Innovative and inclusive climate transition
We know that climate change mitigation and adaptation are hugely important to New Zealanders. We also know that our response to climate change needs to address the challenges that future generations face but also make the most of resulting job creation and investment opportunities.
To that end, many of the initiatives in Budget 2021 that address climate change are targeted toward improving New Zealanders' environmental wellbeing, income and consumption, jobs and earnings. We are incentivising the uptake of low-emission vehicles and reducing the carbon footprint of New Zealand's vehicle fleet. Some of the choices we've made have been because of the cross-cutting nature of climate change mitigation, for example, by funding the Warmer Kiwi Homes Programme we reduce emissions while improving health outcomes for New Zealanders with lower incomes. This is the just transition we want to see: improving wellbeing across society, while reducing the impacts of climate change.
Our response to climate change requires investments with long-term investment horizons over multiple budgets. In Budget 2021 we are laying the groundwork by focusing on foundational investment to ensure we have the capability and resources required to meet our emissions targets. This includes:
- $300 million to recapitalise New Zealand Green Investment Finance to continue to invest in support of climate change mitigation, with a particular focus on decarbonising public transport, waste and plastics
- the Government also needing to be a leader in its own climate response. Budget 2021 provides $67 million total funding to deliver a coordinated programme and support for agencies to reduce emissions, with the aim of making a number of government organisations carbon neutral by 2025
- beginning our efforts in hard-to-abate sectors, like transport, by preventing higher emissions through keeping trucks off the road and investing in the future of rail, while expanding the Low Emission Vehicle Contestable Fund by creating a new Low Emission Transport Fund.
In this Budget, we have also funded a work programme to explore some options for the funding and financing of climate change. To make real progress to meet our targets, we need to build capability and mobilise investment. The actions we need to take have significant costs associated - which is why from Budget 2022 onwards, we will be recycling the revenue from the Emissions Trading Scheme to emissions reductions programmes.