NZ's Climate Policy Drift Threatens Billions in Emissions Reduction Costs
Wildfires swept through southwestern France and central Spain this summer after record-breaking heat and drought. Europe experienced its hottest May on record, followed by a July heatwave.
The US had 12 billion-dollar weather disasters in just the first half of 2026, the fifth-worst six months since records began. In New Zealand, more than half of planned emissions cuts to 2030 are at risk, according to the Climate Change Commission.
This is not only an environmental issue but also an economic one. The Treasury has put a number on New Zealand's policy drift: if current settings hold, the Government may need to spend billions buying offshore emissions reductions simply to meet its Paris Agreement commitment.
Climate-related policies have changed significantly in New Zealand since the October 2023 general election, when climate was a key issue. The planned pricing of agricultural emissions was removed from the Emissions Trading Scheme in 2024, and plans for a separate pricing scheme were cancelled in 2025.
The ETS is no longer required to align with the country's commitments under the Paris Agreement and continues to suffer from an oversupply of credits and low-price expectations. The Climate Change Response (Tort Liability) Amendment Bill was passed in Parliament, imposing a statutory bar on climate-related tort claims and applying retrospectively to cases already before the courts.
Each party has its stance on climate change. National holds a commitment to net zero by 2050 but hasn't disclosed much else. Act has withdrawn support for the target and called for New Zealand to withdraw from the Paris Agreement entirely, while Labour would reinstate the ban on offshore oil and gas exploration if elected.
The Greens are the only party with a comprehensive climate platform, committing to establishing Kiwipower, a publicly owned renewable generation company. They also aim to reinstate the ban on offshore oil and gas exploration with existing permits revoked and support agricultural diversification away from emissions-intensive farming.