New Zealand scraps clean, green policies to boost economy
WELLINGTON—New Zealand’s green credentials are at risk as the government rolls back environmental reforms in a bid to boost a flailing economy and fulfill promises made to its voters.
Since taking power last year, Prime Minister Christopher Luxon’s center-right coalition announced it will reverse a ban on oil and gas exploration, push the pricing of agricultural emissions back five years and encourage more mining.
This is part of a government shift in priorities towards increasing exports to support an economy that grew just 0.3 percent in the year to March 2024, its lowest growth for the same period since the pandemic hit in 2020, and that has a current account deficit at 6.8 percent of GDP.
Exports make up nearly a quarter of New Zealand’s economy.
“The economic situation for me, is arguably the worst of the set of circumstances that I can remember in my adult life,” Resources Minister Shane Jones said.
“So when the opportunity arose to champion the reemergence of the mineral sector it was driven by quite a brutal understanding of what our economic situation is,” he added.
The agricultural sector including fishing contributes 5 percent to the economy, and accounts for about 80 percent of total exports. The farmers who helped Luxon’s government come to power had said the environmental policies that the coalition government are reversing would have made dairy and meat too costly to produce.
But while farmers and companies have cheered the changes, environmentalists criticized the coalition for what they said were shortsighted policies.
“They are not looking at both sides of the ledger here, and the economic impacts of wrecking the joint for a few quick bucks for the government of this day, and therefore putting at risk the prosperity of future generations of New Zealanders,” said Nicola Toki, chief executive of environmental organization Forest and Bird.
Emission target dropped
Last week, the national carrier Air New Zealand dropped its 2030 emissions target, citing delays in new aircraft and the high prices of environmentally friendly fuel. The opposition Green Party said it was concerned that the government’s “low ambition approach to climate change” would encourage more companies to follow suit.
A report from the government Climate Commission released last week said there were significant risks to New Zealand meeting its 2030 and 2035 domestic emission targets and its promised reduction in methane from animals and waste.
It noted any shortfall in meeting these targets would increase the need for more offshore mitigation to meet the nationally determined contribution. Treasury last year forecast mitigation could cost as much as $14 billion.
The government has said it is working on a climate change plan that includes the planting of more trees, increasing renewable energy supply and investing in cutting edge technology to reduce emissions.
