Labour keeps options open after Treasury estimates Paris pledge could cost up to $5 billion

Thursday, 11 June 2026

Labour climate change spokesperson Deborah Russell has declined to clarify whether Labour would spend up to $5 billion buying overseas carbon offsets that the country may need to meet its 2030 emissions-reduction pledge under the Paris Agreement.

However, the party appeared to indicate that could become clear when it released its “full fiscal plan” ahead of the election.

The Treasury estimated today the Government might need to spend between $4.4b and $5b paying other countries to reduce their carbon emissions, in order to meet its pledge to reduce net emissions to 50% of New Zealand’s 2005 gross emissions by 2030.

It made clear there was still a “high degree of uncertainty” over the possible cost of offshore mitigation, but the new estimates narrow down the previous range which had been put at anywhere between $3b and $24b.

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Finance Minister Nicola Willis made clear in December that the Coalition Government would not “send billions overseas” to meet the Paris pledge, saying the emissions reduction obligation was a case of “best endeavours”.

Simon Court, climate change spokesperson for coalition partner ACT, announced yesterday that ACT wanted to leave the Paris Agreement if it couldn’t “rewrite the rules” to reflect what it believed the impact of farming here was.

“If the Paris Agreement cannot accommodate targets that reflect the real warming impact of New Zealand's emissions, then New Zealand should leave it,” he said.

Since Willis described New Zealand’s obligation as “best endeavours”, the United Nations has passed a resolution that some experts believe may have raised the legal stakes.

The UN endorsed an advisory opinion issued by the International Court of Justice that climate change treaties imposed binding obligations on countries, and that they could be required to pay compensation to “injured states” for failing to meet them.

The Government voted in favour of the UN resolution but Foreign Minister Winston Peters said he insisted on a statement noting that it did “not fully reflect New Zealand’s position on the legal issues addressed by the ICJ”.

The $5b slated cost of overseas carbon offsets would be one of a number of potential multi-billion dollar fiscal conundrums for Labour heading into the election, were it to stick to the Paris Agreement pledge.

Others include the possible $12.8b cost of restoring pay equity agreements, and tempering or reversing the Government’s planned public service cuts which are budgeted to cost $2.4b over four years.

Russell said Labour was “committed to meeting our Paris obligations and lowering domestic emissions, because the best way to reduce that bill is to reduce emissions at home”.

She criticised the Government for “cutting domestic climate policies”.

But she would not clarify whether she believed it would be affordable for the Government to budget $5b for offsets that it is often assumed would now be needed to hit the 2030 target, or say whether Labour would do so if in government.

The Treasury paper did not say overseas offsets would definitely be required to meet the 2030 pledge but warned domestic action alone might not be sufficient.

Russell said Labour would release its full fiscal plan ahead of the election.

A party spokesperson said the plan would “account for all our decisions going into the election” but said it was still being developed.