New Treasury report estimates suggest meeting New Zealand’s 2030 Paris Agreement target could cost between $4.4 and $5 billion through offshore mitigation, reigniting discussion about how the country approaches its international climate commitments.
The figures highlight the scale of New Zealand’s emissions reduction challenge and raise important questions about the most cost-effective way to secure the carbon credits needed to meet its obligations.
As reported by Carbon News, John OBrien, Managing Director of Carbon Market Solutions, suggested the Treasury estimate may be higher than current market realities.
Based on an estimated requirement of 80 million Article 6 credits and an assumed price of around US$20 (NZ$35) per credit, he noted that the total cost could be closer to $2.8 billion.
He also emphasised that New Zealand could potentially reduce costs by investing directly in the development of Article 6 projects, rather than simply purchasing credits on the market.
Noting that this approach was not considered in the Treasury analysis, O’Brien drew comparisons with Japan’s approach and suggested that strategic investment in projects involving New Zealand businesses could help secure better prices while generating wider economic benefits.
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