Prime Minister Christopher Luxon says Act’s policy to water-down or withdraw from the Paris Climate agreement would be the ‘fastest, quickest’ way to ‘punish farmers’

The Act Party has called for New Zealand to weaken its emissions reduction goals in the Paris Climate Accord, or withdraw from the pact completely.

Leader David Seymour unveiled a climate policy on Tuesday that would effectively abandon efforts to prevent global warming, and risk export access in key markets.

Like most countries, New Zealand is not on track to meet its obligations under the 2015 Paris agreement, which aimed to limit warming to “well below 2 °C” and attempt to keep it to 1.5 °C.

That lower threshold was likely breached last year. The global average temperature in 2024 hit 1.6 °C, surpassing the previous record in 2023. Each of the past 10 years has ranked among the 10 warmest on record, according to European climate agency Copernicus.

Keeping warming below 1.5 °C was always going to be difficult, but the target was adopted because research showed vulnerable island nations faced far greater harm at the 2 °C limit preferred by major emitters.

These thresholds are something of a red herring. In economic terms it is more simple: the hotter the planet gets, the higher the adaptation costs become — and some countries will be better placed to bear these costs than others.

Richer nations may be tempted to pump out emissions as needed to build wealth, then use that money to protect their populations from the fallout.

That might mean higher stopbanks along rivers, duplicate infrastructure for redundancy, larger firefighting forces, subsidised air-conditioning or energy, state-backed insurance in coastal or storm-prone regions, and even border barriers to block climate refugees.

What wasn’t said

The Act Party’s single-page policy document did not discuss these measures, or the higher taxes and larger state likely needed to fund them. It simply argued the Paris Accord was too costly and should be diluted.

“The Paris Agreement demands targets that are disconnected from science and blind to New Zealand’s realities. Net zero targets for carbon dioxide and aggressive methane reduction goals have been set without regard for their economic or social consequences,” it said in the statement. 

“ACT believes New Zealand should remain engaged with the international community, but only on terms that make sense for us. That means pushing for fundamental reform of the Paris framework.”

The document did not explain what that reform would mean globally, but it outlined three domestic policies — the first of which is already Government policy.

ACT would keep agriculture out of the Emissions Trading Scheme, oppose efforts to cut emissions in sectors already covered by the scheme, and lower New Zealand’s overall reduction targets.

The policy document does not call for withdrawal from the Paris Climate Agreement, but says the threat should be used as leverage to renegotiate its terms.

"If these reforms cannot be achieved, New Zealand should be prepared to walk away. We should not continue down a path that undermines our economy for no environmental gain,” Seymour said in a press release.

Bad for business

One reason for this halfway-house stance may be that most large export businesses want New Zealand to remain in the Paris Agreement, at least while their customer nations do.

The United States under President Donald Trump has begun the process of withdrawing, which would make it one of just five countries outside the agreement. The others are Eritrea, Iran, Libya, and Yemen. Hardly major buyers of New Zealand’s premium produce.

While some farmers want to leave, these small businesses are not the ones selling into global markets. Exporters such as Fonterra and major meat processors fear withdrawal would damage market access, brand reputation, and investor confidence.

If farmers got their wish, they could end up with weaker demand for their produce and put the country in a worse financial situation overall.

This is why Prime Minister Christopher Luxon has repeatedly dismissed any talk of withdrawal, a position he reiterated at a press conference today.

“We aren’t leaving Paris. It would only damage, hurt, and punish our farmers. Our competitor countries would like nothing more than to see New Zealand products off their shelves,” he said.

“I’m telling you, having worked in these large multi-nationals, they would just move to another supplier anyway. Pulling out of Paris now would be the fastest, quickest way to hurt New Zealand farmers.”

Luxon said the Government had already kept agriculture out of the ETS and would soon announce separate targets for methane and carbon dioxide.

Some farm lobby groups reportedly pressed Luxon to pull out of the agreement on the sidelines of Fieldays in June. One person familiar with the meeting told Interest.co.nz the Prime Minister had “given them a bit of a bloody nose” in response.

The Act Party may be gambling it can have it both ways: courting farmer votes by hinting at withdrawal from the Paris Accord, while knowing Parliament is unlikely to risk export revenue by letting it happen.