Auditor-General's overview
E ngā mana, e ngā reo, e ngā karangarangatanga maha o te motu, tēnā koutou.
The need for governments to take action to respond to climate change and its impacts is urgent. The international consensus is that, to manage global temperature rise, action is needed in the next decade.
Many New Zealanders have been severely affected by extreme weather events in recent years, and some people have lost their lives. Storms and droughts are occurring with increased frequency.
These extreme weather events affect our livelihoods and our way of life. In 2022/23, almost $4 billion in insurance claims were made because of these events.1 It is estimated that the 2023 Auckland Anniversary weekend floods and Cyclone Gabrielle caused up to $14.5 billion in damage to physical assets.2
As well as responding to the domestic challenges of climate change, New Zealand has international commitments under the Paris Agreement to reduce its greenhouse gas emissions. To meet these commitments, all sectors of the economy will need to undergo significant transformation and change.
ClimateScanner
My Office is one of more than 100 audit institutions participating in the International Organisation of Supreme Audit Institutions' ClimateScanner initiative.
ClimateScanner requires supreme audit institutions (SAIs) to assess how governments are responding to climate change. The assessment identifies the strengths of that response and the challenges that each country faces.
ClimateScanner is made up of a rapid assessment methodology and an online tool that compiles global data about government action to address climate change.
An executive group of representatives from 18 SAIs from around the world (including New Zealand) developed ClimateScanner.
The United Nations Department of Economic and Social Affairs, the United Nations Development Program, the Inter-American Development Bank, and the World Bank also provided technical support in developing the ClimateScanner methodology.
Participating SAIs are carrying out rapid assessments of their government's actions to address climate change.
The ClimateScanner methodology looks at whether each participating country has public sector frameworks, structures, policies, and plans in place to respond to climate change. The methodology does not evaluate policy choices (which are outside SAIs' mandates) or priorities for how emissions will be reduced. It also does not evaluate the effectiveness or appropriateness of policies.
The Brazilian Federal Court of Accounts will lead work to consolidate the results from all participating SAIs to create a global overview of efforts to address climate change. Some preliminary findings will be presented at the 2024 United Nations Climate Change Conference (COP29) in November 2024.
The ClimateScanner methodology looks at three broad areas (referred to as axes): governance, public policies, and finance. We assessed New Zealand's response against prescribed criteria for each item in the three axes. We then assigned a rating for each item using a four-tier scale based on the level of implementation we observed.
What the ClimateScanner assessment told us
The results of our ClimateScanner assessment show that, in many ways, New Zealand's legislative, public accountability, and management structures are a strength of our response to climate change.
In particular, New Zealand has a comprehensive legislative framework and institutional arrangements that provide a structure to develop policies and plans for setting and meeting emissions reduction targets and for identifying and responding to climate change risks.
There are clear roles and responsibilities for public organisations to lead, co-ordinate, contribute to, and monitor the Government's actions in response to climate change. There is also comprehensive and transparent reporting at a high level about the effectiveness of those actions and the progress being made.
However, New Zealand did not rate as highly in other areas.
Some parts of local government actively engage with central government on climate change mitigation and adaptation through membership institutions Local Government New Zealand and Taituarā – Local Government Professionals Aotearoa. However, we did not find any formal mechanisms that would enable local and central government organisations to jointly create and implement policies related to climate change.
The tracking of funding for climate change-related initiatives needs to improve. Our assessment shows that although Budget 2024 assigned some funds for specific initiatives and programmes, it is difficult to determine how this funding aligns with the Government's overall climate goals and commitments.
The Climate Emergency Response Fund previously provided some information about how government investment aligned to domestic climate goals, but this fund has recently been disestablished.
It is important that Parliament and the public have a clear understanding of the outcomes that public spending achieves. As I have noted elsewhere, and on many occasions, the current structure of financial reporting in the public sector rarely provides information in a way that allows Parliament and the public to connect the goals the Government is trying to achieve with public spending and reporting on progress. Climate change is no exception.
