Towards a Sustainable New Zealand: Next Steps

Date: February 2007
Reference number:
CAB (07) 15

Office of the Minister for the Environment

The Chair
Cabinet

Proposal

1. This paper proposes a set of sustainability initiatives to support current and planned sustainability related activity, to better engage with households and businesses, with government leading by example.

Executive Summary

2. This paper updates ministers on a set of proposals to raise sustainability issues to a higher level of household awareness, improved business partnership and government leading by example. Proposals under development include:

  • Sustainable households
  • Business partnerships for sustainability
  • Towards a carbon neutral public service
  • Enhanced sustainable procurement
  • Waste minimisation and management.

3. These proposals are being refined and fully coordinated in the budget process to ensure they are cohesive, credible, affordable and deliverable. Local government will remain a key partner in the design and delivery of many of the initiatives set out in this paper.

4. These proposals have been prepared in light of, and support, a raft of existing sustainability initiatives and strategies currently in place or under consultation. The proposals in this paper are part of the much wider set of sustainability related work. The wider work streams include climate change, sustainable land management, Sustainable Water Programme of Action, New Zealand Energy Strategy, New Zealand Energy Efficiency and Conservation Strategy, New Zealand Waste Strategy, clean air programme, New Zealand Biodiversity Strategy, and a range of transport related initiatives. Local government and industry are key partners.

5. New governance arrangements will be put in place to maintain coordination and cohesion between these new proposals, existing initiatives and the strategies/plans that are currently under consultation (e.g. New Zealand Energy Strategy, New Zealand Energy Efficiency and Conservation Strategy and Sustainable Water Programme of Action) and to monitor progress.

Background

6. The package of initiatives under development is as follows:

Sustainable Households

7. This initiative is intended to dramatically lift the effort to engage households in sustainability (including energy, transport, waste and water). The focus is on concrete actions that households can take to be genuinely more sustainable. It will raise awareness and connect people to a raft of existing programmes that support sustainability (including technical advice, how-to-guidance and financial support). The focus is on information and changes that benefit the wallet, personal well-being, the community, and the planet.

8. Most of the current effort is not highly visible and not always well linked to what people can actually do. There are several energy efficiency budget bids that complement this programme. There are many existing initiatives at national and local level that will be linked. Local government has been particularly active in community based sustainability campaigns.

Business Partnerships for Sustainability

9. This initiative is intended to:

  • better promote the ‘where-to-go’ for the ‘how-to-do’ of sustainable business practices including:
    a. supporting established advisory services (e.g. Sustainable Business Network, Better by Design, regional programmes)
    b. offering further assistance to with sector strategies industry groups (e.g. tourism, food and beverage)
  • government policy and decisions consistent with a carbon priced future.

10. 78% of business leaders [New Zealand Business Council for Sustainable Development panel survey, 2007] believe that sustainability will make New Zealand more competitive. Many business have taken steps, others want to do the right thing but do not know where to start. There are a range of consultancies providing advice to businesses. More can be done to steer businesses in the right direction especially through business peer support. Government can offer to assist industry groups with becoming more sustainable. For example, the Tourism Industry Association membership has made sustainability their top priority and has asked for government assistance to take this forward.

11. A consistent message from business is a desire to see government act in a way that is consistent with a carbon priced future, so that businesses are not caught on the back foot, and are able to exploit the economic opportunities that arise from sustainability. For example, the fact that the New Zealand Energy Strategy calls for a high level of renewable electricity generation is a signal consistent with a carbon priced future and it will make it easier for businesses to attain, and then market, being carbon neutral.

12. The RS&T Environmental Research Roadmap provides a direction for a greater focus on sustainability. The Pastoral GreenHouse Gas Research Consortium is an example of a private-public partnership that is now up and running. If successful it will help to reduce the 50% of New Zealand’s carbon emissions that is difficult to mitigate at present. If solutions are created there will be intellectual property to export to the world. Last month, Scion and AgResearch formed a research programme with US-based Diversa Corporation which could ultimately see New Zealand’s entire vehicle fleet running on New Zealand-grown and manufactured biofuels. New Zealand’s ingenuity, image, research strengths and manageability as a test bed provide a basis for more such partnerships.

