New Zealand's business community is starting to get to grips with what it will have to do to help reduce the threat of climate change.
Talks in Paris produced a landmark agreement to limit global warming, which was agreed to by all 195 countries who took part.
Putting more freight on rail is one way New Zealand can reduce its emissions. Photo: 123RF
The talks agreed that global temperatures should rise by less than 2°C and preferably closer to 1.5°C, by the year 2100.
The pledges made by nations so far would allow for a more dangerous 2.7°C rise, and a common thread in analysis of the agreement is that countries will have to work hard to bridge that gap.
More on the Paris Agreement
Most business groups are withholding detailed comment on how New Zealand should do this, pending further analysis.
But Sustainable Business Council executive director Penny Nelson said, at first sight, several things could be looked at.
"Our emissions profile is high in the transport space," she said. "So we are looking at freight efficiency and putting more freight on rail and we are working closely with officials on how to remove barriers to getting more electric vehicles."
Ms Nelson said New Zealand business had been deeply involved in the Paris talks from the outset, and she expected to see the sector coming to the table to scale up what it could achieve.
Carbon trading's future
Another way New Zealand could reduce its emissions would be to increase its exposure to carbon trading. This allows firms that emit CO2 to pay others that absorb CO2.
While, on the face of it, the Paris agreement dashed hopes of worldwide carbon trading, it appeared to open a back door for it later on.
However, it also said countries should not rely on carbon markets to make emission reductions for them, but should use them only in addition to actual reductions in real terms.
Despite this, Nigel Brunel from carbon trading firm OM Financial believed emissions trading in this country would eventually mesh in with other schemes overseas.
"You won't get a global price on carbon like you do on gold or oil because every market in the world is different," he said.
"But I think you will see linkages between schemes. By 2025, I think you will see a strong development of international markets."
Climate Change Minister Tim Groser agreed there was a lot of work to do.
He said even existing government policy, of cutting emissions to 11 percent below 1990 levels, would not be easy, costing $30 billion according to Treasury, but that was still what New Zealand would do.
Mr Groser said New Zealand would invest more on researching emissions from agriculture.
This country is also giving $200 million to an international scheme to assist low income countries cope with the results of climate change, which was part of the Paris accord.
