In an interview with Environmental Defence Society CEO Gary Taylor last week, Watts says that, even with coalition partners that either want to pull out of the Paris Agreement or don’t want to pay for offshore offsetting, the government is still committed to meeting the NDC.

“The government has committed in regards to meeting the targets that we’ve signed up to and that is across the coalition. There is consistency and clarity across the government in terms of that commitment, and that is important.”

However, Watts says the 2030 target is a “significant challenge.”

The NDC requires significantly deeper emissions cuts than the domestic target - currently about 100 million tonnes more - and New Zealand is already at “significant risk,” according to the Climate Change Commission’s latest report, of missing even the much easier domestic targets.

The cost of meeting the NDC by purchasing offshore offsetting is estimated to run into the billions.

Watts says there are “a couple of factors” at play: “We didn’t inherit a clear and coherent plan or a viable plan to hit that target so we are having to rapidly assess our options in regards to that.”

He also noted work towards international co-operation, which is crucial for the bilateral agreements needed to buy offshore offsetting under the Paris Agreement.

“We’ve made announcements in regards to the Philippines, Thailand, and more recently California, in regards to putting in place mechanisms that we can engage around Article 6 aspects, and why that’s important is it provides levers and options on the table of which we currently don’t have any, other than an EU arrangement, which is very fiscally expensive.”

Taylor asked him a second time whether the government was planning to renege on the NDC.

“Our climate strategy at the top line says this government is committed to meeting our targets. I don’t think it could be any clearer in regards to that,” Watts said.

However, when Taylor pressed him over whether that meant paying for offshore offsetting, Watts demurred.

“You can’t infer that that means that we’re going to be writing a cheque for the gap. You can’t and should not infer that. Our focus is around ensuring that we can do everything possible, and we’re working through that process at the moment around our options.”

Taylor clarified that Watts meant that not buying offshore offsets was an option.

“The option which we are relentlessly focussed on right now is ensuring that we have all domestic options on the table and in implementation that will allow us to not only meet our domestic obligations and budgets but also to move us on a trajectory around our NDC commitments,” Watts replied.

“So that is the immediate focus but in the background as well there are more broader programmes of work around providing us with optionality in regards to that.”

With lower ambition and a “least cost” approach around domestic emissions reduction, it’s extremely difficult to see how the government could meet this target with domestic action.

The Climate Change Commission has previously concluded there is no way to meet the whole target with action at home.

And New Zealand is lagging behind other countries in forging the necessary agreements for bilateral co-operation.

John O’Brien, managing director Carbon Market Solutions, says that, regardless of this dialogue, the country is “way, way not on track” to meet its Paris Agreement targets. “[New Zealand] will need to either default or purchase up to 100 million international carbon credits which may include allowing to have them imported into the NZ ETS.

“This potential cost of billions of dollars to the New Zealand tax payer is not receiving enough attention or focus from officials and this should be a cause of considerable concern for New Zealand government officials.”

Taylor described his 34-minute interview with Watts as “a precursor” to next month’s Climate Change and Business Conference, which is being hosted by EDS, the Sustainable Business Council and the Climate Leaders Coalition.

Other topics covered in the interview include:

• The draft second Emissions Reduction Plan and required level of ambition 

• The Emissions Trading Scheme 

• Complementary measures  

• Reviewing the 2050 targets, including for methane 

• Nature-based solutions, including in the conservation estate 

• The need for cross-party consensus 

• Consistency with trade agreements 

• Whether ‘least cost’ is the right way

• Adaptation and who pays 

• Public consultation on upcoming policy changes

Watts was shouted off the stage by protestors at the Environmental Defence Society’s conference in Christchurch in June and never delivered his prepared speech. It was the first time a speaker has been shouted down at an EDS conference, with tighter security expected for the upcoming Climate Change and Business Conference next month.