New Zealand’s landmark Zero Carbon Act was gutted this week, and hardly anyone even noticed. There’s not been a lot of media coverage of it, and even less debate. The winners of this, and other recent climate change reforms, are the powerful corporates who wanted an easier ride at the public’s expense.
How NZ’s climate change rules were quietly gutted
On Tuesday at 8pm, the New Zealand Government systematically demolished the nation’s climate change architecture. The instrument was not a parliamentary debate, nor even a ministerial speech. It was a quiet press release, uploaded to the Beehive website after markets closed, carefully timed to avoid the scrutiny such changes deserve.
As journalists Henry Cooke and Thomas Coughlan reported, this was deliberate obscurity. The press release “was not emailed to all political journalists, as ministerial press releases generally are”.
The Government’s excuse? The information was “market sensitive.” They were right about that, at least. Within hours, the carbon price crashed by 18 percent, which was the second-largest single-day decline on record. The market had delivered its verdict: New Zealand’s Government cannot be trusted to honour its climate commitments.
What died on Tuesday night was more than a set of policy settings. It was the illusion of cross-party consensus on climate change, a consensus that, as it turns out, was always a con.
The False promise of consensus
The 2019 Zero Carbon Act was supposed to be different. Passed unanimously by Parliament after painstaking negotiations between Labour, the Greens, National, and New Zealand First, it created an independent Climate Change Commission to advise governments, set five-year carbon budgets, and hold successive administrations accountable.
The architects, then-Climate Minister James Shaw and National’s Todd Muller, overseen by Jacinda Ardern and Simon Bridges, presented it as an enduring framework that would transcend electoral cycles. The deal involved significant compromise on the part of the Greens and Labour, who argued that watered-down climate change rules were the necessary price to get business, farmers, and the parties of the right signed up.
It lasted six years. Russel Norman, the former Green MP who now heads Greenpeace NZ, saw it coming. In a blistering social media post this week, Norman wrote: “Ardern and Shaw, willfully or no, were taken for a ride by National and Fed Farmers on climate change. Nats/Feds delayed climate action with false promise of seeking ‘consensus’. As soon as they had the power they ditched He Waka Eke Noa and ‘Zero Carbon Act’. Don’t get fooled again.”
Norman’s analysis nails what happened. The agricultural lobby, led by Federated Farmers and backed by corporate power, never intended to honour the consensus. The bipartisan framework was a tool for delay, a way to run down the clock while appearing constructive. The moment National regained power with enough votes to govern without the Greens, the mask came off.
This playbook is not new. As Marc Daalder documented in Newsroom, agricultural interests have been perfecting the art of “predatory delay” for decades, investing more in lobbying to prevent emissions regulations than in technologies to reduce emissions. The consensus model played perfectly into their hands. Why fight a policy when you can simply agree to study it, consult on it, and negotiate it into irrelevance?
Russel Norman and Matthew Hooton agree
The collapse of the climate consensus confirms a thesis that political commentator Dr Matthew Hooton has been advancing for years. In his Herald column today, Hooton argued that “true policy consensus follows successful leadership and competent delivery,” not pre-emptive grand bargains between parties. He argues that bipartisan agreements are a gimmick that never works, except in marginalising the public from a say in political decision-making.
Hooton’s analysis is brutal: “Through 40 years closely following politics, I can’t recall any important examples of formal policy accords between National and Labour surviving beyond their short-term political value. They have always been about the politics of the moment rather than any genuine commitment to long-term consensus.”
He lists the casualties: the 1993 Superannuation Accord lasted three years before Winston Peters killed it. The housing accord between Nicola Willis and Megan Woods, “grandly announced from Ardern’s podium of truth in 2021”, collapsed in 2023 when Christopher Luxon withdrew. The climate accord has now joined this graveyard of failed bipartisanship.
Hooton’s prescription is clear: “Leadership, not negotiation, builds policy consensus in New Zealand.” He points to lasting reforms: the welfare state, hydro dams, economic liberalisation, paid parental leave, KiwiBank, KiwiSaver. These were all bitterly opposed when introduced but became uncontroversial through competent implementation.
The most pointed example Hooton offers is Helen Clark’s proposed “fart tax” to fund emissions-reduction science in agriculture: “The lesson is pretty clear: had Helen Clark stuck to her guns on the so-called fart tax to fund emissions-reduction science, it would probably be in place now and uncontroversial, saving two decades of pointless further debate.”
This is where Hooton’s analysis converges with Norman’s warning. The agricultural lobby killed the fart tax in 2003 through aggressive opposition, then spent the next two decades using “consensus” processes like He Waka Eke Noa to delay any alternative. Norman argues that the Greens and Labour were suckered into believing that consensus required accommodation, when what it actually required was the courage to implement sensible policy over industry objections.
