New Zealand to launch world-first climate change rules

New Zealand is to become the world's first country to bring in a law forcing its financial firms to report on the effects of climate change. The country wants to be carbon neutral by 2050 and says the financial sector needs to play its part. “Banks, insurers and fund managers can do this by knowing the environmental effect of their investments,” says its Climate Change Minister James Shaw. "This law will bring climate risks and resilience into the heart of financial and business decision making.”

"Becoming the first country in the world to introduce a law like this means we have an opportunity to show real leadership and pave the way for other countries to make climate-related disclosures mandatory," said New Zealand's Commerce and Consumer Affairs Minister David Clark.

"While some businesses have started publishing reports about how climate change may affect their business, strategies and financial position, there is still a long way to go," added Mr Clark.

About 200 of the country's biggest companies and several foreign firms that have assets of more than NZ$1bn ($703m) will come under the legislation.

The law will force financial firms to assess not only their own investments, but also to evaluate the companies they are lending money to, in terms of their environmental impact.

Legislation is expected to receive its first reading very soon. Once the law is passed, companies will have to start reporting on climate change impact in 2023.

Despite pandemic shutdowns, carbon dioxide and methane surged in 2020

 On April 7, 2021, the Global Monitoring Laboratory of the National Oceanic and Atmospheric Administration of USA released a preliminary estimate of the global annual atmospheric increase for key greenhouse gases in 2020. The Global Monitoring Laboratory makes highly accurate measurements of the three major greenhouse gases, carbon dioxide, methane, and nitrous oxide, from four baseline observatories in Hawaii, Alaska, American Samoa, and the South Pole, and from samples collected by volunteers at more than 50 other cooperative sampling sites around the world. 

According to NOAA, levels of the two most important anthropogenic greenhouse gases, carbon dioxide and methane, continued their unrelenting rise in 2020, despite the economic slowdown caused by the coronavirus pandemic response. 

Carbon dioxide levels are now higher than at anytime in the past 3.6 million years. The global surface average for carbon dioxide (CO2), calculated from measurements collected at NOAA’s remote sampling locations, was 412.5 parts per million (ppm) in 2020, rising by 2.6 ppm during the year. The global rate of increase was the fifth-highest in NOAA’s 63-year record, following 1987, 1998, 2015 and 2016. The annual mean at NOAA's Mauna Loa Observatory in Hawaii was 414.4 ppm during 2020. Since 2000, the global CO2 average has grown by 43.5 ppm, an increase of 12 percent.

The economic recession was estimated to have reduced carbon emissions by about 7 percent during 2020. Without the economic slowdown, the 2020 increase would have been the highest on record.

Analysis of samples from 2020 also showed a significant jump in the atmospheric burden of methane, which is far less abundant but 28 times more potent than CO₂ at trapping heat over a 100-year time frame. NOAA’s preliminary analysis showed the annual increase in atmospheric methane for 2020 was 14.7 parts per billion (ppb), which is the largest annual increase recorded since systematic measurements began in 1983. The global average burden of methane for December 2020, the last month for which data has been analyzed, was 1892.3 ppb. That would represent an increase of about 119 ppb, or 6 percent, since 2000. 

Methane in the atmosphere is generated by many different sources, such as fossil fuel development and use, decay of organic matter in wetlands, and as a byproduct of livestock farming. Determining which specific sources are responsible for variations in methane annual increase is difficult. Preliminary analysis of  carbon isotopic composition of methane in the NOAA air samples done by the Institute of Arctic and Alpine Research at the University of Colorado, indicates that it is likely that a primary driver of the increased methane burden comes from biological sources of methane such as wetlands or livestock rather than thermogenic sources like oil and gas production and use. 

Although increased fossil emissions may not be fully responsible for the recent growth in methane levels, reducing fossil methane emissions are an important step toward mitigating climate change. According to NOAA, “Human activity is driving climate change. If we want to mitigate the worst impacts, it’s going to take a deliberate focus on reducing fossil fuels emissions to near zero - and even then we’ll need to look for ways to further remove greenhouse gasses from the atmosphere.”