-related climate disclosures.