Aotearoa New Zealand is looking good in 2040 – here's how we did it

The year is 2040 and Aotearoa New Zealand has reduced its greenhouse gas emissions consistent with the commitment to keep global heating below 1.5°C above pre-industrial temperatures.

The economy, society, local government, transport, housing and urban design, energy, land use, food production and water systems have all changed significantly. Fossil fuels have been mostly phased out internationally and import taxes are imposed on high emissions goods.

New Zealand is now a world leader in natural infrastructure, clean hydrogen energy, engineered wood and high quality low emissions food. Despite ongoing challenges, with a prosperous economy, most people think the transition was worth it. Cities are more pleasant places to live, air and water are cleaner, nature is more abundant.

Following the emissions budgets stipulated by the Zero Carbon Act in late 2021, emissions are now properly priced into all economic decisions. The Emissions Trading Scheme has been reinforced and the price of emitting carbon has stabilised at $300 per tonne, after hitting $75 in 2022 and $200 by 2030.

In 2026, New Zealand signed the International Treaty to Phase out Fossil Fuels^[1], which prohibits fossil fuel extraction, phases out use and requires international cooperation on renewable energy.

Carbon import taxes^[2] mean many high emissions commercial activities are no longer economically viable. Trade unions have played a major role in the industrial strategy underpinning the transition to a lower emissions economy.

Shutterstock Local focus The Māori economy is bigger than any other sector and has benefited from wider international recognition of the long term value of climate and biodiversity work. New Zealand’s economy is based on productive activity that stays within planetary boundaries – including emissions and pollution of land and water – while respecting social requirements, such as a decent standard of living for all. Building on their successful response to the COVID pandemic, marae-based organisations are prominent as centres of excellence for climate and economic strategy, health and social services, managed retreat from coastal areas and natural infrastructure development. Read more: When climate change and other emergencies threaten where we live, how will we manage our retreat?^[3] Public financing was radically rebalanced in the 2020s, delivering more for local government and a greater partnership between councils, government and Māori organisations. This has enabled far better delivery of local services and much more meaningful connections within communities. Councils and council organisations laid the groundwork for the climate transition, helping address the unequal impacts of climate change on different groups. Councils and mana whenua collectively administer substantial funds for regional development.