$327m climate policy will save little carbon
Nelson Hospital’s coal boilers each puff out more carbon than will be saved by the Government’s $327.4 million proposal to make public transport cheaper.
Free public transport for under-13s and half-priced fares for under-25s and Total Mobility cardholders will prevent between 625 and 3825 tonnes of carbon dioxide each year, according to the Ministry of Transport. (The two boilers burn up to 4000 tonnes of coal annually, producing about 9000 tonnes of emissions in total.)
Of all the Budget spending announcements, just one could significantly benefit the environment: $300m provided to the Green Investment Finance, a bank investing in companies’ emissions-cutting efforts.
Economist Eric Crampton criticised the spending, calling it ‘‘a grab-bag of subsidies’’.
Budget 2023 spent $1.7 billion from the proceeds of carbon penalties, paid by polluters and consumers. The funded policies would collectively prevent 4.3 million tonnes of emissions entering the atmosphere.
Prime Minister Chris Hipkins did not comment on the spending announcements. His office referred Stuff to Climate Minister James Shaw who passed questions to Finance Minister Grant Robertson.
In a statement, Robertson said this year’s Budget ‘‘was about promoting climate policies that also reduced living costs’’.
The Ministry of Transport said the carbon savings are
‘‘only a small part of the reason’’ why the Government made buses, trains and ferries cheaper.
‘‘The key reason is to make public transport more accessible to people by providing a more affordable alternative to using private vehicles.’’
University of Otago public health researcher Caroline Shaw said cheaper fares could encourage some people to leave the car at home and take the bus, train or ferry instead.
‘‘I would expect it to have some impact but maybe not a large one.’’
The largest share of cash from carbon penalties – $402.6m – went to the Warmer Kiwi Homes programme, which subsidises insulation, heat pumps and wood burners plus LED lights to reduce electricity and fossil gas usage.
The funding, covering 100,000 houses, would prevent 30,110 tonnes of emissions between now and 2030 – or 4300 tonnes each year. Again, that’s about the average footprint of each of two coal boilers at Nelson Hospital.
It’s also a comparatively modest saving compared with the 800,000 tonnes of carbon dioxide that would be prevented each year through the $140m in funding helping the Glenbrook steel mill introduce a greener process.
More than 98% of Budget 2023’s carbon gains would be achieved by awarding $300m to the NZ Green Investment Finance, estimates indicate.
Providing loans to or taking shares in companies trying to cut carbon, the bank would reduce emissions by an estimated 4.25 million tonnes before the end of the decade. Robertson said it was ‘‘not particularly useful’’ to review Budget 2023 climate spending in isolation. Budget 2022 gave ‘‘a large initial climate investment’’, the minister said.
Last year’s Budget allocated $2.9b to green policies, including funding to ditch fossil-fuelled factory equipment. However, key projects including the Clean Car Upgrade were later scrapped.
All up, 17 policies were funded from the proceeds of the Emissions Trading Scheme. The scheme requires many large polluters (though not all) to buy carbon credits for each tonne of emissions they produce. The goal is to steadily increase the cost of petrol, natural gas and coal to incentivise the switch to green energy. The revenue is ringfenced into the Climate Emergency Response Fund.
Crampton said the Government had turned the pot into ‘‘spoils for lobbyists’’. Spending $1.7b to cut emissions by 4.3 million tonnes was poor value for money, he added.
Companies with solid carbon-cutting ideas would be able to attract private investment, Crampton said.
Using Climate Fund cash to help vulnerable families is a popular idea – but the 2023 Budget spending helped some to the exclusion of others, Crampton said.
‘‘Every family’s circumstances are different and it’s impossible to tell what challenges any might face. For some, it might make more sense to put money towards an e-bike than to have a free bus pass.’’
It would be fairer to distribute the money directly, he argued, paying all New Zealanders a ‘‘carbon dividend’’.
Robertson said a carbon dividend is ‘‘one of a range of policies that we are in the very early stages of thinking about’’.