13. Enhanced government sustainable procurement (discussed below) will help drive a shift to the production of sustainable goods and services though the supply chain.

Moving the Public Sector Towards Carbon Neutrality

14. This initiative aims to reduce carbon emissions in all government departments. There is potential to readily make 30% reductions in electricity and fuel use by investing in efficiency measures.

15. The building occupied by MfE uses only 40% of the energy consumed by many comparable public sector agencies. In dollar terms this translates to approximately $140,000 in electricity savings a year over a similar building in Wellington.

16. Some Govt3 agencies have already been successful in procuring smaller more fuel efficient, lower emissions vehicles. Examples include the Accident Compensation Corporation (95 percent of whose fleet are under 2000cc), the Inland Revenue Department (98 percent of their fleet under 2000cc) and Ministry of Social Development (94 percent of their fleet is under 2000cc and 89 percent of their fleet is less than 3 years old).

17. Some unavoidable emissions, such as air travel can be reduced by greater use of video conferencing for example. New Zealand Post has reduced air travel by 30% without compromising effectiveness.

18. Achieving 100% carbon reduction in government departments is technically possible but not operationally practical mainly because of air travel and vehicle use. Application of renewable energy such as biofuels and greater rates of renewable electricity generation (through the national grid or on-site) will over time reduce emissions closer to zero.

19. EECA’s energy efficient loans scheme shows that for every dollar invested there is a return of $2.60.

20. For the 5 departments for which we have good existing baseline information, trees will be planted on New Zealand Crown land in winter 2008 to offset the residual emissions so that these departments become fully carbon neutral by 2012 when tree growth will exceed emissions. Modelling shows that approximately 6 square kilometres of forest would be required to offset the 5 departments for 20 years.

21. This initiative also includes encouragement of all public service agencies to begin reducing emissions immediately (but not participate in offsetting). In stage 2, at a date to be determined, a larger set of government agencies could move to carbon neutrality once agency emissions have been profiled, mitigation underway, and desired reach into the wider state sector determined (e.g. speed of extension to NZDF, Crown entities, SOEs).

22. For the carbon offsets, planting in New Zealand offers good co-benefits for land management (topsoil, flood control) and to the extent that native planting occurs, increased biodiversity. We will not be subject to global market variations in the cost of offset schemes and be able to verify the effects of the programme. Offset management would occur in one place so that individual departments would not be required to manage their offset requirements.

23. Planting to offset residual emissions is likely to be Kyoto compliant. Officials are working on options for a mix of exotic and native plantings and pest control to increase carbon density for the offset portfolio. Officials are also preparing a report back on private access to Crown land for offsets.

Sustainable Procurement

24. This initiative is intended to accelerate the adoption of sustainable procurement by government agencies through clearer mandating, upskilling and the uptake of sustainable technologies. Increased verification of eco-labels, the production of sustainability guidelines and sustainable supply chains feature in this initiative.

25. The Govt3 programme has been voluntary and with different agencies focusing on different aspects. If, as proposed, there is a clearly mandated requirement for core government agencies to purchase to eco-labels, follow procurement guidelines for Govt3 and adopt best practice sustainability measures (e.g. GreenStar building rating of 5) this programme will flourish further.

26. In recognising that purchasing to eco-labels can sometimes have a higher cost, the requirement to purchase to eco-labels is always predicated on best value over the life of the product and fitness for purpose. A government lead in sustainable procurement will help New Zealand businesses profit from sustainable products and ensure a better position to market products and services to the private sector and export. A powerful aspect of this initiative includes driving a requirement that a supplier’s supply chain be brought up to sustainable practice. This will drive sustainability into small and medium size businesses in New Zealand.

