Chapter 3 Equitable transition
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This transition is an opportunity to work together to improve wellbeing, become more productive, increase resilience and reduce inequality. All New Zealanders can benefit from the changes we need to make to transition to a low-emissions economy. This is our chance to create new jobs through low-emissions industries, lower the cost of living and raise our living standards.
Our transition will require us to change the way we do things over the next 30 years. Those changes will bring us opportunities, build our low-emissions economy and lead to higher-wage jobs. It will mean new ways of getting around, and changes to how and where we live – changes that can improve our wellbeing and increase access to jobs and learning opportunities. We need to make sure those opportunities work for everyone so that our transition is just, fair and inclusive for all New Zealanders. Workers, whānau and households, business and industry, Māori, Pasifika, regional communities and economies, disabled people and wider communities need to be supported through this period of change.
The Government’s approach to supporting New Zealanders through the transition is built around five objectives:
Actions to achieve those objectives include:
Our transition to a productive, sustainable and inclusive economy will transform many aspects of our society. Reducing emissions will help our economy prosper, leading to higher wages and more productive and resilient businesses. A careful and well-managed transition that includes everyone can ensure that we reduce our emissions while improving wellbeing for all.
To ensure that this transition is equitable, fair and inclusive, we will need to:
The Government has heard that there should be no delay in acting on climate change, but we need to proactively manage the transition to ensure that it is an equitable one.
Under the Paris Agreement, the Government has agreed to ‘take into account the imperatives of a just transition of the workforce and the creation of decent work and quality jobs…’. The Government also signed the ‘Supporting the Conditions for a Just Transition Internationally’ [UN Climate Change Conference UK 2021 website] declaration at the 26th UN Climate Change Conference of the Parties, which includes commitments to:
The Climate Change Response Act 2002 requires the emissions reduction plan to include a strategy to mitigate the impacts that reducing emissions and increasing removals will have on employees and employers, regions, iwi and Māori, and wider communities, including the funding for any mitigation action.
The Government’s strategy to mitigate the impacts for these groups is built around the following objectives.
Specific policies and actions to mitigate the impacts of the transition, and lay the foundations for an equitable transition, are addressed under these five objectives. These include new programmes and initiatives that will be rolled out across the early years of this emissions budget period as well as established measures that are already being implemented. An equitable transition for Māori is addressed in chapter 2: Empowering Māori.
The Government has established the Climate Emergency Response Fund (CERF) with an initial NZ$4.5 billion down payment, funded by proceeds from the New Zealand Emissions Trading Scheme (NZ ETS). In addition to funding initiatives to directly reduce emissions, the fund was also established to support initiatives to manage the impacts of policies to reduce emissions. As an enduring, multi-year fund, the CERF provides flexibility to allocate funding to address the distributional impacts of the transition as they emerge.
Our transition will drive new jobs and business opportunities. There will be new opportunities for low-emissions business and employment. New jobs and industries are already emerging in areas such as the circular economy and bioeconomy and the development of renewable energy technologies. For example, support the development of new clean energy technologies and work with businesses to commercialise their innovations and create high-paying local jobs.
Some businesses, including small- and medium-sized businesses, communities and workers will need support to seize new opportunities to develop a more productive, higher wage and inclusive economy. Many Māori businesses are already using cultural values to guide investment in low-emissions industries and to improve environmental aspects of existing businesses, which will help those businesses to transition.
Industry leaders and businesses are motivated to reduce emissions, but some need information, tools and resources to support their transition. The Government will look at ways to:
The Government plans to help New Zealanders seize the opportunities of the transition by:
The early learning and schooling system is being strengthened to equip children and young people to be part of an equitable transition and positively contribute to our transition to a low-emissions society regardless of their life and career journeys.
The Reform of Vocational Education [Tertiary Education Commission website] will provide education and skills relevant to work today and in the future, including by establishing:
Alongside these initiatives, the Government is committed to ensuring that tertiary education is accessible, including for those who would like to retrain so they can pursue new careers in emerging industries. The Government has already introduced fees free tertiary education for students or trainees in their first years of study.
As the transition progresses, the Government will continue to monitor trends in the demand for education and remove barriers to participation in lifelong learning. Options include introducing incentives to support specific types of skills, such as the recent Apprenticeship Boost initiative and the Targeted Training and Apprenticeship fund initiative. These initiatives were introduced to support apprentices to keep earning and training towards their qualifications as the economy recovers from the impacts of the COVID-19 pandemic.
This plan sets out a range of initiatives that will boost transition-aligned growth in the economy, including:
The plan sets out a range of tools, advice and access to funding and investment to help businesses transition. Key initiatives include:
The transition will bring change across industries, jobs, land use and communities. Changes will play out in different ways for different regions, industries and groups in society, creating both challenges and opportunities.
Proactively preparing for change and developing plans will help affected groups identify and act on the opportunities that the transition will bring.
For that reason, the Commission recommended that the Government develop an equitable transition strategy to enable an inclusive transition that maximises opportunities and minimises disruption and inequities.
The Government is also committed to a range of existing initiatives to support regions and industries to manage the transition, including the Just Transition Partnership Programme.
To enable a fair, equitable and inclusive transition, the Government proposes to:
The strategy will develop tangible initiatives to address challenges and leverage opportunities that are targeted toward those groups in most need of support, drawing on a diverse range of perspectives and experiences. Initiatives will build on and align with the actions already set out in this plan.
The proposed objectives, participation framework and timeframes for the equitable transition strategy are set out in the following box.
Drawing on the objectives identified by the Commission and feedback from public consultation, the Government proposes that the equitable transition strategy focuses on six initial objectives.
