Climate investments provide path to economic security
The Government is investing in New Zealand’s economic security by ensuring climate change funding moves away from short-term piecemeal responses and towards smart, long-term investment.
- Climate Emergency Response Fund (CERF) established with $4.5 billion from Emissions Trading Scheme revenue
- Initial allocation of $2.9 billion over four years invested in emissions reductions
- CERF investment mean New Zealand is on track to achieve its first carbon budget targets
“New Zealand trades on its environmental reputation. It is the key to the ongoing security of our primary exports and tourism, our two main export earners. Investing in low-emissions projects and industries provides opportunities for our businesses, and protects both our economic and social wellbeing.
“Increasingly businesses and households are facing the costs of inaction. We’re ensuring the early heavy lifting is being done by the Government in partnership with large businesses as we deliver the reductions needed to meet our targets. Our climate investments will take pressure off Kiwis by providing choices and options for tackling climate change,” Grant Robertson said.
“Climate change is a problem that requires long-term thinking, which is why the CERF is a multi-year fund. By providing financial certainty over longer periods the CERF will ensure climate objectives remain a key part of future Budgets.
“The CERF is funded from ETS revenues, meaning we will directly recycle the costs of pollution back into projects that reduce emissions. This means the polluters are paying, not households.
“At this Budget we are allocating an initial $2.9 billion to kick start our emissions reductions work. The Treasury has calculated an additional $800 million will be generated from the Emissions Trading Scheme in the current forecast period, meaning there is still a further $1.5 billion to be allocated in future budgets.
“The first CERF allocations are the beginning of the investment we need to meet the Emissions Reduction Plan goals. We expect to review the size of the CERF alongside the main Budget allowances as necessary to help achieve New Zealand’s climate objectives.
“This initial allocation is a down payment on the action that will need to be taken over the coming decades to halt climate change,” Grant Robertson said.
For Budget 2022, the CERF has focused on supporting New Zealand’s emissions reduction response, particularly initiatives and programmes aimed at delivering the actions outlined in the Government’s first Emissions Reduction Plan.
A small number of CERF initiatives will be announced on Budget Day and are not included in the package announced today.
The criteria for CERF funding in Budget 2022 were that an initiative:
- was included in the Emissions Reduction Plan,
- would directly reduce emissions,
- had a main objective of removing barriers to or accelerating emissions reductions,
- would support a te ao Māori approach to the climate response,
- would facilitate the development of such proposals in the future, or
- would address the distributional impacts of emissions reducing policy.
“The next review of the size of the CERF is likely to be in the Budget Policy Statement for Budget 2023. At that time, we expect to roll out another year of the fund so that it extends to cover the 2026/2027 financial year,” Grant Robertson said.