How to judge the Emissions Reduction Plan

It was probably the biggest announcement of the year; maybe second only to the Budget. However you rank it, the Emissions Reduction Plan is a landmark document that will determine climate policy for years to come.

Is it any good? Is it good enough?

Yes or no seems too binary for such a complex document, so we looked at it through three lenses:

–   Direction: Is it headed the right way?

–   Velocity: Does it address the challenge with the alacrity required?

–   Acceleration: Does it speed up the good change already underway?  

Overall, we believe the answers are yes, sometimes and no. Let’s look at it by sector.


At 48%, ag is our biggest emitter yet the sector continues to receive preferential treatment. It’s not in the Emissions Trading Scheme (ETS). It’s the only industry allowed to differentiate between CO2 and methane. It has been set lower reduction targets: everyone else is aiming for net zero by 2050, methane is aiming for a 24-47% reduction (and how about that range!). Even if it does implement the scheme known as He Waka Eke Noa, emission pricing won’t start until 2025 and then at a 90% discount. It’s almost as if ag has the ear of the government.

Direction of travel? Fail. Velocity? Standstill. Acceleration? Glacial. 

The ERP provides $339m for research into ways to reduce agricultural emissions (methane and nitrous oxide) – a substantial increase on funding. Ironically this will be paid for through the ETS, which ag does not fund, meaning farmers are free-riding on other emitters at present. 

However, we hope this research will finally deliver some solutions, at some point in the future and is additional to what’s already being spent. But you know what would reduce emissions immediately? Fewer cows. On that simple formula, the plan is silent.


There’s more to be optimistic about here. Transport is our second-largest emitter and in Auckland the largest, by far. The ERP’s $569m cash-for-clunkers scheme is a good idea. It addresses equity concerns and schemes like this have worked in Australia, the US, China and Europe.

Direction: good.

But why are transport ambitions so modest? The ERP proposes a trial of just 2500 cars over two years and it appears to only apply to cars – not bikes or scooters. It also promises co-funding to electrify 1000 government vehicles. Why not set a target – say 10%? Why not more? The ERP talks about ‘transitioning the fleet’. Good idea! But then it doesn’t say anything about how, when and where.

And the ERP fails to address the most powerful lever of mode-change: infrastructure. As is proven in cities such as Paris, London and even in Auckland, if you build a cycle lane they will come. Climate infrastructure, along with the much-heralded public transport subsidies, receive no additional support leaving local councils to carry the burden. This seems a mistake and maybe the Budget will address it.

And one more thing. The ERP has been criticised for having too much carrot and not enough stick. Transport is a good example. Without congestion pricing, fuel taxes and import restrictions on high emission vehicles, acceleration in mode shift will rely on coaxing people out of their cars, which will be expensive and slow.

Velocity? Snails-pace. Acceleration? Look at that escargot.

Industrial heat

This is a high point. The ERP offers $678m to assist industry move from coal- or gas-fired heat to electric. Good direction! A recent Contact Energy report shows that the economics of electrical heat is close to competitive with almost equivalent to fossil fuels; so this subsidy might just tip the scales for many business. Fonterra alone has over 20 factories with such dirty furnaces. Velocity: speedy!

And better still, the sum increases the already successful Government Investment in Decarbonising Industry (GIDI, $69m invested to date) almost ten-fold.

Acceleration: white hot.


A range of smaller initiatives look promising here. They range from encouraging biomass as an energy source to further increasing supply of native seedlings. Technical changes to the ETS will provide better value for those planting native forests, and additional R&D may drive improved rates of carbon sequestration in the forests of the future. 

Direction: good. Velocity and acceleration: modest. 


There will be more to say about the ERP as we absorb the whole 340-page package as well as announcements in the Budget due this week. But it’s clear that while the direction of travel in the ERP is right – apart from agriculture – the lack of urgency is disappointing. Using our lens we’d say:

Direction: the ERP sets up a good framework for action. 

Velocity: We’ve known what we have needed to do for 20-odd years but delay, obfuscation and (now) political pragmatism have slowed us down.

Acceleration: We live in hope.

Rohan MacMahon and Jez Weston are directors of the Climate VC Fund