Green report – climate finance in New Zealand

This morning I asked if the Green Party has any sort of plan for transitioning to a non-fossil fuel New Zealand. I don’t think anyone came up with anything, but coincidentally James Shaw launched a report that looks at financing climate change measures.

The report: Climate Finance Landscape for Aotearoa New Zealand: A Preliminary Survey

This report, prepared by consultancy Mōhio, examines climate finance in New Zealand. It includes a snapshot of key existing climate finance flows and a look at the instruments available to the Government and private sector such as grants, debt and bonds.

The report also outlines the enabling environment required to better facilitate the flows of finance toward low emissions and climate-resilient outcomes. This includes considerations such as information flows, tracking, regulations, organisational forms, and wider alignment across innovation, research and development and other environmental and social outcomes.

Notably it suggests what appear to be public/private partnerships of sorts (but not called that): “Finance is blended in the sense that public investments are used to catalyse private investments (or vice-versa)”.

However even if you have finance available you need to have viable energy alternatives to invest in.


Executive Summary (edited)

The transition by financial markets to a low-emissions global economy has already begun. Global capital is increasingly being channelled in directions that prioritise and enable climate-aligned projects to deliver mitigation and adaptation benefits. These capital flows are what we call climate finance; that is, investment and expenditure – public and private, domestic and transnational – that demonstrably contributes to climate mitigation, adaptation or both.

As a country that operates openly in the global economy, New Zealand faces immediate, medium and long-term decisions about how to engage with this transition toward a low-emissions economy, in a way that maximises the advantages of our unique geographic, cultural and political circumstances. Although this transition will require new kinds of investment, this climate-aligned expenditure provides opportunities to create new jobs and industries, to spur growth in different parts of the economy, and to crowd-in new capital from diverse sources through emerging frameworks of impact investment.

The primary focus of this report is domestic climate finance – that is, finance flows that are internal to New Zealand by having domestic use-of-proceeds for climate-aligned projects and activities. (This contrasts with international climate finance, where investment flows from developed to developing countries to support sustainable, climate-aligned development.)

This report shows that there are already a range of financial flows within New Zealand that meet climate finance definitions that meet climate finance definitions. Nevertheless, there are significant opportunities to increase the volume and effectiveness of climate finance flows in order to better align with New Zealand’s international obligations and expectations, not least the collective agreement to reach global net zero emissions by the second half of this century.

Improving the quantity and quality of climate finance is not only a challenge for New Zealand but for all signatories to the Paris Agreement, due to the major global shortfall of adequate climate investment. However, creating a more enabling environment for climate finance flows will not only help New Zealand to meet its international obligations, it will also position New Zealand favourably within the global economy as the transition to lower emissions activities gathers pace.

This report further examines domestic climate finance through the lenses of natural capital and impact investing.

The potential here is captured by the motto: blended finance for integrated impacts. Finance is blended in the sense that public investments are used to catalyse private investments (or vice-versa); and integrated in the sense that finance is directed towards combined social, environmental and economic benefits.

From this perspective, New Zealand Government can play any combination of at least four roles:

  1. As a direct investor, the New Zealand Government already provides multiple grants in areas like energy efficiency and sustainable land management
  2. An investment manager role would emphasise the importance of financing pipelines for climate-aligned projects and companies to nurture innovation to maturity, to provide growth capital for ideas that work.
  3. A market maker role would recognise the New Zealand Government’s capacity to support climate-aligned projects and companies by being first purchaser, or a large-scale purchaser, of climate-aligned goods and services.
  4. A trail blazer role would recognise the New Zealand Government’s capacity to lead the way globally, especially in those sectors where New Zealand has unique mitigation opportunities, such as land use and transport powered by renewable energy.

To enhance New Zealand’s climate finance system, this report identifies ten recommendations  – from low-hanging fruit to more elaborate interventions – that would create a more facilitative enabling environment for climate finance. These are:

Full report (PDF)


This is a ‘preliminary survey’. I would have hoped plans would have been more advanced on how to finance climate change related projects by now.