Across these objectives, the actions and policies that are developed will be tailored to the different challenges and opportunities that exist for different groups. This will be achieved through meaningful engagement across a broad range of interests, including unions, workers, business, women, education providers, regional and rural communities, local government, disabled people, Māori, Pasifika, and representatives for groups such as low-income and beneficiary households.
The strategy will build on lessons learned through Just Transition Partnerships and, where appropriate, will draw on existing government partnerships, including, for example, the Future of Work Tripartite Forum [Ministry of Business, Innovation and Employment website] (see case study).
The robust development of the equitable transition strategy will take time. To deliver tangible actions to address urgent challenges, this process will rapidly identify:
The Future of Work Tripartite Forum (the Forum) is a partnership between the Government, BusinessNZ and the New Zealand Council of Trade Unions that supports businesses and workers to meet the challenges and opportunities presented in a rapidly changing world of work. The Forum is working to address the challenges and opportunities associated with a transition to a low-emissions economy and has a dedicated workstream on just transitions. The Government intends to seek the Forum’s input across relevant parts of the future climate change work programme, including the equitable transition strategy (action 3.2.1).
The equitable transition strategy will complement a range of existing initiatives to support regions and industries to plan for – and successfully manage – the transition.
The Just Transition Partnerships programme supports regional communities to understand, plan and successfully manage their transitions. The process empowers communities to lead transition planning so that all parts of the community are included in shaping their future, any proposals leverage the community’s strengths, knowledge and capabilities, and actions are tailored to the community’s specific needs and aspirations.
Just Transition Partnerships enable the Government to work in direct partnership with a region to:
The Government will:
The Government is committed to ensuring the transition leaves no community, no family and no person behind. This means supporting low-income whānau, households and other vulnerable groups who may face transition impacts and require access to resources and technologies to help them reduce emissions.
In many cases, reducing emissions can also help reduce the cost of living. For example, better access to public transport or safe walkways can help reduce fuel costs and reduce the cost of living. Using clean energy produced in Aotearoa and reducing our use of fossil fuel will also lower our exposure to volatile global markets.
The Government will also support businesses, including small businesses, to reduce emissions and leverage new opportunities presented by the transition, which will help retain existing jobs. However, some workers will need to transition toward work in lower-emissions industries. At-risk or displaced workers will need employment support, including retraining and skill-enhancement opportunities, and access to income assistance to support them through the transition.
The Government recognises the need for a resilient welfare system that lessens the impacts of Aotearoa New Zealand’s transition to a low-emissions economy. The Government’s vision is of a welfare system that ensures people have an adequate income and standard of living, are treated – and can live – with dignity and are able to participate meaningfully in their communities. The Government has already made significant progress on this vision. Workers and households will be supported by existing welfare and employment support systems and changes that have already been implemented, including:
To better protect workers, whānau and households and the economy, the Government, alongside BusinessNZ and the New Zealand Council of Trade Unions, is consulting on:
Workers would have the financial security to find a job that matches their skills, needs and aspirations. Businesses would be able to better match workers to jobs. The impact of a large employer closing or resizing in a small town or region would be cushioned by this policy.
If a decision is made to introduce the proposed scheme, the Government would introduce legislation in 2022 and the scheme could start operating in 2023. Introducing an income insurance scheme would be an important step change that lets us manage the challenges and harness the opportunities that lie ahead for New Zealand.
To ensure that the welfare system continues to adequately support workers and households, the Government will:
The Government is committed to a strengthened, proactive employment support service, tailored to respond to different needs and priorities. This will enable New Zealanders to prepare for, find and retain suitable employment.
Current employment supports include:
Work is also underway to:
Alongside actions 3.3.1 to 3.3.3, this plan identifies a range of initiatives to support an affordable and inclusive transition for individuals, whānau and households.
Transport, energy and waste are key areas where targeted policies will help mitigate the impacts of the transition. These policies include:
This plan focuses on actions to reduce emissions over the next three to five years, while also setting the foundation for transitioning to a high-wage, low-emissions economy over the next 30 years. To ensure this transition is fair, equitable and inclusive, we will need to be agile, monitor and assess the impact of the transition, build the evidence base for further action and respond where needed with further measures to support an equitable transition.
To build the evidence base and tools to monitor and assess impacts of the transition, the Government will:
The Government will also look to:
Our society’s transition to a low-emissions and climate-resilient future requires a combination of system-wide change and actions from individuals, households and communities. An equitable transition requires all New Zealanders to be empowered to make low-emissions choices and have a voice in the development of climate change policies and programmes.
This first emissions reduction plan has been informed by public consultation and engagement with the Government and the Commission. Ongoing public participation is needed to support the policies and programmes the Government will put in place to transition to a climate-resilient and low-emissions future.
Making our transition needs an active and engaged public who is willing to not only advocate for, but also take up, actions consistent with a zero-emissions society.
The Government will support New Zealanders to understand, propose and adopt low-emissions solutions and is investigating ways to:
New Zealanders largely understand and support measures to address climate change, but many do not know how to make a meaningful contribution. The Government also recognises its role in combatting misinformation and disinformation that can undermine climate messages, actions and the reality of climate change and its impacts on our society.
To inform low-emissions choices, the Government is investigating the benefits of establishing a climate information centre to provide a trusted source of information to promote and socialise the wise-scale behaviour changes needed.
Lasting solutions are built with the involvement of all sections of society.
The Government is investigating ways to increase public participation in climate policy and prioritising actions.
The low-emissions behaviour we need to adopt will be as varied as our people and places.
The Government is looking to empower communities and Māori to champion local actions specific to their situation and to share ideas that work to encourage adoption of low-emissions behaviours. For example, local ‘ride and drive’ events are an effective way to reduce misconceptions and concerns about electric bikes and vehicles.
Chapter 3 Equitable transition
May 2022
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