A climate change advocacy group has filed an application for judicial review on Tuesday in the New Zealand High Court following claims that recent climate regulations fail to meet emissions reduction targets. Lawyers for Climate Action NZ Inc (LCANZI) filed the statement of claim against the Minister of Climate Change, claiming that the price and volume settings made under the Climate Change (Auctions, Limits, and Price Controls for Units) Amendment Regulations 2022 are incongruent with the nation’s commitments to mitigate climate change under the Emissions Trading Scheme (ETS).
LCANZI claims that the Minister and Cabinet prioritised cost of living concerns above the specific emissions goals outlined in the ETS, resulting in low carbon prices. In making amendments, the Minister must ensure that the price and volume settings are made in accordance with New Zealand’s international commitments under the Paris Agreement and its goal to reach net zero emissions by 2050. The action is seeking a declaration from the High Court that the regulations are inconsistent with the Climate Change Response Act 2002, and an order to remake the regulations in accordance with the Act’s requirements.
President of LCANZI, Bronwyn Carruthers stated:
The ETS is supposed to act like a tether on our emissions. But, Cabinet signalled that whenever tension starts to go on it will throw out more rope. Unsurprisingly, the price of ETS units has collapsed following the December decision. The Minister received expert advice from the Climate Change Commission which could have resulted in ETS settings that go some way to meeting our climate change obligations. Instead, regulations were weakened, moving us further away from meeting our obligations.
The ETS requires businesses to measure and report on their greenhouse gas emissions, and requires them to surrender one “emissions unit” (NZU) to the government for each metric tonne of greenhouse gases emitted. The government sets the number of NZU’s available to businesses each year in line with emissions targets, and sets the volume and price of new NZU’s which are available at auction.
In December, New Zealand’s Climate Change Commission made several recommendations regarding the volume and price settings for the forthcoming amendments. However, the Commission’s recommendations were rejected and the settings adopted in the regulations, “[made] available at low prices an additional 35 million units over the next five years”, which is more than one year’s worth of emissions for sectors within the ETS.