This report looks at how well current emissions reductions policies and plans set New Zealand up to meet its climate goals. The report shows emissions have declined in recent years, however it also shows more work is needed to meet Aotearoa New Zealand’s climate goals and international commitments. Overall, the country appears to be on track to meet the first emissions budget. However, this is highly uncertain, because several risk factors could tip the balance.

Key findings

• There are significant risks to meeting the second and third emissions budgets and the 2030 biogenic methane target.
• The agriculture and transport sectors show the largest risks, and insufficient action to reduce
  emissions in these sectors will put the second and third emissions budgets at risk. 
• If there are insufficient reductions in gross emissions for the second emissions budget (2026–2030), this cannot be made up by increased removals of carbon dioxide through forestry.
• The New Zealand Emissions Trading Scheme (NZ ETS) is an essential part of an effective policy package for reducing emissions, but it cannot itself ensure the emissions budgets are met. 
• A well-designed policy package is needed to deliver cost-effective and durable climate action that will achieve the country’s emissions budgets and 2050 target.
• Actions to meet climate goals can have positive impacts, such as reducing living costs, but there can also be negative impacts. The way those impacts fall on different sectors, regions, and communities, and across generations, needs to be managed to avoid inequities.
• There is currently a lack of clarity in how the Government plans to manage potential impacts of emissions reduction policy and to grasp opportunities to improve the lives of New Zealanders, particularly for those most affected by emissions reduction policies.