2021 Draft Advice for Consultation Emissions Budgets

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Climate Change Commission Via online form submission 26 March 2021

2021 Draft Advice for Consultation

Emissions Budgets

Mercury welcomes and supports the Climate Change Commission s landmark draft advice which builds on the important work of its predecessor the Interim Climate Change Committee (ICCC). The draft advice sets a clear pathway for emissions reductions and re-establishes Aotearoa New Zealand ambition to take meaningful action to meet its international commitments. Mercury commends the Commission s analysis which has challenged all sectors of the community, the economy and government to consider how to both realise the ambition, and to transition to a low carbon future that is inclusive, that supports the most vulnerable in society and recognises the unique perspectives of . Aotearoa New Zealand must focus on material opportunities for decarbonisation The draft advice highlights the critical role the renewable electricity sector will play in ensuring Aotearoa New Zealand transitions to a low carbon future. Demand for renewable electricity generation is expected to double in the period to 2050 as fossil fuels are replaced within the wider energy mix. Mercury strongly supports the Commission s view that an overarching energy strategy and renewable energy target is required. As the analysis notes, demand for renewable electricity will see very high levels of renewable electricity achieved while ensuring prices remain efficient and generally affordable and security of supply is maintained. Mercury supports the recommendation for a national energy strategy and renewable energy target that focuses on ensuring that Aotearoa New Zealand maintains its world leading performance in managing the energy trilemma 1. Critically an energy strategy needs to include multiple sectors and decision makers and deliver effective alignment across key policy mechanisms such as resource planning, local government decision making for renewables investment and support for long-term market signals across multiple political cycles. Mercury fully supports the Commission's view that the most material opportunities for decarbonisation are in the substitution away from fossil fuels in the transport and process heat sectors. Households with an electric vehicle for example are estimated to save around $1000 per year on household energy costs. However, the major impediment to uptake remans the higher upfront capital costs of electric vehicles. To address this barrier, Mercury has invested in a flexible leasing program called Drive which enables households and businesses to benefit from the much lower running costs of electric vehicles. Mercury supports complementary measures to the Emissions Trading Scheme (ETS) to support electric vehicle uptake, particularly around ensuring Aotearoa New Zealand has effective emission standards. Mercury endorses the recommendations from the recent Concept Consulting / Reytna report on measures to accelerated low emission vehicle uptake2 and considers the design of any incentives needs careful consideration to ensure they are truly complimentary and do not result in regressive outcomes for consumers.

1

https://www.worldenergy.org/publications/entry/world-energy-trilemma-index-2020

2

Shifting gear

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How New Zealand can accelerate the uptake of low emissions vehicles (27 January 2021)

The Mercury Building, 33 Broadway, Newmarket 1023 PO Box 90399, Auckland 1142

PHONE: + 64 9 308 8200 + 64 9 308 8209 FAX:

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