Story: Economy and the environment

Page 7. New Zealand’s ecological impact

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Despite initiatives that encourage carbon neutrality, and the popularity of products giving the impression that the environmental impact of New Zealand’s economy is low, the opposite is true. The vast bulk of the country’s economic and consumer activities are not focused on trying to be sustainable.

Critical voices

Questions have been raised about New Zealand’s clean, green image for as long as it has been popular.

In 1993 government and exporters reacted strongly against an article in the British magazine New Scientist entitled ‘New Zealand’s poisoned paradise’. The article drew attention to the country’s poor record, since rectified, in disposal of toxic chemicals used in timber treatment and agriculture. In the same year New Zealand’s Parliamentary commissioner for the environment, Helen Hughes, questioned whether ‘clean and green’ was fact or fiction. New Zealand’s environmental quality is mainly due to its low population and not its citizens being clean and green.

Ecological footprint

An ‘ecological footprint’ is a measure of the area of land and sea area required to support the lifestyle of a country’s population, including the absorption of its carbon dioxide emissions. In 2008 New Zealand’s footprint was 7.7 hectares per person, the sixth highest in the world. The global average was 2.7 hectares, the United States’ was 9.4 hectares and China’s was 2.1 hectares.

This figure is high for three main reasons. First, New Zealand’s economy is based on intensive agricultural industries. Second, neither industry nor domestic consumers are efficient users of energy. The amount of energy used to produce a unit of gross national product is high by OECD standards. This reflects earlier years of cheap energy, which limited the incentive to invest in energy-efficient power systems or housing. Third, New Zealanders have a high rate of ownership and usage of motor vehicles. New Zealanders also have high rates of plane travel.

Externalities of the carbon economy


Economists often talk of externalities – costs or benefits generated by markets for which no one pays. For example a car’s exhaust fumes impose a cost on the global environment, yet the driver of the car does not pay for this. In order to pay the true cost economists say that the cost of emitting the carbon dioxide would have to be offset – by planting some trees, for example. This cost would have to be added to the price of the petrol.


Greenhouse gas emissions

New Zealand’s high ecological footprint is reflected in its high per capita ranking for greenhouse gas emissions – 12th in the world in 2008.

The country had an unusual emissions profile. About half of total emissions were of methane and nitrous oxide from the agricultural sector. Methane comes from sheep and cattle belching, and nitrous oxide is produced through the breakdown of animal excreta and the nitrogenous fertilisers applied to farmlands. Most of the rest is carbon dioxide from transport and power generation. Carbon dioxide emissions have been increasing rapidly since 1990. By 2005 they had risen 62% for transport, and 54% in the energy industries (primarily electricity generation). Although New Zealand’s total greenhouse gas emissions are a fraction of 1% of global emissions, recent upward trends are at odds with the country’s clean, green image.

New ways of integrating economy and environment

New Zealand is a signatory to the Kyoto Protocol, which came into force in 2005 and set voluntary targets for greenhouse gas emissions for developed countries to achieve by 2008–12. The overall aim was for a reduction of 5% less than 1990 emissions levels. New Zealand’s agreed target was slightly less ambitious: to reduce emissions to 1990 levels. This takes into account the increased value of ‘carbon sinks’ over that period due to the planting of trees and regeneration of native bush that absorbs carbon.

Since 1990 New Zealand’s greenhouse gas emissions have risen 25%. The penalty for this excess will be the purchase of credits, the cost of which will depend on the traded price of carbon. The government has a number of policies in place to reduce this liability, including an emissions trading scheme to encourage companies that cut emissions and make it more expensive for those that do not. In addition, there are goals to increase power generation from renewable sources, increase the extent of forests that absorb carbon, and research ways of reducing agricultural emissions.

How to cite this page:

Eric Pawson, 'Economy and the environment - New Zealand’s ecological impact', Te Ara - the Encyclopedia of New Zealand, (accessed 6 July 2022)

Story by Eric Pawson, published 11 Mar 2010