How a carbon-neutral economy could impact Kiwis' pockets

Panel beater Grant Blackwood imports classic cars but it could soon hit him in the pocket.

The Productivity Commission has been trying to work out how to transition to a carbon-neutral economy by 2050.

Yet it's found it requires quite a big shift in the behaviour of New Zealanders, Commission chairman Murray Sherwin says.

One of its recommendations is a scheme where buyers of old, inefficient vehicles pay to subsidise low emissions and emissions-free vehicles.

"I wouldn't want to subsidise anyone, we're already subsidising the Government aren't we?" Mr Blackwood says.

The Productivity Commission's report says that by 2050, 80 percent of New Zealand's cars need to be electric - yet we still need to build the infrastructure to support it.

"Currently we don't have the electricity to support that so we'd have to build that over the next 30 years," Climate Change Minister James Shaw says.

The report estimates carbon prices may need to be 12 times higher than they are currently, something which would impact petrol prices.

A carbon levy is collected on every litre purchased. At the moment Kiwis pay 4.7 cents per litre.

But the Commission estimates this may need to go up to 55 cents per litre - and that's on top of the fuel tax you already pay.

"It'll affect everybody, it's awful. I can't believe they're even contemplating this," Mr Blackwood says.

But technology could yet save us from the taxes.

Mr Sherwin says they'll only be needed if we can't find other ways to reduce emissions.

"That's one of the more extreme numbers that comes out of the modelling and it turns up in 2050 if we don't get much help from new technology," Mr Sherwin says.

The report also calls for millions of hectares of farmland to be converted to forestry and notes that planting more trees is just a temporary solution.

So until there's a way to store carbon or stop animals burping, New Zealand's electric car future is essential.