NZ could face hefty bill as new funding target agreed at COP29

RNZ

The government may be faced with a hefty bill to up its contribution to international climate change efforts, as a new target is set to help developing countries decarbonise.

In the final hours of overtime of the UN’s climate conference COP29 in Azerbaijan, a new target was set for richer, developed countries to help fund efforts in developing nations to move away from using fossil fuels.

It promised a contribution of US$300 billion (NZ$500b) each year by 2035 – a number which was immediately decried by its intended recipients, who were present in the room, as “insufficient”.

New Zealand’s current contribution is based on its assessment of its share of $100 billion – the previous international target, Compass Climate head Christina Hood said.

“We’re currently providing $325 million a year, from 2022 to 2026, and this is going to really set the expectation that that number goes up rather than down.”

“It’s really important to not think of this as reparations money, or countries putting their hand out for cash, it’s really to make investments in things that are going to make a difference.”

The aspirational number was US $1.3 trillion (NZ$2.23 trillion) a year – and $300 billion was a starting point.

“So yes, there is a huge gap there.”

Indonesia wanted to shut down all of its coal-fired power stations by 2040 – “and they’re going to need help with that”.

Cindy Baxter, a COP veteran who has been at all but seven of the conferences, said developed countries should be bringing money to the table to help the developing world decarbonise – and the $300b sum was “nothing” compared with the amount being spent on fossil fuel subsidies globally.

Climate Change Minister Simon Watts said in a statement: “The New Collective Quantified Goal is collective, and will involve a range of sources including public and private funding.”

No decisions have yet been made on future funding.

University of Canterbury professor Bronwyn Hayward said aspirations for COP29 were low from the start, “given this meeting was held in an oil state with an estimated 1773 fossil fuel lobbyists present”.

“The gavel came down at lightning speed, with the president leaving no time for comment and barely making eye contact with the room.”

She said the objections immediately followed thick and fast, with India’s negotiator Chandri Nadan calling the agreement an “optical illusion”, and nations like Fiji and the Alliance of Small Island States calling the funding “insufficient”.

A new carbon credit trading deal reached in the final hours of COP29 has been criticised as a free pass for countries to slack off on efforts to reduce emissions at home.

The deal, sealed at the annual UN climate talks nearly a decade after it was first put forward, will allow countries to buy carbon credits from others to bring down their own balance sheet.

New Zealand had set its targets under the Paris Agreement on the assumption that it would be able to meet some of it through international cooperation – “so getting this up and running is really important”, Compass Climate head Christina Hood said.

“It’s a tool, it’s neither good nor bad, but there’s going to have to be a lot of scrutiny on whether the government is taking a high-ambition, high-integrity path, or just trying to do the minimum possible.”

The plan had taken nine years to go through because countries determined to do it right had been holding out for a process with the right checks and balances in place, she said.

As it stood, countries would have to report yearly to the UN on their trading activities, but it was up to society and other countries to scrutinise behaviour.

Cindy Baxter, a COP veteran who has been at all but seven of the conferences, said it was in-line with the way New Zealand wanted to go about reducing its emissions.

“We’re not alone, Switzerland is similar and Japan as well, but certainly New Zealand is aiming to meet by far the largest proportion of our climate target, [out of] anywhere in the OECD, through carbon trading.”

The new scheme fell under Article six of the Paris Agreement, and a statement from COP29 said it was expected to reduce the cost of implementing countries’ national climate plans by up to US$250 billion (NZ$428.5b) per year.

COP29 president Mukhtar Babayev said “climate change is a transnational challenge and Article six will enable transnational solutions. Because the atmosphere does not care where emissions savings are made.”

But Baxter said there was not enough transparency in the scheme, and plenty of loopholes. One of the issues was ensuring projects resulting in carbon credits continued to reduce emissions after the credits were traded.

“For example, if you’re trying to save some mangroves in Fiji, you give Fiji a whole bunch of money and say this is going to offset this amount of carbon, but what if those mangroves are destroyed by a drought, or a great big cyclone?”

Countries should be cutting emissions at home, she said.

“And that is something New Zealand is not very good at doing, has a really bad reputation for doing. We’ve either planted trees, or now we’re trying to throw money at offset.”

Greenpeace spokesperson Amanda Larsson said she, too, was concerned it would take the onus off big polluters to make reductions at home, calling it a “get out of jail free card”.

“Ultimately, we really need to see significant cuts in climate pollution,” she said. “And there’s no such thing as high-integrity voluntary carbon markets, and a history of a lot of junk credits being sold.”

Countries with the means to make meaningful change at home should not be relying on other countries stepping up, she said

The Green Party foreign affairs spokesperson Teanau Tuiono said there was strong potential in the proposal, but it was “imperative to ensure the framework is robust, and protects the rights of indigenous peoples at the same time as incentivising carbon sequestration”.

It should be a wake-up call to change New Zealand’s over-reliance on risky pine plantations and instead support permanent native afforestation, he said.

“This proposal emphasises how solving the climate crisis requires global collaboration on the most difficult issues. That requires building trust and confidence, by meeting commitments countries make to each other.

“Backing out of these by, for instance, [https://www.rnz.co.nz/news/political/519058/bill-to-resume-oil-and-gas-exploration-set-for-later-this-year

restarting oil and gas exploration directly against the wishes of our Pacific relatives], is not the way do to that.”

Conference overall ‘disappointing and frustrating’

Baxter said it had been “very difficult being forced to have another COP in a petro-state”, where the host state did not have much to gain by making big progress.

“What that means is that there is not that impetus to bang heads together and get really strong agreement,” she said.

But the blame could not be placed entirely on the leadership.

“The COP process is set up to work if governments bring their A-games, and they don’t,” she said.

“People should be bringing their really strong new climate targets [and] very few are doing that.”

Another deal was clinched in overtime of the two-week conference, promising US$300b (NZ$514b) each year by 2035 for developing nations to tackle climate emissions.

Reuters has reported the funding’s intended recipients have criticised it as “woefully insufficient”.

Developed countries should be bringing money to the table to help the developing world decarbonise, Baxter said, and this sum was “nothing” compared with the amount being spent on fossil fuel subsidies globally.

Hood said the aspirational number to really make a difference was $1.3 trillion a year – and $300 billion was a starting point. “So yes, there is a huge gap there.”