Future report: New Zealand looks great in 2040: here’s how we did it

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By Thomas Nash * from

The conversation

Opinion – It is 2040 and Aotearoa New Zealand has reduced its greenhouse gas emissions in line with the commitment to keep global warming below 1.5 ° C above pre-industrial temperatures.

People will travel between cities primarily via electric rail by 2040, if Thomas Nash gets his way. (photo file)
Photo: Supplied / Auckland Transport

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

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

Following the emission budgets stipulated by the Zero Carbon Act at the end of 2021, emissions are now correctly integrated into all economic decisions. The emissions trading system has been strengthened and the price of carbon emissions has stabilized at $ 300 per tonne, after reaching $ 75 in 2022 and $ 200 in 2030.

In 2026, New Zealand signed the International Treaty for the Phase-out of Fossil Fuels, which bans the extraction of fossil fuels, phase out their use and requires international cooperation on renewable energy.

Taxes on carbon imports mean that many high-emission business activities are no longer economically viable. Trade unions have played a major role in the industrial strategy underlying the transition to a low-emissions economy.

Local concentration

The Maori economy is larger than any other sector and has enjoyed wider international recognition of the long-term value of climate and biodiversity work.

New Zealand’s economy is built on productive activity that stays within the limits of the planet – including emissions and pollution of land and water – while respecting social demands, such as a decent standard of living for everyone.

Building on their successful response to the Covid-19 pandemic, marae-based organizations are centers of excellence for climate and economic strategy, health and social services, coastal managed retirement and development natural infrastructure.

Public funding was radically rebalanced in the 2020s, offering more for local government and greater partnership between Maori councils, government and organizations. This has allowed for much better delivery of local services and much more meaningful connections within communities.

Councils and council organizations have laid the groundwork for climate transition, helping to address the uneven impacts of climate change on different groups. The councils and mana whenua collectively administer substantial funds for regional development.

Rail returns

The government’s 2022 climate budget provided the massive infusion of funds needed to rethink our cities, which are now organized around public transport, safe and separate routes for cyclists, and vibrant pedestrian zones. People can access fast and frequent light trains and dedicated buses at great rates. Less road space is required for driving, which is now more accessible for those who need it, including people with disabilities and service vehicles.

People travel between cities primarily via electric rail, run by a new national passenger rail agency InterCity, which acquired regional bus operator InterCity in 2023. Through major reforms in 2024, KiwiRail became a operator dedicated to rail freight. A new government agency, OnTrack, oversees the maintenance and renewal of tracks and rail infrastructure.

Passenger rail services cross the North Island main line on upgraded electrified tracks at speeds of up to 160 km / h. The South Island rail uses hydrogen trains powered by locally produced green hydrogen.

Most of the modernization of transport, housing and energy infrastructure has been carried out by a new Ministry of Green Works created in 2025. This ministry partners with local hapū and iwi, as well as with councils through the regional centers. It is supported by the extended government green investment finance company.

Housing for all

Anger over the division between landlords and tenants culminated in a general rent strike in 2024. The government responded with new financial rules ending the treatment of housing as an asset class. Kāinga Ora, Maori organizations and councils have embarked on a massive effort to build public housing.

Most of the new housing is now public infrastructure rather than private homes built to store individual wealth. Public ownership has expanded, especially for entities that provide essential services such as transport, energy and water.

In 2024, the government worked with the councils to focus plans on quality, universally designed housing. Since the adoption of the new building code in 2025, all new homes have high standards for energy efficiency and accessibility. Higher density apartments line public transport routes in major centers, with townhouses in smaller towns. Lumber has replaced concrete and steel in many construction projects.

Changes in housing, transportation and urban design have helped improve health, well-being and physical activity. Health improved considerably after the introduction of universal basic services in 2024 to cover free visits to doctors and dentists as well as free care for children and the elderly.

A building under construction in Wellington

Most of the new housing is becoming public infrastructure rather than private homes built to store individual wealth, under the changes envisioned by Thomas Nash.
Photo: RNZ / Angus Dreaver

Energy goes green

Electricity production has doubled, with a mix of wind, solar and geothermal energy. There are many other energy storage facilities including pumped hydropower. Distributed energy is commonplace. Many councils have helped their communities set up local solar systems, and dozens of cities are completely independent from the national grid.

Green hydrogen is produced at the converted aluminum smelter at Tiwai Point using hydroelectricity. This is used in heavy industry and transportation and exported from Southport.

In 2027, after New Zealand exploded its first carbon budget, the government replaced the MBIE with a new Ministry of Economic Transition. The ministry oversaw the transition to green jobs through a universal job guarantee system.

It has also supported a dramatic reduction in energy consumption in all sectors of society and the economy. This effort had a greater impact on reducing emissions than replacing energy and fuel with renewable sources.

The earth heals

In 2025, the government created a Natural Infrastructure Commission. The term “natural infrastructure” emerged in the 2020s as a term to include native forests, wetlands, coastal environments, and other ecosystems that store and cleanse water, protect against drought, floods and weathering. storms, enhance biodiversity and absorb carbon.

The commission has supported massive land restoration for carbon sequestration and biodiversity, with an annual budget of $ 5 billion from emissions revenues. Among other uses, the fund compensates landowners for land use changes that reduce emissions and build resilience.

Under the new Aotearoa Constitution adopted in 2040, ownership of the conservation area was transferred from Crown ownership to its own legal entity status.

International carbon taxes have transformed agriculture. Dairy herds have shrunk in size and New Zealand is known for its low-emission organic feed and fiber. High-quality meat and dairy products, as well as plant-based protein foods, are supplied to international markets.

Seaweed and aquaculture operations flourished. Along with regenerative agriculture, this transition has reduced pollution and emissions. With the regeneration of native ecosystems, tōtara and harakeke can now be sustainably harvested for wood and fiber.

In urban and industrial areas, water consumption has decreased considerably. Every business, house and building stores its own water. Water use is measured and charges are levied for excess water beyond household needs. No water is ever wasted.

No legend

Algae in the ocean off Kaikōura.
Photo: NIWA / Leigh Tait

A better place

The country feels more stable than 20 years ago. There is hope for the future in a world full of uncertainties following the pandemic that hit the early 2020s.

Many government agencies and councils are now considered useful and relevant, having been endowed with the necessary funds to provide housing, social services, environmental restoration and support for economic change and land use.

Moving away from high-emitting exports has been more successful than expected, but it took tough rules to get there. Some in the business sector have opposed more government guidance and regulations, but it is widely accepted that relying on market forces would not have resulted in a successful transition.

This approach has brought the country to the brink of failure when it comes to climate, biodiversity and social cohesion. After having been a leader in the field of powdered milk and tourism, the country is now a leader in natural infrastructure and the future of food, wood and energy.

In 2040, Aotearoa is a great place to live.

* Thomas Nash is a Social Entrepreneur in Residence at Massey University. He is also a regional councilor for the Greater Wellington Regional Council and a member of the Green Party. He is a board member of New Zealand Alternative and works as an advisor to Auckland-based social enterprise Big Street Bikers.


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