Government Announces Fund That Will Do Nothing to Reduce Net Emissions

Reacting to the announcement that the Government intends to establish a climate infrastructure fund in partnership with Blackrock, Taxpayers’ Union Campaigns Manager, Callum Purves said:

“This appears to be another Government corporate welfare slush fund that will cost taxpayers greatly without actually delivering net emission reductions. Because emissions are capped under the Emissions Trading Scheme (ETS), any reduction in emissions in the electricity sector will simply free up carbon credits to be used for emissions elsewhere in the economy, such as manufacturing, leading to no net reduction.

“If the projects this fund invests in are worthwhile, this investment will occur in the private sector without the need for government involvement. Price signals from the ETS already encourage emissions reductions and investment in technologies where it is most financially viable to do so. This fund simply puts some of this risk on taxpayers rather than leaving it with private businesses who are best placed to make decisions around what investments are financially viable.

“It seems the Government has been deliberately unclear as to the extent for which taxpayers will be contributing to the fund in order to shy away from how much ordinary New Zealanders will be paying for this climate virtue signal. Blackrock could set up this fund without government involvement; it is unclear why taxpayers should be on the hook for a scheme which will likely end up socialising the costs and privatising the benefits of the investments made through the fund.”