27. There will be a few product gaps for which specifications have yet to be set and government procurement guidelines will be expanded. Verification of eco-labels will need to increase. An easy to use website will bring this programme together and also help business. A New Zealand ‘master brand’ is under consideration as a quick and easy way to validate eco-labels and claims of sustainable practice.

Waste Minimisation, Management and Recovery

28. This initiative is intended to lift the effort on waste minimisation by instituting a system of approved schemes for product stewardship and applying a waste levy to fund local waste minimisation projects, as proposed in the Waste Minimisation Bill.

29. There is an opportunity to ensure the Waste Minimisation Bill is more administratively workable by replacing a proposed Waste Minimisation Authority and set of Waste Control Authorities with an increased profile and capability for waste minimisation, management and recovery within MfE.

30. The waste levy would be used to seed fund local initiatives and improve the current variable nation-wide performance on waste minimisation, management and recovery. Government can use a portion of the levy to incentivise particular activities of nation-wide significance that require a consistent approach. Specific proposals will be presented shortly to Cabinet.

31. The pricing of waste will promote the expansion of the recovery industry.

Existing public and private sector initiatives

32. There is widespread movement to more sustainable practice in the public and private sector, especially in response to climate change. Many of these programmes are not highly visible but quietly part of a wider transformation. Some highlights, by no means exhaustive, include:

  • In the public sector, the new DOC head office is set to gain a 5 GreenStar rating for excellence in building efficiency. Corrections have implemented measures that save $300,000 per annum and cut emissions (per prisoner) by 37%. Treasury waste to landfill has been reduced from 80kg per staff per annum to 18kg. Government sponsored programmes have led to 25,000 homes being retrofitted with insulation. The SmartBuild website comes on line in February.
  • MED is currently consulting on the New Zealand Energy Strategy and the New Zealand Energy Efficiency and Conservation Strategy. MAF is currently consulting on Sustainable Land Management and Climate Change. MfE is consulting on the post-2012 Kyoto climate change response. Other established government led programmes include the Sustainable Water Programme of Action, New Zealand Waste Strategy, New Zealand Transport Strategy clean air programme and the New Zealand Biodiversity Strategy.
  • Several strategies such as the Urban Design Protocol, New Zealand Waste Strategy and Sustainable Water Programme of Action involve central government working closely with local government.
  • In the private sector, there is discussion on establishing a New Zealand based carbon exchange. Grove Mill Winery has become, and Urgent Couriers is in the process of becoming, carbon neutral to gain market advantage. The Warehouse has a sustainable supply chain management programme that requires suppliers to demonstrate sustainable practice. There are product stewardship schemes that have participating businesses in each industry group for tyres, appliances, paint, cell phones, computers, vehicle batteries, glass, metals, paper and plastic.
  • There are joint public-private examples such as the Clean Streams Accord with Fonterra and a New Zealand Packaging Accord with industry. Work is underway on a carbon neutral Rugby World Cup 2011.

Following Progress

33. The OECD will be issuing a report on New Zealand’s environmental performance in March/April 2007. The report contains 38 recommendations. The report is generally favourable but a few of the recommendations will be challenging. MfE is planning an Environment New Zealand 2007 report for Cabinet consideration [CAB Min (06) 40/2A] and release in October 2007 as a new baseline for monitoring high level outcomes.

34. Although it is still being developed, the Yale 2006 Pilot Environmental Performance Index ranks New Zealand at number 1. What it means to be sustainable is moving rapidly. We will need to make good progress if New Zealand is to stay at the top of environmental indices.

35. The Sustainable Development Programme of Action has been drawn to a close. The numerous work streams and the specific proposals discussed in this paper effectively replace the Sustainable Development Programme of Action.

36. DPMC plans to establish a chief executives governance group to ensure coordination and monitor progress with the five ‘kick start’ initiatives, existing activity, and activity under active consideration/consultation.

Consultation

37. The proposals in this paper have been discussed with the DPMC, MfE, MED, MAF, SSC, DOC, DBH, Treasury, EECA and selected business leaders.

