Minister says buying offshore carbon credits ‘unrealistic’

New Zealand currently has to meet a gap of about 100 million tonnes of CO2e over and above planned domestic reductions to hit its United Nations Paris Agreement target, or nationally determined contribution (NDC) to 2030.

Since 2015, Aotearoa has pledged to purchase additional overseas mitigation to meet the target, most likely from developing nations, as domestic reductions were considered too expensive.

But Watts told the Climate Change and Business Conference on Tuesday that purchasing mitigation offshore would be unpopular with the public.

“When I stand up and say, ‘Guess what, I'm going to write a cheque for $4 billion in your taxpayer money to some country overseas,’ you know people go: 'I sort of want my hospital and I want my health care over that. You know, I love it, but I sort of want other stuff.'”

While bilateral agreements over emissions reductions are intended to have global benefits, Watts characterised offshore mitigation as benefiting countries other than New Zealand.

“The political reality of writing a cheque to someone overseas, for benefits that will be achieved overseas, is sort of nice, but I don't think it's realistic, and hence why the conversation, from a government point of view, is we need to do everything possible in order to reduce our domestic emissions at a profile that doesn't decimate our economy.”

However Watts did mention high-level conversations with international partners, which could lead to co-operation over emissions reductions. “The Prime Minister and I were in Thailand, the Philippines, Singapore. We've entered into high level MOUs around the ability to put in place article 6 mechanisms to be able to deal with trading of credits.”

Watts describes the NDC gap as “significant”.

New Zealand is currently aiming to make only about 50 million tonnes of domestic carbon savings from 2021-2030, so the additional 100 million tonnes needed for the NDC represents two-thirds of the country’s total emissions reductions over that period.

Watts told the conference that the Coalition Government “inherited” the gap from the previous Labour Government, conveniently forgetting that the plan to meet New Zealand’s international targets through purchasing offshore mitigation was first put in place by National. John Key's government made New Zealand's first Paris Agreement pledge in 2015, and at that time the gap between the domestic target and international target was estimated to be much larger as well as more costly.

“We didn't inherit a plan when we came in that would have hit that target, let's be really clear about that, other than writing a cheque overseas,” Watts said.  “The reality in a deficit situation, and a fiscal situation is politically, and I think just realistically, that is not the option that I think the majority of Kiwis want their government [to take]. They want us to do everything that we can do back here at home.”

Watts said the government was ”absolutely categorically focused” on minimising the gap. “All options are on the table in the context of us being able to do that. The challenge is, and I've got to be realistic and up front, even if we did everything that I could do today in the next 65 months, because time is my biggest challenge really, what can you do in 65 months?”

However the government has been widely criticised for cutting domestic climate initiatives.

The Climate Change Commission recently reported there is a “significant risk” Aotearoa will not even meet its domestic targets to 2030.

The Parliamentary Commissioner for the Environment has also slammed the government’s climate plan as designed to deliver the minimum reductions required - and possibly not even achieving that.