Climate Change Commission says NZ’s rate of emissions reduction needs to more than double and government choices in next few years ‘will be critical to getting the country back on track’

Climate disruption and economic impacts in New Zealand are growing, a report from the Climate Change Commission says, and greater and more durable emissions reductions are needed to manage these risks.

“Delaying action increases disruption and costs for households and the economy, and narrows the country’s options,” the commission said in its 2026 monitoring report looking at emissions reduction released on Wednesday. This report tracks how emissions reductions are going and the Government's progress towards meeting NZ's second and third emissions budgets, and the 2050 budget.

Emissions budgets are the total amount of emissions that's allowed to be released during the budget's period, according to the Ministry for Cities, Environment, Regions and Transport (MCERT).

"Emissions budgets will act as stepping stones, or interim targets, to reaching our 2050 emissions reduction targets," MCERT said. The country's 2050 emissions reduction targets are net zero greenhouse gas emissions (except biogenic methane) and a 14% to 24% reduction in biogenic methane.

The report found that risks to the country’s climate goals for the next decade have increased, and the second and third emissions budgets are at high risk - with the 2030 biogenic methane target unlikely to be met. Alongside this, the report said the pace of emissions reductions needed to more than double over the next few years.

The report highlights current plans and policies are “insufficient to meet the third emissions budget (2031-2035) or the 2050 target, and the window for action is closing.”

“The gap in the emissions reduction plan for the third budget has not been significantly addressed since our last report and the risks to planned reductions have increased."

“If additional action does not occur in the next one to two years, it will no longer be feasible to meet the 2030 biogenic methane target or the third emissions budget.”

The report said policy actions that could reduce emissions included things like improved energy regulatory measures, extending the road user charges exemption for electric heavy vehicles, passing legislation to use time-of-use charging for transport systems and the Gas Transition Loan Guarantee Scheme (this was announced after the commission's assessment period).

The report also pointed out actions that could increase emissions. This included things like excluding agriculture from emissions pricing, increasing the mandatory climate reporting threshold, changes to the Clean Vehicle Standard, and committing to a liquefied natural gas (LNG) import facility.

The Climate Change Commission is an independent Crown entity that provides advice to the Government on mitigating and adapting to the effects of climate change. It also monitors and reviews the Government's progress towards its emissions reduction and adaptation goals.

Climate Change Minister says NZ 'on track' to meet first two emissions budgets

But Climate Change Minister Simon Watts has a different perspective, saying the latest emissions projections suggested NZ was "on track" to meet its first two emissions budgets.

The projections Watts is referring to were published in October 2025 and updated in January 2026 to correct a data omission. The next update will be in late 2026.

The Government welcomed the report, Watts said, and would "carefully consider its findings ahead of the Government's formal response in October 2026."

Opposition parties were critical, with Labour climate change spokesperson Deborah Russell saying: "The Government has failed to take the serious action we need to reduce emissions, move the economy away from fossil fuels and ensure lower costs for households and businesses."

Green Party co-leader Chlöe Swarbrick said the Government had "shredded climate action."

‘Acting sooner will reduce costs overall’

Climate Change Commission chief executive Jo Hendy described the report as "a clear warning sign.”

“Emissions are gradually falling but progress stalled in 2024 and current policy settings are not delivering at the pace needed. Government choices in the next 12 to 24 months will be critical to getting the country back on track.”

New Zealanders are already experiencing the impacts of a changing climate, the commission said.

"Choices made now will affect how quickly the country cuts its own emissions, and how well households, businesses and communities are positioned to manage future shocks."

The report also pointed out that acting earlier to reduce emissions could strengthen NZ’s resilience, reduce exposure to shocks and lower costs for households, businesses and the country.

“Recent high oil prices forced many households to change their spending, including on necessities. Greater uptake of low-emissions technologies would reduce exposure to these shocks and help manage cost-of-living pressures.”

“Some actions will require upfront investment, but acting sooner will reduce costs overall and make the transition to a low-emissions economy smoother,” the commission said.

The signals Government gives

Some people were missing out on savings and reducing their exposure to future energy risks because upfront costs and barriers were preventing households and businesses from switching away from fossil fuels, the report said.

“The Government has low-cost options to address these barriers. These include targeted funding and financing mechanisms, stable investment signals for markets and consumers, and better information to support household and business decisions.”

“Clear and stable policy settings help households, businesses and investors make decisions with confidence. The goal should be to avoid getting locked into expensive long-run options,” Hendy said.

“Infrastructure and other long-lived investments that support low-emissions choices are generally cheaper to get right early than to retrofit later.”

Hendy said while the Government had taken useful steps to reduce upfront cost barriers, “the question now is how to build on them quickly enough to support the scale of change needed”.

“It’s not just about what the Government spends money on, but also the signals it gives."

Government 'committed' to NZ's climate targets

Watts said: "Our Government is committed to New Zealand's climate targets, and adapting to the changing climate."

He said the report covered government policy and action in the year to April, which meant some of the impacts of policy changes and announcements since then were not included in the analysis of the report.

Examples of this, he said, were things like the AgriZeroNZ Early Adoption Accelerator and the Government’s Gas Transition Loan Guarantee Scheme.

"The impact of these policy changes will be picked up as part of 2026 projections and will help inform the Government’s response to the report, which is due by October 2026," Watts said.

"We’re currently focused on implementing the policies in our second emissions reduction plan, with almost all actions already underway. 

"The Government included an adaptative management approach in the second emissions reduction plan. This is an annual process so we can regularly assess progress and risks to ensure we stay on track to meet our second emissions budget."

'The Government has failed to take serious action'

But Labour's Deborah Russell said the National Government's actions "has undone work to reduce emissions in NZ and move to a decarbonised economy", pointing to the scrapping of the clean car discount, reversing the ban on new oil and gas exploration permits, and ending the Government Investment in Decarbonising Industry (GIDI) Fund.

"Reducing emissions now will not only enable us to meet our 2050 net zero goal, it makes good economic sense."

"Shifting as many households as possible onto solar would help to move our electricity grid away from reliance on high priced fossil fuels to generate electricity.  Actions like this would reduce emissions now, and save people money," Russell said.

Green Party's Chlöe Swarbrick said: "This isn't about numbers on a page. This is about people's lives and livelihoods."

Swarbrick told reporters "with this report on the table today, the other parties that are not willing to take New Zealanders and our future seriously just need to get out of the Goddamn way".

Not a 'nice to have'

The Science Media Centre has collected a range of views on the report from academic experts.

Victoria University of Wellington Professor James Renwick said: "The current coalition government claims to be on target for our climate action, but their policy moves over the past two-three years have on balance gone in the wrong direction."

"The clear messages from the commission lay bare the gap between rhetoric and reality. Policy changes can still be made to improve the situation, but as the Commission says, time is running out," Renwick said.

"Acting on climate change through greenhouse gas emissions reductions is not a 'nice to have', it is fundamental to maintaining a liveable future for our children and grandchildren. Let’s see our government take it seriously."

AUT professor Sebastian Leuzinger said the report showed some encouraging details but also stressed the urgency to do more to achieve the targets.

Leuzinger said he believed it was possible to achieve the country's "ambitious" goals "through smart solutions, and hopefully not just a shrinking economy, which would not serve anyone in the end, including our climate goals".