Ironically, Hooton and Norman (who sit at opposite ends of the political spectrum) are in complete agreement about the fundamental con. The Zero Carbon Act that Labour and the Greens championed was heavily moderated in order to get consensus, but then failed anyway. National signed on when it cost them nothing, then gutted the framework the moment they held power.
Others are also lamenting that Helen Clark’s original carbon tax was never implemented. Writing in BusinessDesk today, editor Pattrick Smellie says: “The evidence that a carbon tax would have been better, would have raised money consistently and promoted decarbonisation at least as effectively as the ETS is surely now unassailable.”
Three pillars of the Zero Carbon Act demolition
What exactly did Climate Change Minister Simon Watts announce in his twilight missive? Three changes that, in concert, dismantle the systems designed to hold them accountable.
First, the independent Climate Change Commission has been stripped of its primary statutory role. It “will no longer be required to provide advice to the Government on emissions reduction plans”, which are the roadmaps that spell out how New Zealand will actually cut emissions to meet its five-year carbon budgets. Professor James Renwick, who served as a Climate Change Commissioner until December 2024, called this change “worrying news” that “does away with one of the fundamental reasons for having the Commission in the first place.”
Second, the Government has granted itself unilateral power to “amend or even wholly replace its emissions plan without any consultation.” Public consultation requirements for setting national emissions budgets have also been eliminated. Independent climate policy expert Christina Hood, who formerly headed the International Energy Agency’s climate unit, called this “unacceptable.” Writing on LinkedIn, Hood stated: “There needs to be public consultation on climate targets—climate ambition is the number one interest of the public. Allowing the minister to amend or replace an ERP with no consultation makes a mockery of the ERP process.”
Third, the Government will “de-link” the Emissions Trading Scheme and all carbon budgets from New Zealand’s international commitments under the Paris Agreement. Previously, ETS settings (the price and volume of carbon credits) had to accord with our Nationally Determined Contributions. Now that requirement is gone.
Who Benefits? Follow the money
These changes did not emerge from policy necessity or fiscal prudence. They are the direct result of lobbying by wealthy vested interests who donated to this Government’s election, then came collecting.
The agricultural sector has been the most obvious beneficiary. They have already secured a halving of methane reduction targets (from 24-47 percent below 2017 levels by 2050 to just 14-24 percent). Now, Federated Farmers and its allies can rest assured that even those weakened targets will face no independent scrutiny. The Government has also scrapped plans to price agricultural emissions, despite National campaigning on implementing such a scheme by 2030.
The pattern of regulatory capture extends beyond agriculture. Consider the recent gutting of climate-related disclosure requirements. In October, the Government raised the threshold for mandatory climate reporting from companies with a $60 million market capitalisation to $1 billion – a figure that was never consulted on in the official discussion document.
As Newsroom’s Jonathan Milne reported, the beneficiaries of this change included political donors. Winton Land, whose owners Christopher and Michaela Meehan (through their company Speargrass Holdings) donated $206,000 to National and Act, was suddenly exempted from reporting requirements. So too was Sanford, the fishing company that hosted political fundraising dinners worth $12,000 and whose chair, Rob McLeod, is an old colleague of New Zealand First minister Shane Jones.
Sanford’s CEO, David Mair, admitted to Milne that he had an “indirect chat” with Wellington, warning that the proposed $550 million threshold was “too low” and that he preferred New Zealand First’s proposal of $1 billion. Weeks later, Commerce Minister Scott Simpson, without any public consultation, implemented exactly that figure.
This is a textbook case of policy-for-donations: corporate donors identify a regulation they dislike, contribute to political parties, lobby privately, and watch as ministers implement their preferred policy without public consultation. The total number of entities required to make climate disclosures dropped from 164 to just 76, exempting a who’s who of corporate New Zealand from public accountability.
The Verdict of the market
The market reacted instantly. As Tom Pullar-Strecker reported in The Post, carbon credit prices “dropped by about 10 percent” immediately, from $51.70 to as low as $41.50, before recovering somewhat to $47.
What does this crash signify? As Daalder explained, it signals “little faith on the part of carbon traders that the Government intends to seriously reduce greenhouse gas emissions.” When the rules are weakened, when independent oversight is removed, when international commitments are severed from domestic action, the market recognises the game being played. Lower ambition means lower carbon prices, which benefits the biggest emitters, such as companies like Fonterra and meat processors, who buy credits to offset pollution instead of reducing it.
Climate Change Minister Simon Watts denied that the price crash was caused by his policy announcement. “It’s a market,” he told reporters, “and the reality is the market is dealing with demand and supply considerations.” But as ANZ economist Matt Dilly noted, “the market for carbon credits was reasonably liquid and it tended to react rationally to market developments.” The market reacted rationally to the realisation that New Zealand’s climate commitments are no longer worth the paper they’re printed on.
Patrick Smellie, writing in BusinessDesk, explained the deeper damage: “These major changes to the ETS suggest that no further evidence is needed to know that no Government can be trusted not to leave the ETS alone, making its capacity to work as a trusted, liquid, tradeable market impossible.” When governments treat the ETS as a political plaything rather than a policy instrument, they destroy its credibility.
