NEW ZEALAND Law and Practice Contributed by: Josh Williams, Anderson Lloyd
3. Responses to International Developments 3.1 Voluntary Carbon Markets Voluntary Carbon Markets
ensure consistency of policy. Judicial review is the primary mechanism through which climate-related decisions made by the government can be challenged and tested. In the latter half of 2024, the Better New Zealand Trust issued proceedings against the Minister for Transport, questioning whether the government’s decision to change the “Clean Car Standard” (which aims to reduce CO2 emissions of imported vehicles) was consistent with New Zealand’s emissions reduc - tion plan (which was required by the CCRA) and increasing the supply of zero and low emission vehi - cles. The courts are yet to release a decision on this case. It is worth noting that judicial review is inherently lim - ited. New Zealand’s constitutional structure grants parliamentary “supremacy”, which limits the courts’ ability to make enforceable orders against the gov - ernment. This limits the extent to which litigation can effectively influence government decision-making on climate-related issues. Climate Litigation Between Private Individuals There are currently no existing climate-specific cours - es of action in New Zealand. Litigants are forced to rely on other courses of action, such as a tortious claim of negligence or a claim for breach of environ - mental consents or breach of contract. However, this may change with Smith v Fonterra Co - Operative Group Limited & Others . In Smith v Fonterra , the claimant brought a claim against seven high-emit - ting New Zealand companies in the agriculture and energy sector, claiming that the defendant’s actions (which allegedly resulted in climate damage) consti - tuted public nuisance, negligence and a novel climate change damage tort: a breach of duty to “cease con - tributing to climate change”. These claims were struck out by the Court of Appeal on the basis that allowing them would introduce an “ad hoc way of addressing climate change”. However, the Supreme Court sub - sequently granted leave to appeal, indicating its will - ingness to engage with the existence of this type of action against private companies. This development has the potential to establish a new climate-specific tortious action in New Zealand. This appeal has not yet proceeded to a hearing, and it is not expected to be decided for several years.
Voluntary carbon offsetting is not specifically regu - lated in New Zealand, although there is active policy development in this area and the government has issued guidance on what should be adhered to for a voluntary carbon-offsetting claim to be credible, as well as examples of how voluntary carbon offsetting by organisations and individuals can be applied in the context of New Zealand. The six principles that must be met for any claims of voluntary climate change mitigation require that the
mitigation be: • transparent; • real, measurable, and verified; • additional; • not double used; • inclusive of addressing any leakage; and • permanent.
Surrendering units as part of a legal requirement under the ETS is not voluntary climate change mitigation and cannot be claimed as such. New Zealand Emissions Trading Scheme The New Zealand Emissions Trading Scheme (ETS) is the primary mechanism used to price greenhouse gas emissions and incentivise emissions reductions and removals. It operates as a “cap and trade” system based on the allocation, auctioning and surrender of New Zealand Units (NZUs). Recent reforms have reshaped the structure and oper - ation of the ETS, reflecting a broader recalibration of climate policy settings. Key recent changes include: • Greater domestic focus – legislative amendments remove the requirement for ETS unit settings (including auction volumes and price controls) to align with New Zealand’s international commit - ments under the Paris Agreement. The ETS is now
72 CHAMBERS.COM
Powered by FlippingBook