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New Zealand

NZ Initiative welcomes Government’s response to Interim Committee

The New Zealand Initiative has welcomed the decision by Minister of Energy and Resources Hon Megan Woods to accept the Interim Climate Change Committee’s recommendation to shift focus away from 100% renewable electricity to other more effective and less expensive emissions policies.

The Interim Committee found the Government’s 100% renewables policy would increase power prices by up to 39% and could effectively raise New Zealand’s emissions by preventing a transition off fossil fuels to electricity in transport and parts of industry.

As its top recommendation, the Interim Committee said the Government should prioritise other more effective emissions policies that would keep electricity affordable.

"Today’s decision is a win for the environment, and a win for households and businesses across the country," said Matt Burgess, a Research Fellow at the New Zealand Initiative and the author of Switched On!, an analysis of the Government’s 100% renewables policy that reached conclusions similar to those of the Interim Committee.

"The Interim Committee found the 100% renewables policy is the worst of all policies - higher power prices for worse environmental outcomes," said Mr Burgess. "The Government deserves credit for today’s decision."

The Interim Committee found the 100% renewables policy would:

- increase the average cost of electricity for households by nearly $270 each year

- increase the cost of electricity by 20% for commercial users and by 39% for industrial users

- reduce electricity sector emissions at a cost of up to $1,280 per tonne of carbon, far higher than alternatives

- affect low income households the most, making the policy regressive, and

- make blackouts up to 100 times more likely.

The Interim Committee found that although the 100% renewables policy would lower carbon emissions from the electricity sector by 1.1 million tonnes, higher electricity prices could prevent a net reduction of 4.6 million tonnes through the accelerated electrification of transport and industrial heating.

The New Zealand Initiative will shortly publish a review of the Interim Committee’s findings. That review will argue the most important contribution made by the Interim Committee is to demonstrate emissions policies can be tested.

"The Interim Committee has just shown the environmental and wellbeing benefits of simply checking emissions policies before they are implemented," said Mr Burgess.

"Emissions policies can work, but policies often fail and some even raise emissions. Every emissions policy should be tested."

"The Government could double the performance of its emissions policies just by not doing ineffective policies and doing more of what works."

Mr Burgess said that if testing was to have any influence on government policies, governance was crucial.

"Today’s announcement shows governments find it hard to ignore analysis when it is done by independent experts it appointed."

"The Government should ask its new Climate Change Commission to develop a permanent testing regime for all current and future emissions policies. The Commission is an ideal home for that function," said Mr Burgess.

Read more:

Switched On! Achieving a green, affordable and reliable energy future is available on our website.

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