Financial implications

38. The financial implications of the draft proposals are being refined. All of the proposals are scalable. These proposals are currently being integrated into the process for Budget 2007 and will undergo further scrutiny.

39. The proposals have been drafted on the basis that many upfront costs (estimated at 5-10%) of switching to more sustainable government procurement will be absorbed because:

a. there are usually operating savings (e.g. reduced energy costs)

b. we value sustainability and this is how we now do business.

40. The risk in this approach is that progress may be slower than expected. A contestable fund could be made available to speed the transition.

Human rights

41. There are no human rights implications of this paper.

Legislative implications

42. There are no immediate legislative implications of these proposals. The Waste Minimisation Bill forms the basis for the Waste Minimisation, Management and Recovery proposal set out in this paper. At some stage, business may ask for regulatory support, if for example, a New Zealand carbon exchange is formed.

Publicity

43. The proposals set out in this paper provide the next steps on sustainability as a government priority when the House resumes on 13 February 2007.

Recommendations

1. agree that a set of initiatives be refined to elevate sustainability to a higher level of public awareness, improved business partnerships and government leading by example, based on:

1.1 sustainable households;

1.2 business partnerships for sustainability;

1.3 towards a carbon neutral public service;

1.4 enhanced sustainable procurement;

1.5 waste minimisation and management;

2. note that these proposals are being fully coordinated in the budget process;

3. note that the package supports a range of sustainability related initiatives including energy, energy efficiency and conservation, climate change, land management, and existing government activity (e.g. Pastoral Greenhouse Gas Consortium);

4. note that there is a wide range of existing exemplary public and private activity to foster sustainability;

5. agree that an approach be made to local government to invite its participation in refinement and delivery of the proposals set out in the submission under CAB (07) 15;

6. note that the Organisation for Economic Cooperation and Development will be reporting on New Zealand’s environmental performance, and that the Ministry for the Environment is preparing Environment New Zealand 2007 for consideration by Cabinet and eventual public release;

7. note that the sustainability related work streams and proposals discussed in this paper effectively replace the Sustainable Development Programme of Action;

8. agree that a chief executives group be formed to coordinate government action and monitor progress on sustainability;

9. note that the Minister for the Environment indicates that the submission will be the subject of consultation with the government caucuses and other parties represented in Parliament.

 

Hon David Benson-Pope

Minister for the Environment

Cabinet decisions: CAB Min (07) 4/1A

On 12 February 2007, following reference from the Cabinet Business Committee, Cabinet:

1. agreed that a set of initiatives be refined to elevate sustainability to a higher level of public awareness, improved business partnerships and government leading by example, based on:

1.1 sustainable households;

1.2 business partnerships for sustainability;

1.3 towards a carbon neutral public service;

1.4 enhanced sustainable procurement;

1.5 waste minimisation and management;

2. noted that these proposals are being fully coordinated in the budget process;

3. noted that the package supports a range of sustainability related initiatives including energy, energy efficiency and conservation, climate change, land management, and existing government activity (e.g. Pastoral Greenhouse Gas Consortium);

4. noted that there is a wide range of existing exemplary public and private activity to foster sustainability;

5. agreed that an approach be made to local government to invite its participation in refinement and delivery of the proposals set out in the submission under CAB (07) 15;

6. noted that the OECD will be reporting on New Zealand environmental performance, and that Ministry for the Environment is preparing Environment New Zealand 2007 for consideration by Cabinet and eventual public release;

7. agreed that a chief executives group be formed to coordinate government action and monitor progress on sustainability;

8. invited the Minister for the Environment, in consultation with the Prime Minister’s Chief of Staff and the Department of Prime Minister and Cabinet, to provide advice to Cabinet on 12 February 2007 on the first group public service departments to be included in the programme;

9. noted that the Minister for the Environment indicates that the submission will be the subject of consultation with the government caucuses and other parties represented in Parliament.