Leave a comment

31 Comments

  1. robertguyton

     /  April 13, 2018

    “It would help to have some plans in place for ‘NZ’s innovation’. Ditching oil without having a viable replacement could be a disaster. Just stopping drilling won’t make ‘innovation’ magically happen.

    The economy may well fall over if New Zealand followed the Green prescription on oil and gas.”
    So, Pete, you’ve discovered that, despite your hyperbolic reckons (“it would be a disaster…won’t magically happen…the economy may well fall over…”) you’ve quickly found evidence of “some plans” and I’m certain it won’t be long till you find more. Reckon you went off half-cocked?
    Shaws a sharp cookie. Interesting to contrast some of National’s “roads of National importance” proposals with this Green initiative – National didn’t even bother to cost theirs!
    Greens rule!

    Reply
    • This isn’t a plan, it’s a preliminary survey. I think that’s alarming given the Green keenness to implement parts of a plan that don’t yet have solutions.

      Reply
      • Griff

         /  April 14, 2018

        PG
        New Zealand has been planing for a carbon free future for decades,
        All the work has been done multiple times by both government agency’s and effected industry’s.
        The only problem has been the lack of effort from governments to push us forward.
        Key used the excuse of the global finical crisis to stall our efforts in 2008
        Once that threat receded national just sat on their hands going nowhere.

        Reply
        • Kitty Catkin

           /  April 14, 2018

          Well, if you believe that, you won’t be convinced by evidence that shows that it’s not the reality.

          Reply
  2. robertguyton

     /  April 13, 2018

    ” Just stopping drilling won’t make ‘innovation’ magically happen.”
    But, Pete, that’s not what’s happening, is it! I think you’ve jumped the shark.
    Settle down, old chap. Breathe. Regain your composure. Trust the Greens.

    Reply
    • You’re quoting something not in the post and with no link.

      This is a ‘preliminary survey’ with nothing concrete, yet the Greens want to stop fossil fuel recovery as soon as possible. Getting ahead of themselves. There is nothing in this survey that suggests there’s a transition plan.

      I’ve got no reason to trust the Greens on this, yet at least. Despite being in opposition for two decades they are only ready with once side of the equation. That’s a real concern.

      Reply
  3. Alan Wilkinson

     /  April 13, 2018

    The only plan is to coerce business and taxpayers to fund their fantasies. When they work out what they are.

    Reply
  4. admiralvonspee

     /  April 13, 2018

    There seems to be a Gresham’s Law of politics at play here: the coarse driving out the refined. One hopes the road does not become littered with renewable/clean energy corpses the likes of which the Americans have seen over the last decade.

    Reply
  5. Griff

     /  April 14, 2018

    I have been warning right wing voters for years if you just deny the problem you will not be part of the solution .

    What I find alarming is this is a main stream issue.
    Yet we have a small alternative party driving us forward.
    If labour and national took climate change seriously it would not be left to the greens to develop policy and we would be as exposed to the greens wonky ideas going forward .

    Still at lest its not sit on ya hands because we are to afraid to scare voters and upset industry lobbyists as national practiced for a decade.

    Investemnt driven by goveremnt .
    FFS that always ends up just padding the pockets of a few who capture the ear of goveremnt.
    You see it in the insulation industry.
    Use an official supplier and any subsidy is eaten by their profits
    Its cost the same if you forgo the subsidized sector and pay a fee market firm to do your job.
    Best thing goveremnt can do is skew the market in a neutral way like carbon tax or tax on all ICE cars and allow the market to dictate the supplier of the outcome.

    As I see it
    Our main issues are
    Dairy sector use of coal.
    Transport fuel.
    Generation capacity to supply an increasing demand for electric transport.

    Dairy should be told an end date for coal use with a quickly rising tax on its use from five years ahead giving them time to invest in alternatives.

    Rising purchase Tax on new petrol and diesel assets to make the purchase of alternatives more competitive.

    Feed in tariff for solar/storage linked to wholesale rate that guarantees a reasonable return for an investor instead of lining the pockets of the large electricity retailers.

    Remove wind generation from the resource manage act so we don’t get the absurd situations like were are large project is stopped because it might scare someones pet horses as happened in wiauku a few years ago.

    Reply
    • Gezza

       /  April 14, 2018

      Dairy sector use of coal?

