Prime Minister Christopher Luxon sees economic argument for NZ staying in Paris Agreement, despite coalition partners' concerns

Prime Minister Christopher Luxon says there’s an economic argument for New Zealand to stay in the Paris Agreement despite pushback from coalition partners ACT and New Zealand First.

NZ First wants to pull out of the Paris Agreement with leader Winston Peters saying it's “senselessly hamstringing our economy,” while ACT leader David Seymour has previously said: "Paris needs to change, or New Zealand needs to leave."

Luxon, who is National Party leader, does not support ACT and NZ First’s attitudes towards the agreement, and made it clear while speaking to RNZ that staying in the Paris Agreement is a bottom line in any coalition negotiations after the election.

Asked whether Luxon making the Paris Agreement a bottom line was a wise or unwise position, Peters told RNZ; “the only comment you can make about that is that it’s a demonstration that experience does matter in politics.”

'Kick New Zealand products off shelves'

Speaking to reporters on Tuesday morning, Luxon said there was an economic argument to stay in the Paris climate agreement.

“There’s no doubt about it, our competitor countries and the multinational companies that buy from us would just simply kick New Zealand products off shelves.”

However, Luxon reiterated the country would not be sending money offshore to meet NZ’s targets under the Paris Agreement. Instead, that money would be invested in NZ.

This isn't a new stance from Luxon. In June, he said: "I want to be clear, we're not here to chase emissions reduction as the end goal. Our goal is growth in this economy and growth in this country." 

Under the Paris Agreement, every country sets out its own Nationally Determined Contributions (NDC) - this is to show the contributions countries will make towards delivering on the 2015 Paris Agreement climate goals. The obligations are to limit global warming to “well below 2 °C” and attempt to keep it to 1.5 °C.

Countries can transfer carbon credits earned from reducing greenhouse gas emissions to help other countries meet their climate targets.

A Treasury paper called New Zealand’s Nationally Determined Contributions - Potential Fiscal Costs Associated with Offshore Mitigation, said when it came to the country's 2030 goal, "analysis shows that there could be significant fiscal costs associated with purchases of offshore mitigation."

"Under the scenarios examined, possible costs are modelled at between $4.4 billion to $5.0 billion."

More money may also be needed for NZ to meet its 2035 goals - with Treasury estimating offshore mitigation costs between $200 million and $1.6 billion depending on the scenarios.

“We’re going to do the best we can … We’ll give it a good go,” Luxon told reporters on Tuesday.

But he also highlighted that many of the top 25 economies in the world that are major drivers of economic growth and therefore emissions, were off track for NDC in 2030.

“The top 25 countries are going to have to ask some questions about their delivery of their Paris target as well. So I think there’ll be a bigger conversation coming in the future.”