Climate change pact signed between NZ and Australia, covers renewable energy and potential electric car manufacturing

Climate Change Minister James Shaw (left) and Finance Minister Grant Robertson (right) with Australian Climate and Energy Minister Chris Bowen and Treasurer Jim Chalmers, for the inaugural Australia–New Zealand Climate and Finance Ministers’ meeting. Photo / Mark Mitchell

New Zealand and Australian ministers have hit back at greenwashing claims from a Pacific leader as they signed a historic climate change partnership that could pave the way for an electric car industry down under.

Finance and climate ministers from the transtasman countries - both among the highest greenhouse gas emitters in the world per capita - came together in Wellington today for what they said was a “world-first” bilateral climate-focused agreement, which includes a range of areas they can work together to curb emissions and help keep global warming below 1.5C.

Initiatives included boosting the electric-vehicle market, and even collaborating on manufacturing and improving charging infrastructure. It covered sustainable financing and procurement, and decarbonising public services.

They also pledged to meet annually and increase support for the Pacific region as a whole, with island nations particularly vulnerable to climate change.

Vanuatu’s Climate Minister Ralph Regenvanu this week accused Australia of not recognising the Pacific’s biggest security threat — climate change.

He pointed to the recent Budget that boosted spending for military security but comparatively little for climate change initiatives.

Regenvanu said Australia claiming to be taking climate change seriously while subsidising the fossil fuel industry and continuing to build new coal, oil and gas projects was “greenwashing”.

“We need to stop taking oil and gas and coal out of the ground,” he told the Australia Institute. “We need to stop talking about abated or so on. We need to follow the science.”

According to a report by the Conversation, Australia has 116 new coal, oil and gas projects in the pipeline. If they all proceed as planned, an extra 1.4 billion tonnes of greenhouse gases would be released into the atmosphere annually by 2030.

Australia is already the highest emitter of greenhouse gas emissions per capita in the OECD. New Zealand is also one of the highest emitters per capita, largely due to a higher-than-average proportion of agricultural emissions.

Australian Climate and Energy Minister Chris Bowen said he disagreed with Regenvanu’s comments, saying billions had been allocated to renewable energy.

He said the Australian government was “making up for lost time” - a clear dig at the previous government, led by Scott Morrison who was widely criticised by Pacific leaders in particular for weak action on climate change.

Like New Zealand, Australia is committed to reaching net zero emissions by 2050.

The Anthony Albanese-led government recently strengthened Australia’s 2030 emissions reduction target to 43 per cent on 2005 levels - up from Morrison’s 26-28 per cent. Albanese also committed to a National Transition Plan to take Australia to a “supercharged” clean energy future and move away from reliance on coal exports.

Bowen said Australia planned to increase renewable energy to 82 per cent of the energy grid by 2030, up from about 30 per cent currently.

He said with trading partners also transitioning to be carbon net zero, their exports - currently predominantly coal - would need to change. Australia would remain an energy exporter, but increasingly that would be renewable, he said.

“Considering we’re home for nine out of the 10 critical minerals necessary for a[n electric car] battery, we want to add more value. We have one solar panel manufacturer in Australia and we can do better than that.”

New Zealand and Australia, with right-hand drive vehicles, were different to key markets where cars were manufactured, he said.

“So we need to speak with one voice to those manufacturers.”

Asked if, like New Zealand, Australia would commit to ending fossil fuel exploration and if this could form part of the new partnership, Bowen said it wouldn’t and that “every country is going to tackle these issues in their in their own way”.

New Zealand Climate Change Minister James Shaw said it made sense for the two countries to align supply chains and financial systems as they were both pursuing similar goals around electric vehicles and renewable energy.

“Countries around the world are gearing up to electrify their vehicle fleets.

“Smaller markets like ours, at the very far end of global supply chains, are at risk of missing out.

“If manufacturing does move closer to us, then that can only be a good thing in terms of of our countries’ transitions.”

New Zealand Finance Minister Grant Robertson said the partnership was an evolution of the Closer Economic Relations trade agreement, signed 40 years ago.

“I think it’s reflective of the way in which Australia and New Zealand view future economic development; we have to be doing that through a climate lens, we recognise that the future of our planet relies on us taking action [against] climate change.”

Australian Treasurer Jim Chalmers said the two countries could work together in many areas to reach net zero targets.

“This is going to be a defining decade for our countries. And our ability to succeed will be determined, arguably, most of all, by our ability to manage this energy transformation in particular, and to deal with climate change in our economies and in our communities.”