Z Energy submits on Climate Change Response (Tort Liability) Amendment Bill

Today Z Energy (Z) appeared before the Justice Select Committee in support of the Climate Change Response (Tort Liability) Amendment Bill. Z also made a submission to the Committee outlining our position. As part of this we proactively released an independent economic report on the potential impacts of the Smith v Fonterra (the litigation) case that was prepared for the purpose of the litigation, to help inform understanding of its potential consequences.  

Z’s Chief Executive, Lindis Jones, says the decision to release the report reflects a commitment to transparency and helping inform public understanding considering the Government’s introduction of the Climate Change Response (Tort Liability) Amendment Bill, responding to the litigation. 

“We understand the level of public interest, and the strength of feeling, around this issue. That’s why it’s important to release the report in full, so New Zealanders can see the context for themselves,” says Jones.

The report, prepared by Dr Niven Winchester of Alpine Economics, examines what life would look like if Mr Smith were successful in obtaining the injunctive relief that he seeks, being an immediate, court mandated requirement for the defendants to move to net zero emissions. It compares scenarios of the defendants, or the industries in which the defendants participate, immediately achieving net zero emissions with New Zealand’s existing policy pathway under the Climate Change Response Act (CCRA).

The modelling shows the orders sought in the case would result in very high economic cost. This means reduced GDP, pressure on jobs and higher costs across the economy.

Jones says release of the report is intended to support and encourage a broader national conversation.

“This is not a debate about whether New Zealand should transition to a low carbon economy – we absolutely should and we are. The question is how we do that in a way that works best for New Zealand.”

“As New Zealand’s largest transport energy company, we know the products we sell represent a material proportion of New Zealand’s emissions.”

“We recognise that for many there is real frustration about the pace of change, and we understand the sense of urgency people feel. For us, that strengthens the case for better, more effective policy – not stepping away from a coordinated, collective approach.”

“What the modelling shows is the potential cost of an abrupt, court led transition. It raises a legitimate question about how we manage change in a way that protects jobs, affordability and energy reliability for New Zealanders.”

Z supports a coordinated, government led approach to the energy transition, underpinned by clear, durable policy settings and enforceable targets to drive emissions reductions over time. Tools like the Emissions Trading Scheme (ETS) aim to ensure this happens in an economically efficient way – rather than through costly, fragmented, court driven change.

“Responding to climate change needs significant investment across the economy. A coordinated approach, including tools like the ETS, gives New Zealand the best chance of managing that transition well on behalf of all New Zealanders,” says Jones.

“Our focus remains on practical outcomes – supporting our customers with their needs today while helping them through their transport energy transition by investing in lower carbon transport choices, while supporting a policy framework that delivers lasting progress for New Zealand.”

ENDS

Notes 

• A copy of Z’s Justice Select Committee submission is available here.
• A copy of a briefing note developed by the defendants to Mr Smith’s litigation is available here.
• A copy of the independent economic report is available here.
• The report compares two pathways: a coordinated, economy wide transition led by government policy, or litigation driven approach covering either the defendant companies or their industries.
• The report was prepared for the purpose of the Smith v Fonterra litigation, to help inform understanding of the potential consequences of the case.  
• Confidentiality and litigation privilege has now been waived to help inform public understanding in light of the Government’s introduction of legislation responding to the litigation.
• Z are also releasing a document (referred to in the Ombudsman’s Report as the “Addendum Document”) that we provided to the Government which shares a short example of a third-party raising concerns arising from the relief sought from Mr Smith.