Nationally Determined Contribution

Every country needs to set a Nationally Determined Contribution (NDC) under the Paris Agreement.

The main purpose of an NDC is to outline the contribution countries will take towards delivering on the goals of the Paris Agreement.

The purpose of the Paris Agreement is to:

• keep the global average temperature well below 2° C above pre-industrial levels, while pursuing efforts to limit the temperature increase to 1.5° C
• strengthen the ability of countries to deal with the impacts of climate change
• make sure that financial flows support the development of low-carbon and climate-resilient economies.

The Agreement states that each country's successive NDC will represent a progression beyond the country's then current NDC and reflect its highest possible ambition, reflecting its common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.

• Submission under the Paris Agreement of New Zealand's first NDC

New Zealand’s first Nationally Determined Contribution (NDC1) was updated on 31 October 2021. The new NDC sets a headline target of a 50 per cent reduction of net emissions below our gross 2005 level by 2030. Our NDC covers the period 2021-2030.

The NDC1 target is economy-wide, covering all sectors and all greenhouse gases. In addition to containing detail on the scope and coverage of NZ’s 2030 target, the NDC1 is accompanied by information to facilitate clarity, transparency, and understanding that is requested from all countries under the Paris Agreement. 

The NDC ‘point-year target’ approach

The headline number for New Zealand’s updated NDC1 is expressed as a ‘point-year target’ for 2030. This approach matches most other countries and assists with transparency and comparability. 

The emissions budget

The emissions budget is the total net emissions New Zealand will be responsible for between 2021 and 2030.  

Managing the NDC through an emissions budget means that net emissions will be measured across the whole target period (2021-2030), not only by isolating emissions in a single year (2030).  This will: 

• provide greater certainty throughout the period 
• be better for the environment, since the climate is impacted by all emissions not just those in the target year. 

Multi-year emissions budget 

New Zealand will manage our NDC1 using a multi-year emissions budget.

The provisional budget for our updated NDC is 571 MT CO2-e. This represents the cumulative net emissions between 2021 and 2030, if net emissions decline in a straight line from 2020 levels to the point-year target in 2030.

The NDC ‘emissions budget’ approach 

The new NDC equates to a 41 per cent net reduction on 2005 gross emissions by 2030. This approach is more comparable to our original NDC. In this approach, the net emissions level used to calculate the budget start from New Zealand’s 2020 emissions reduction target.   

With the point-year approach, the budget starts from New Zealand’s actual 2020 net emissions.  

Although the two approaches are calculated from different 2020 starting points and different 2030 net emissions targets, they imply the same total amount of total emissions over the 2021-2030 budget period. The two approaches are therefore different ways of expressing the same level of ambition. Both approaches have the same provisional emissions budget for the period 2021-2030.  

NDC data

• Data underpinning NDC

This spreadsheet relates to data that was used to calculate and update New Zealand’s NDC.

New Zealand submitted our original NDC to the UNFCCC when we ratified the Paris Agreement on 4 October 2016.  

New Zealand’s previous NDC target was to reduce net greenhouse gas emissions by 30 per cent below gross 2005 levels by 2030. This equates to 39 per cent below 2005 levels using the same point-year approach as the updated NDC1. 

In April 2020, the Minister of Climate Change asked He Pou a Rangi - New Zealand’s Climate Change Commission to provide advice on the compatibility of the NDC with contributing to the global effort under the Paris Agreement to limit the global average temperature increase to 1.5° C above preindustrial levels. 

The Commission’s final advice said: 

• New Zealand’s previous NDC target was incompatible with global efforts to limit global warming to 1.5°C above pre-industrial levels.  
• For our NDC1 target to be compatible with the 1.5°C goal, net emissions would need to be reduced by much more than 36% below gross 2005 levels by 2030. The Commission derived the 36% number by assuming that New Zealand’s emissions should reduce at least at the same rate as global emissions of those gases in pathways consistent with the global pathway to 1.5°C. The 36% reduction number is based on a ‘budget approach’. 

• There are multiple ways of determining an equitable NDC contribution. Choices about an appropriate NDC1 target required the Government to make decisions about what was feasible for New Zealand to achieve.  
• Offshore mitigation would be required to meet the NDC due to the gap between what could feasibly be achieved domestically and what we must do to meet the previous or an enhanced NDC1.  
• It would be critically important for Government to hold itself to high standards of environmental integrity. 

Ināia tonu nei: a low emissions future for Aotearoa is the Climate Change Commission’s advice to the Government on its first domestic emissions budgets, the Nationally Determined Contribution and biogenic methane. 