The Integrity deficit
This is not policy-making. This is regulatory capture in its purest form. When independent advisers are silenced, when public consultation is eliminated, when accountability mechanisms are dismantled, and when international commitments are severed from domestic action — all in service of corporate donors and agricultural lobbies — we are witnessing the wholesale privatisation of public policy.
The Zero Carbon Act was meant to insulate climate policy from precisely this kind of political interference. The cross-party consensus was supposed to ensure that New Zealand’s climate response would survive changes of government. That consensus is now officially dead. It’s been killed not by public demand, not by evidence of policy failure, not by fiscal necessity, but by the lobbying of wealthy vested interests who want to continue polluting without consequence.
Matthew Hooton is right that consensus actually follows leadership, not negotiation. But leadership requires more than just the courage to implement policy, it requires the integrity to resist capture by powerful interests. Helen Clark should have stuck to her guns on the fart tax. Labour and the Greens should have driven agricultural emissions pricing through Parliament when they had the numbers, rather than seeking consensus with parties acting in bad faith. This week’s events shouldn’t just be embarrassing for the current Government, but also the last one, which essentially put all its climate change eggs in the one basket of compromising with opponents to produce the Zero Carbon Act.
Russel Norman’s warning deserves to be emblazoned on the wall of every progressive politician’s office: “Don’t get fooled again.” The agricultural lobby and its corporate allies will always promise to work constructively, will always call for consensus, will always advocate for “practical” solutions that involve endless consultation and delay. They will sign agreements when out of power and tear them up the moment they control the levers of government.
The lesson is clear: when powerful industries face regulation, they do not adapt; they lobby. And when that lobbying succeeds, they do not just weaken policy; they dismantle the regulatory architecture itself. This is the integrity deficit now at the heart of New Zealand’s climate policy: the accountability mechanisms have been dismantled, the independent advisers silenced, the public shut out, and the international commitments severed. The vested interests have won, again.
Don’t get fooled again, indeed.
Dr Bryce Edwards
Director of The Integrity Institute
Further Reading:
Matthew Hooton (Herald): Leadership not working groups build consensus (paywalled)
Marc Daalder (Newsroom): Govt’s climate strategy: Let it burn (paywalled)
Marc Daalder (Newsroom): Gutting of Zero Carbon Act crashes bipartisan climate consensus (paywalled)
Thomas Coughlan (Herald): Greens accuse Government of late-night gutting of Zero Carbon Act (paywalled)
Science Media Centre: NZ’s climate law to change – Expert Reaction
Henry Cooke (Post): Government loosens range of climate rules, pushing out target for public sector by 25 years (paywalled)
Jonathan Milne (Newsroom): Govt answers fishing chief’s billion dollar question on climate disclosures
Tom Pullar-Strecker (Post): Price of releasing carbon emissions drops 10% after Government amends climate policies (paywalled)
Kate Newton (RNZ): Decision to end some climate policy consultation ‘worrying’, former climate commissioner says
Kirsty Johnston (RNZ): New Zealand guts climate policy it bragged about on the world stage
Pattrick Smellie (BusinessDesk): War on Nature v Going for Growth (paywalled)
Is it capture or is it corruption or is it both? Christopher Luxon promotes himself as a brand expert. He isn’t. He is a brand destroyer and he is actively damaging New Zealand’s brand with nearly everything he says and does. Like Trump, he is toxic. He brings out the worst in people and policy and for that reason among others (lack of empathy, integrity, values) he is intensely disliked. He is also incurious, incompetent, and incomplete. New Zealand will never improve while he is around. Fingers crossed Kiwis get rid of him and his government in 2026.
From my own pursuit of the anthropogenic global warming (AGW) aka climate change saga for probably 10 years now, this is a great result for NZ as Zero Carbon would deliver zero to this nation other than poverty and perhaps a smug feeling of virtuosity to some.
Certainly the Government approach has been a typically cowardly one, attempting to avoid confrontation, when really the country needs to be educated into accepting, if not the reality of AGW from a science perspective, then as least an understanding of a. why whatever we do the global impact of this tiny country could only ever be minute and b. the reality of getting out of economic hard times, which will mean more fossil fuel power generation to avoid continuous rocketing prices, industry shut downs and potential black or brown outs.
This article explains some of it https://www.spectator.com.au/2025/11/the-great-rewiring-unravels/, applying equally to NZ, although it entirely misses the generally downplayed need for ongoing fossil fuel backup. The world (and even Australia) is starting to wake up to nuclear energy as the most straightforward solution even though there's some way to go before mass production skills and supporting industries emerge to reduce cost and time to construct. Unlike wind and solar this will pave way for a global transition to fusion power when this becomes available, which will represent a leap in human evolution beyond fire.