In brief
- Policy Reversals: New Zealand’s government is rolling back environmental reforms to boost the economy, including lifting the ban on oil and gas exploration and delaying agricultural emission pricing.
- Economic Context: The country’s economic growth was just 0.3% in the year to March 2024, with a significant current account deficit of 6.8% of GDP. Exports, crucial to the economy, make up nearly a quarter of it.
- Government Justification: Prime Minister Christopher Luxon’s centre-right coalition argues the changes are necessary to revitalize sectors like mining and agriculture. The government seeks to double mineral exports and reduce reliance on coal imports.
- Controversy and Criticism: Environmentalists criticize these moves as short-sighted, risking long-term environmental and economic stability for immediate economic gains.
- Climate Commitments at Risk: There are concerns that New Zealand may not meet its 2030 and 2035 emission reduction targets, potentially requiring costly offshore mitigation efforts.
- Sector-Specific Actions: The government plans to allow oil and gas exploration, streamline the mining approval process, and remove agriculture from the emissions trading scheme until 2030.
- Public Reaction: While some sectors, like farming, support the changes, environmental groups and the opposition Green Party express strong opposition, fearing damage to New Zealand’s green reputation and future competitiveness.
Source: Reuters
