Budget’s climate impact equal to 100,000 more cars on the road

Just a week before the reveal of this year’s Budget, Cabinet was informed of the significant climate impact of cuts and new policies: 2.8 million tonnes of greenhouse gas emissions out to 2050.
Newly released documents show officials at the Ministry for the Environment who usually vet the climate effects of new policies were shut out of the process instead, the Treasury and an interdepartmental board which coordinates the climate response were responsible for the calculations.
They show significant new climate pollution will arise  from the construction of new school buildings, and emissions that would previously have been avoided in the energy and waste sectors will now occur after policies there were defunded.
The 2.8 million tonnes of emissions is about 5 percent of New Zealand’s annual total. It’s also the equivalent of 100,000 additional cars on the road or 16 months of nonstop coal-burning by the Huntly Power Station.
“The Climate Implications of Policy Assessment (CIPA) of this year’s Budget showed that there will be an additional 2.8 million tonnes of emissions for the period 2024 to 2050. For context, New Zealand’s first three emissions budgets add up to a total of 835 million tonnes of emissions for the period 2022 to 2035,” Climate Change Minister Simon Watts told Newsroom.
“The CIPA covers a broad range of policies in the Budget including improvements to roads and other infrastructure that will in turn have emission impacts.”
Labour’s climate spokesperson, Megan Woods, said the Government’s budget cuts had caused the bulk of the emissions.
“This is what $3 billion worth of budget cuts to climate initiatives results in,” she said.
“We’ve already seen from the Climate Change Commission how much off course this Government and their policies have pushed us in terms of what we need to do. What the Government now needs to explain is how much they’re going to have to spend in other countries making up for what they’re slashing at home.”
Woods added that these figures were only the minimum that might be expected. They don’t include, for example, the effect of decisions taken as part of the Mini Budget last year. Answers to written parliamentary questions from Woods to Finance Minister Nicola Willis show the emissions impact of some of those decisions was more than 8 million tonnes over the next decade.
“We need to remember that the Government did most of its slashing of climate initiatives within days of coming into office through the Mini Budget in December. It’s manyfold more than what we’re seeing, possibly three or four times the size of what we’re seeing in this analysis, in terms of just what damage this Government is doing to our efforts to cut carbon emissions.”
The decision to exclude environment department officials from the analysis also led to a mixup which left ministers with little time to consider the advice.
Officials at the Treasury were under the impression the climate vet – the Climate Implications of Policy Assessment – wasn’t needed. The assessment is required to accompany any policy that might lead to more than 500,000 tonnes of emissions over the next decade.
The mistake Treasury officials made was to use the range of 2020 to 2030. Emissions impacts in this period didn’t pass the threshold, in part because the years 2020, 2021, 2022 and 2023 had already occurred so decisions taken in the Budget would have no impact in those years.
They checked their understanding with officials at the interdepartmental board, who concurred that an assessment wasn’t needed because emissions impacts in the 2020s fell below 500,000 tonnes.
“The CIPA team at the Ministry for Environment are typically consulted on CIPA requirements and development but were not in this case due to Budget sensitivity,” Treasury officials reported.
In April, the Treasury informed Willis that an assessment wasn’t needed. Willis’ official Cabinet paper on the Budget said one wasn’t required, but that she had received a rough assessment of climate impacts.
On May 17, just two weeks before the Budget was released, Treasury officials wrote to Willis to say an assessment would be needed, because the relevant decade was 2024 to 2034, not 2020 to 2030.
“When considering the 2024-2034 period, the quantified emissions impacts are estimated as closer to 0.870 MT CO2e, which is above the threshold for requiring a CIPA,” they wrote.
Willis was provided two options: Work with Watts to provide a completed assessment to ministers or waive the requirement, which is allowed in exceptional circumstances.
She chose the former, taking a paper to Cabinet on May 23 which included the completed assessment.
“The Government is committed to meeting its targets to reduce the impact of climate change and prepare for its future effects, and we have a draft Emissions Reduction Plan that shows we can meet the first and second emissions budgets,” Watts said.
Emissions projections assembled for the second Emissions Reduction Plan did show New Zealand was not on track for the third emissions budget, covering 2031 to 2035. The Budget decisions will lead to 435,000 tonnes of additional emissions in this period, on top of 4.3 million tonnes of emissions from the Mini Budget.