New report says NZ must be bold on climate emissions

A new report says New Zealand needs to act now to reduce emissions and avoid climate catastrophe.

The Productivity Commission has released its findings into how the country can become a low-emissions economy, with transport and agriculture the two biggest obstacles to that goal.

Finance Minister Grant Robertson says things will have to be done differently in order to meet lofty emissions targets.

"This report is a timely reminder to New Zealanders that the change we're looking at will mean that we have to be innovative and look to different sources of energy."

He told The AM Show the Government is committed to reducing transport emissions, but that changes need to work for Kiwis used to a car-driven lifestyle.

"While I agree that big change is required, we have to bring people with us. It's got to be a just transition."

He denied that those changes would disproportionately target farmers, but said methane production is one of the country's major sources of climate emissions and must be lowered.

"[Farmers] don't have anything to fear whatsoever, but we've been absolutely clear that they will enter into the Emissions Trading Scheme and that is one of the examples of things that haven't happened in the past."

Climate Change Minister James Shaw said in a statement that farmers around the country are actually benefiting financially from "lower emissions practices", but Federated Farmers Vice-President Andrew Hoggard says farmers need to accept that reducing emissions may come at a cost.

"Our long lived gas, nitrous dioxide, is in the same boat as carbon dioxide, so if I'm being honest I've got to say yeah, we've got to do something about that and it may be there is a cost attached to that."

He told The AM Show that New Zealand should strive to lower emissions slowly and consistently, rather than risk harming the economy through drastic changes.

"Every year we reduce our intensity by 1.3 percent of emissions per kg of milk solids. I think we just keep that constant improvement going on, what we don't do is a slash and burn and destroy our agricultural economy to meet some goals.

"I think we've got to be careful about how we go about this and not, for want of a better word, 'virtue signal' and stuff our economy up."

Mr Hoggard pointed out that the country's methane production has increased by just 4 percent since 1990, while transport emissions are up 82 percent - but denied trying to shift the blame to another sector.

"I'm not pointing the finger at anyone…it's not one sector against another, it's all sectors coming up with solutions to go forward."

Victoria University climate change research professor Adrian Macey agreed that New Zealand needs to make urgent changes in regards to transport.

"What the commission is saying is we need to shift to electric cars much more quickly," he told The AM Show.

"The other point is that New Zealanders hold onto their cars way longer than most countries, so you've got emission locked in if you're buying a car now and hold onto it for 15, 20 years. That's not going to help."

He says the Government needs to "get stuck in" to incentivising Kiwis to drive less or to switch to electric cars.

"What you've got in that report is the most comprehensive look we've ever had at the whole of the New Zealand economy and how this transition might take place, and I think the Government will take notice of that."

The report's emissions targets for 2030 and 2050 will be difficult to reach, but Professor Macey says he's confident New Zealand can meet them.