      Reply
      • Gezza

         /  April 14, 2018

        Ah – sorry. Forgot about Fonterra.

        Reply
        • robertguyton

           /  April 14, 2018

          Massive users of coal (Lignite in Southland) dirty, polluting, climate changing behaviour.

          Reply
          • Gezza

             /  April 14, 2018

            What else can you give them?

            Reply
            • robertguyton

               /  April 14, 2018

              Waste wood. Already, many Southland industries have made the change to waste wood. Fonterra could, but won’t. Venture Southland has done fantastic work here.

            • Gezza

               /  April 14, 2018

              Well, if it makes economic sense, why wouldn’t they? Surely they’ve looked at it?

    • Gezza

       /  April 14, 2018

      Rising purchase Tax on new petrol and diesel assets to make the purchase of alternatives more competitive.
      Gonna hurt the low to mid incomes families and individuals used to own vehicle travel independence. A vote loser I would think.

      Reply
      • A lot of low and middle New Zealanders don’t live next to railway lines, bus routes (my local bus route was recently scrapped) and cycleways.

        So financial coercion is going to hit them the hardest – while the rich can afford alternatives.

        It’s going to be very tricky getting the balance right, and I have seen little sign of balance with the greens to date, they tend more towards extreme.

        Reply
        • Gezza

           /  April 14, 2018

          They’ll have to go. 😡 And maybe take Robert & Griff with them. 😉
          Who else have we got? 😳

          Reply
        • Gezza

           /  April 14, 2018

          I was thinking earlier this morning though, about the massive changes bashed in by the Douglas & Richardson administrations – there was no plan for dealing with the adverse consequences & fallout from that – was there?

          It looked like pretty much “Wham bam thank you ma’m, gotta be done – let’s just let it all sort itself out”?

          Reply
          • To a large extent, yes. That was in part forced on them by a crisis facing the country. Overall the reforms were successful, but there were a lot of casualties along the way.

            Some things didn’t work out well, like the more draconian Ruth Richardson approach, and that has been walked back by governments since then – but with some lasting damage done.

            What some Green supporters promote is a lot more drastic – not a change of capitalism, but a change from capitalism. That would be likely to have greater effects and far greater risks than the Douglas changes.

            Reply
            • robertguyton

               /  April 14, 2018

              “What some Green supporters promote is a lot more drastic – not a change of capitalism, but a change from capitalism.”
              Ooooo! Scary!

            • Yes, it is scary for most people, and if greens can’t understand that they are likely to have a very difficult task getting support.

            • Gezza

               /  April 14, 2018

              Well, it’s not particularly scary if they’re out on their ear in 2020 is it?
              They only just scraped in this time round.

            • robertguyton

               /  April 14, 2018

              “The public” will soon realize that a cessation of off-shore exploration for oil and gas is .. nothing, de minimus, and will remember that the Greens started the ball rolling for New Zealand’s transition away from dirty fossil fuel use. The Green vote will strengthen and grow every time “Oily Bridges” talks dirty oil and coal. A brighter future!

            • “The public” are unlikely to vote Green in any numbers if green promoters put more effort into being vindictive arses than promoting positive and potentially achievable goals.

              You seem intent on effectively shitting in the green nest at the expense of building a better forest.

            • Gezza

               /  April 14, 2018

              No – they’ll remember that Labour – Jacinda – did it.

            • Gezza

               /  April 14, 2018

              They’ll remember that JAG doesn’t like old white men (unless they’re forest gardeners) and that she expects there to be no road deaths or heads will roll. 🙂

            • robertguyton

               /  April 14, 2018

              You don’t like it when a “green promoter” pulls your chain, Pete – they should be grateful to finally have some power, tug their collective forelock and get their heads down for the brief time they have in power (and it’s only because of Winston, remember, they don’t deserve what they’ve got, the nutters! Is that the attitude you’d like me to adopt? Nothing worse than an uppity-Green, aye!

            • Kitty Catkin

               /  April 14, 2018

              There are few things worse than a troll putting words in people’s mouths, or trying to.

  1. We await concrete Green action, and can do without the nutters | Your NZ

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