The Parliamentary Commissioner for the Environment recommended that the public finance system be reformed to make public organisations' spending on environment outcomes more accessible and explicit. He has called for better access to data to support this.
As the Climate Change Response Act 2002 requires, the Government has recently consulted on its proposed policies for the second Emissions Reduction Plan, which is due to be published in December 2024. Some actions and policies in the first Emissions Reduction Plan have been discontinued, and new policies are being introduced.
In addition, work to implement actions and policies for reducing emissions is more developed in some sectors than in others.
New Zealand also has a high-level plan for adapting to the effects of climate change, called the National Adaptation Plan. However, the planning for and progress of actions for specific sectors were mixed. This is consistent with the Climate Change Commission's findings that future plans could have more precise and outcomes-focused goals and objectives, as well as specific measurable outcome targets and milestones.3
What next
The results of our assessment will be consolidated with the results of the assessments of SAIs in other participating countries. This will create a display of global data that will summarise the strengths of, and challenges in, government efforts to take action on climate change around the world.
ClimateScanner assesses whether countries have institutional arrangements and policies to respond to climate change. However, high ratings in some aspects of our ClimateScanner assessment do not mean that New Zealand's climate response is on track or that we are doing enough.
In September 2024, the Government published its first quarterly reporting on progress towards nine government targets.4 Target 9 is to reduce greenhouse gas emissions.
The reporting assessed that New Zealand is "on track" to meet the first part of the target, which is to keep net emissions below 290 Mt CO2-e from 2022 to 2025.5 The reporting assessed that it is "probable" that New Zealand will meet the second part of the target, which is to keep net emissions below 305 Mt CO2-e from 2026 to 2030.
The Climate Change Commission recently stated that, although we have made some good progress in reducing emissions, our goals for meeting emissions reduction targets are at risk. The Commission also stated that adaptation is not happening on the scale or at the pace that is needed.
The Parliamentary Commissioner for the Environment also commented that New Zealand faces broader vulnerabilities from climate change than the National Adaptation Plan addresses. For example, there are risks associated with:
- relying heavily on forestry to reduce net emissions;
- the financial contingent liability from needing to achieve the Nationally Determined Contribution by using offshore carbon credits;6 and
- not meeting emissions budgets because Emissions Reduction Plans do not have enough margins for error.
Responding to climate change is complex and challenging. There is much more to do. My Office will maintain an active programme of work to assess the public sector's performance in responding to climate change. We will use the results produced from ClimateScanner to help us identify where we might consider carrying out future work.
I encourage public organisations to consider the strengths and weaknesses that this report and other reports produced by my Office, the Climate Change Commission, and the Parliamentary Commissioner for the Environment identify. I encourage them to act with urgency to attend to those areas that need improvement.
I thank the staff from the public organisations who provided information to help my staff complete the ClimateScanner assessment.
Nāku noa, nā
John Ryan
Controller and Auditor-General | Tumuaki o te Mana Arotake
1 November 2024
1: Climate Change Commission (2024), Progress report: National Adaptation Plan – Assessing progress on the implementation and effectiveness of the Government's first national adaptation plan, page 27, at climatecommission.govt.nz.
2: Climate Change Commission (2024), Progress report: National Adaptation Plan – Assessing progress on the implementation and effectiveness of the Government's first national adaptation plan, page 4, at climatecommission.govt.nz.
3: Climate Change Commission (2024), Progress report: National Adaptation Plan – Assessing progress on the implementation and effectiveness of the Government's first national adaptation plan, at climatecommission.govt.nz.
4: See Department of the Prime Minister and Cabinet (2024), Target 9: Reduced net greenhouse gas emissions, at dpmc.govt.nz.
5: The Government expresses its emissions reduction targets in megatonnes of carbon dioxide equivalent, written as Mt CO2-e.
6: A Nationally Determined Contribution outlines the contributions a country will make to meet the goals of the Paris Agreement.