Pacific leaders say the number one security issue facing the region is climate change.
New Zealand is spending at under half the rate needed to meet its $1.3 billion international climate change financing target, with advocates “watching closely” to ensure it doesn’t become an act of greenwashing.
Experts are also critical of the fact just $800 million of the fund to support developing countries is new, with $500m reallocated from the existing aid budget. None of the projects financed so far have been financed with new funding.
Advocates have been critical internationally of rich countries pledging to support poorer nations in adapting to climate change impacts, part of their “historical responsibility” for causing the most climate pollution, but then simply reallocating existing aid budgets.
Critics say given this is a new challenge, the aid needs to be “new and additional”, which was specified in the original agreement reached in Copenhagen in 2009 for wealthy nations to mobilise US$100b ($156b) a year by 2020 in climate finance to developing nations, and affirmed at later negotiations
The Government has defended the slow start, however, saying it is committed to developing lasting relationships through the investments and to allocating the full amount by the end of 2025.
In 2022 it also unveiled a high-level strategy about how the money could be spent most effectively, and has indicated future contributions will increase.
In October 2021, the Government announced it would more than quadruple its funding for international climate change aid to $1.3b over four years, with at least half committed to supporting countries in the Pacific.
It was welcomed at the time, seen as a dramatic increase and putting New Zealand nearly at a level where it would be fairly contributing to the US$100b ($156b) annual fund committed to by wealthy countries by 2020.
Comparatively, Australia announced $2.2b in climate finance for 2020-2025, a doubling of Australia’s 2015-2020 pledge, but still placing it well behind New Zealand in spending per capita.
While spending ambitions have increased worldwide, there have been issues with the initial delivery, and it appears New Zealand is no different.
Information provided to the Herald by the Ministry of Foreign Affairs and Trade (Mfat) shows as of November, 10 months after the programme started, $120.7m had been spent.
This was less than half the $270m that should have been spent to be on track to meet the target.
Of that spending so far, about $85m had gone to Pacific countries and/or regional projects - over 70 per cent - and just over $35m to projects around the world, including over $20m to multilateral agencies.
An Mfat spokeswoman said the $1.3b commitment was made up of $500m from the existing aid budget - the International Development Co-operation (IDC) allocation - and $800m in new funding.
Most of the spending so far had come from the baseline IDC allocation, she said.
Based on the strategy launched last year the funding was to be focused on mitigation, adaptation, capacity building, and leveraging other funding, she said.
The strategy also sets out preferences for how the investments will have an impact, such as acting at scale and utilising nature-based solutions, she said.
“As planning for new investments progresses, expenditure will increase significantly,” she said.
Along with the funding spent so far, nearly $80m had been committed to multi-year projects. These included renewable energy projects in Niue ($5.5m) and the Cook Islands ($7.5), $10m to support crop resilience and food security in Fiji, and a $15m partnership with Samoa.
Environmental lawyer Teall Crossen said while it was positive to see $800m of new funding allocated for climate finance, it was a bit misleading to frame the total fund that way.
“Climate finance should be new and additional because climate impacts are causing damage in countries that are least able to cope, and least responsible for climate pollution,” Crossen said.
“These countries were already struggling with major development problems and they’re not responsible, largely, for the pollution.
“Developed countries agreed to provide financing and it has to be new and additional, not just reallocating existing money.
“So it is disappointing about a third is existing development aid, but $800m is new so it is pleasing to see that.”
Crossen said while she understood the need for proper accountability in spending the money, the need was urgent.
“Obviously it’s important that you have proper accountability and that’s what New Zealand wants, but you need to resource that I guess, so that the Pacific get the money when they need it, which is now.”
Oxfam’s climate justice lead Nick Henry said they would be keeping a “close eye” on the Government’s progress.
“It’s good that they’re spending the time to develop genuine partnerships, not just rushing into new projects,” Henry said.
“They’re forming partnerships with Pacific governments. They’re doing a lot of work with civil society, both New Zealand NGOs [non-governmental organisations] and Pacific NGOs, looking at where they can directly support community projects.
“So it’s understandable in the early stages of significantly increasing our climate finance budget it would take some time to get the new projects moving.
“We’re not concerned at this point but it will need to ramp up and continue ramping up over time.”
Henry said it was also positive that New Zealand was providing all of the funding as grants rather than loans, which some countries were counting as climate finance.
He also understood Mfat planned to “significantly ramp up spending over the coming three years”.
“If that then averages out so that we meet our commitments over that period, then I think that would be reasonable,” Henry said.
“But we are at the low end of what our fair share is, if you consider New Zealand’s carbon emissions and GDP [Gross Domestic Product], it could be argued we should be paying more.
“I think there’s a good argument that in the next [carbon] budget period we should continue this trend of increasing contributions to climate mitigation and adaptation.”
Henry said it would have been better to see all of New Zealand’s contribution as “new and additional” but $800m was still “significant”.
Future allocations from the 2022–2025 commitment:
Future allocations from the 2022–2025 commitment:
- implementing the $15m Samoa–Aotearoa New Zealand climate partnership
- implementing the $8m contribution to Tonga’s Climate Change Fund
- supporting $5.5m renewable energy in Niue
- supporting $7.5m renewable energy in the Cook Islands
- contributing $10m for the Fiji-based Centre for Pacific Crops and Trees to support regional crop resilience and food security
- contributing $10m to the Global Research Alliance partnership in Latin America and the Caribbean
- contributing $23.5m to the Global Environmental Facility, a multilateral fund supporting developing countries’ environmental action
Christopher Luxon has now acknowledged it was an issue addressed by Cabinet.