Luxon puts Paris Agreement beyond reach of ACT and NZ First

A bottom line, drawn before the votes

Prime Minister Christopher Luxon has taken the unusual step of naming a coalition red line ahead of an election. On 31 August 2026, he told RNZ Morning Report that remaining in the Paris Agreement would be non-negotiable in any post-election negotiations, regardless of pressure from ACT or NZ First.

His reasoning was commercial, not moral. “It’s in New Zealand’s interest to be in the Paris Agreement, because as soon as we would come out, we’re in bad company, there’s only four countries that have pulled out,” Luxon said, warning that leaving would see New Zealand products “kicked off the shelves” overseas.

This is not a new fight. In September 2025, ACT leader David Seymour unveiled a policy calling for New Zealand to weaken its targets or withdraw from Paris entirely. Luxon rejected it then, saying it would “only damage and punish and hurt our farmers.” NZ First has said the deal should be “put out to pasture.” By making it a bottom line now, Luxon is trying to take the question off the table before the coalition haggling starts.

The bit most political coverage missed

The reason this matters to business is buried in the fine print of two trade deals. According to analysis published on 30 August 2026, Paris commitments are embedded as essential elements of both the EU-NZ and UK-NZ Free Trade Agreements. Laura MacKay of Lawyers for Climate Action NZ says plainly there is “no lawful pathway for New Zealand to weaken its existing Nationally Determined Contribution” without risking a material breach and the suspension of trade preferences.

Kay Harrison, New Zealand’s climate ambassador and lead negotiator for five years until 2024, called ACT’s policy “totally disingenuous”, noting that diplomatically and in FTA terms, withdrawal is “not really an option.”

For exporters who spent years lobbying for access to Europe and the UK, Paris is no longer a diplomatic aspiration. It is a contractual condition of the market access they already hold.

Business is on Luxon’s side, not the activists

This is the telling part. The pressure to stay in Paris is coming from industry, not campaigners. On 18 August 2026, the Sustainable Business Council and Climate Leaders Coalition warned that abandoning Paris would jeopardise $22 billion in green growth opportunities, issuing 20 recommendations to political parties ahead of the November election.

Major exporters share the concern. In September 2025, Interest.co.nz reported that Fonterra and meat processors feared withdrawal would damage market access, brand reputation and investor confidence, with customers in Europe already asking for demonstrable climate action.

Officials agree. In August 2025, MFAT and environment officials warned in a confidential memo that backing off Paris would be viewed “extremely negatively” by the US, UK, Canada, Australia and Europe, and would give larger emitters like China cover to do less.

The tension Luxon cannot resolve

Staying in does not make the problem disappear. Treasury’s June 2026 analysis puts the cost of meeting the first Nationally Determined Contribution through offshore mitigation at $4.4 billion to $5.0 billion. Luxon has ruled out sending “billions of dollars offshore.” NZ First has refused to back offshore purchases at all.

Yet New Zealand is well off track domestically. Its first Biennial Transparency Report projects net emissions of 668.2 Mt CO2-e for 2021-2030 against a budget of 579 Mt, a gap of 89.2 Mt CO2-e. The Climate Change Commission has warned that closing that domestically would be costly and disruptive.

So the position Luxon is defending is precise and uncomfortable: stay in Paris, but decline to fund the mechanism that would actually meet the target. As Newsroom noted in 2025, New Zealand has likely already breached its FTAs by repealing the offshore oil and gas ban, and European farmers will not stand by while a competitor skimps on environmental commitments.

The second NDC covering 2031-2035 is easier, with Treasury estimating offshore costs of just $0.2 billion to $1.6 billion because it aligns more closely with domestic budgets.

Luxon’s bottom line buys exporters near-term certainty. Whether it holds depends entirely on the November result, and on whether a coalition partner extracts a price he has now promised he will not pay.

Sources

• PM Christopher Luxon says staying in Paris climate deal non-negotiable in coalition negotiations (2026-08-31)
• ACT’s climate policy ‘totally disingenuous’, says former top climate diplomat (2026-08-30)
• Business leaders warn ditching Paris would imperil $22b in green growth (2026-08-18)
• Treasury Paper 26/01: New Zealand’s Nationally Determined Contributions – Potential Fiscal Costs Associated with Offshore Mitigation (2026-06)
• ACT wants out of Paris Agreement, National says no (2025-09-02)
• Act Party climate policy would ‘punish farmers’, Prime Minister says (2025-09-02)
• The Paris Agreement isn’t perfect. Leaving isn’t the answer (2025-09-08)
• Officials warn of damage to diplomatic relations in secret climate change memo (2025-08-30)
• New Zealand’s first Biennial Transparency Report (2024-12)