As part of its budget update on Wednesday, Minister of Finance Grant Robertson announced that the Government has created a $4.5 billion Climate Emergency Response Fund (CERF) for the Budget 2022. It also announced that it will be releasing a new Emissions Reduction Plan alongside the budget next year.
Over the next four years, the CERF will draw revenue from New Zealand’s biggest greenhouse emitters (i.e. Fonterra, Z Energy, BP and Mobil) using the Emissions Trading Scheme framework. The revenue drawn to make this fund will be used to meet New Zealand’s climate objectives, including moving to a “low emissions and climate resilient economy in a way that protects vulnerable communities”.
Experts are already asking whether the ETS approach will be able to act as a stable source of revenue for the fund, as such payments are inherently unreliable as opposed to being paid at an ongoing, steady rate.
“As Our Seas Our Future (OSOF) and many other NGOs have said before, Aotearoa will need strong leadership and transformative policy to become a climate resilient country. Currently it’s unclear whether the Climate Emergency Response Fund will be an appropriate way to help achieve those objectives.” says OSOF Policy Coordinator, Gemma Coutts.
“Our entire country requires an overhaul – our transport systems, energy, agriculture, flooding infrastructure. This effectively means that the $4.5 billion needs to transform our economy and society so it’s sustainable and efficient. As this requires an enormous undertaking, we’re uncertain if this will be enough.” says Coutts. ”
“However, as the Climate Change Minister stated, our largest polluters are finally paying a proper price for their climate pollution. This is definitely a major strength for the CERF.”
“A lot has been happening in the environmental legislation sphere recently: the Resource Management Act reform; the Emissions Reduction Plan; waste legislation reform and reduction strategies; and new freshwater regulations, to name a few. Time will tell how appropriate and effective these reforms and the CERF will be,” says Coutts.