Offshore mitigation

In this context, offshore mitigation means emissions reductions and removals, or allowances from emissions trading schemes that:

1. originate from outside New Zealand
2. are expressed as a quantity of carbon dioxide equivalent
3. are robustly accounted for to ensure that, among other things, double counting is avoided
4. either:
   1. represent an actual additional, measurable, and verifiable reduction or removal of an amount of carbon dioxide equivalent
   2. are an emissions trading scheme allowance that triggers the reduction of carbon dioxide equivalent

Environmental integrity

Environmental integrity means that the offshore mitigation represents additional, measurable, and verifiable reductions or removals of greenhouse gas emissions. 

Government's approach to environmental integrity

The Government has committed to ensuring all efforts counted towards our NDCs – both domestic and offshore, have environmental integrity. 

The Government has released a framework that sets out how New Zealand will approach international carbon market cooperation. This includes a commitment for environmental integrity in all aspects of this cooperation.  

NDCs are different to our domestic emissions budgets under the amended Climate Change Response Act 2002 (the CCRA).  

The emissions budgets under the CCRA drive our domestic transition to a low-emissions economy. They set five-year total limits on domestic emissions to help ensure we are on track to meet our longer term domestic 2050 target. These budgets will be met through reducing emissions in New Zealand. Offshore mitigation should only be used to meet our domestic emissions budgets in exceptional circumstances.  

Our NDCs under the Paris Agreement drive our contribution to the global effort. NDCs are international targets that can be met through a combination of domestic action and additional international cooperation.

New Zealand’s first priority will be domestic climate action to help meet New Zealand’s climate change targets, including the NDC. This includes:

• reductions in New Zealand’s domestic emissions, including all sectors and all GHGs, as reported under Paris Agreement following methodologies from the 2006 IPCC guidelines
• removal of carbon dioxide by forests, using an accounting approach based on a long-term average carbon stock for plantation forests.

In addition to taking domestic action, New Zealand plans to use offshore mitigation with environmental integrity towards meeting our NDC. By cooperating with other countries to reduce emissions offshore, we can increase our contribution to global emissions reductions while managing the impacts on the New Zealand economy. Currently

• New Zealand is exploring a range of potential options for sourcing offshore mitigation with environmental integrity and prioritising partnering with countries in the Asia-Pacific region in ways that promote sustainable development outcomes and resilience.
• New Zealand is also exploring linking the New Zealand ETS to international markets with environmental integrity.

There are three types of emission data. 

• Gross emissions (UNFCCC reporting). Emissions from all sectors of the New Zealand economy, excluding forestry and land-use emissions/removals. 
• Net emissions (UNFCCC reporting). Emissions from all sectors of the New Zealand economy, including all forestry and land-use emissions/removals. These are used for reporting in New Zealand’s national inventory report. 
• Target accounting net emissions. This is what we use to measure progress towards our emission targets.  

Target accounting net emissions 

Target accounting net emissions include all of our gross emissions, but have a special set of rules applied to emissions and removals from land-use and forestry. It uses a subset of emissions and removals used in UNFCCC reporting: it excludes removals by forests that were established prior to 1990, unless such removals are the result of direct changes in forest management, and it currently does not include emissions and removals that occur on non-forest land. 

These rules are designed to provide an incentive for behaviour change to reduce emissions (e.g. reduced deforestation and increased afforestation). The rules largely factor out emissions and removals that are the result of historical actions that are difficult to influence or would have occurred anyway. These actions include the historical harvesting and subsequent regrowth of natural forests, and increases in the harvesting of production forests that were established since the 1920s. Target accounting removes these inter-decadal variations in emissions and removals and focuses on actions that reduce emissions over the long term. That means that only activities (e.g. afforestation and deforestation) since a base year (1990 in our case) are accounted for against our climate change targets.  

Kyoto Protocol approach 

The NDC uses a modified version of the Kyoto Protocol approach for accounting of emissions and removals from land-use and forestry. This approach is referred to as averaging and it includes removals from afforestation up until the long-term average carbon stock is reached. Averaging limits removals compared to the Kyoto Protocol approach, but also excludes emissions from harvest as long as the forest is replanted.  

This approach provides a better incentive for afforestation by removing peaks and troughs associated with growth and harvest cycles in forests. The Paris Agreement target continues to account for deforestation and largely excludes emissions from pre-1990 forests. 

Paris Agreement Rulebook 

The Paris Agreement Rulebook for land-use and forestry is largely nationally determined (as allowed by the Agreement), but what countries do needs to be compatible with principles of transparency, environmental integrity and avoiding double counting. New Zealand’s ruleset is similar to that of the European Union’s approach and is based on existing guidance for the Kyoto Protocol and for reporting.  

New Zealand’s second NDC is due in 2025 to cover the period starting from 2031. No decision has been taken yet with regard to New Zealand’s second NDC (post-2030).