- Allocated $2.9 billion across the forecast period for the Climate Emergency Response Fund of climate investments for energy security and lower costs for New Zealanders.
- This is in addition to pre-commitments of $840 million for international climate finance under the Paris Agreement, and $25 million for the Government Investment in Decarbonising Industry Fund.
- Establishes several key work programmes and investments, in particular within transport ($1.3 billion), energy (total $1 billion over seven years), and agriculture and forestry (total $710 million over four years).
These follow previous Government announcements including the 9 May 2022 release of Aotearoa New Zealand’s first three Emissions Budgets. Established in the Zero Carbon Act, this new multi-year budget approach sets out the total emissions Aotearoa New Zealand must cut over the next 14 years and dictates that these budgets must be met through domestic activity alone. This was followed by the 16 May 2022 release of Aotearoa New Zealand’s first Emission Reduction Plan (ERP) which sets out how the Government plans to deliver on the first emissions budget.
Budget one (2022–2025) caps the amount of carbon dioxide equivalent greenhouse gases to 290 megatons over the three years. This is about two megatons per year less than the five-year average from 2017 to 2021. The ERP includes $2.9 billion of spending from the Climate Emergency Response Fund, funded through the Emissions Trading Scheme.
Spending initiatives in Budget 2022 include:
- Transport: $569 million towards a ‘Scrap and Replace’ scheme for low to middle income families to help increase the electric vehicle (EV) light fleet. The scheme allows families to spend on an EV, an e-bike or public transport vouchers. $375 million to fund activities to achieve mode-shift and reduce vehicle kilometres travelled.
- Agriculture and forestry: $339 million to accelerate technology and establish a Centre for Climate Action on Agriculture Emissions. A total of $256 million to help forestry establish carbon sinks and storage.
- Energy: $653 million to increase funding to reduce emissions. The funding is to support businesses to improve energy productivity, bring forward fuel-switching projects, and reduce exposure to carbon price risk.
- Equitable transition for Māori: $31 million funding to establish a platform to strengthen the Crown/Māori partnership and support a holistic approach to climate change that supports an equitable transition for Māori.
The ERP also sets up a range of new advisory groups including a Clean Car Sector Leadership Group, a Centre for Climate Action on Agricultural Emissions and a platform for Māori Climate Action.