Climate Change Minister James Shaw says the slow spend from the Climate Emergency Response Fund is frustrating. Photo: RNZ / Angus Dreaver
Tens of millions of dollars earmarked for government climate change projects are yet to be spent, with funding being rolled over.
Treasury documents show about a third of the initiatives in the $3.6 billion Climate Emergency Response Fund (CERF) may not use all their allocated funding for this year.
Trouble recruiting staff is a major culprit.
The unused money ranges from hundreds of thousands to tens of millions of dollars affecting a range of projects, including initiatives to burn less fossil fuel and use more renewables.
Spending is transferred to later years.
Frustrating, but people not sitting on their hands - climate minister
Emeritus professor of sustainable energy and climate mitigation Ralph Sims said the lack of action was alarming.
"We should be in a war footing. If this was World War II we'd be throwing money at it left right and centre, and pouring resources [at it] and training people.
"Climate change is happening faster than most people imagine."
Climate Change Minister James Shaw said the slow spend from CERF was incredibly frustrating.
"It is a concern to all of us, although most of the reasons for [it] are similar to everywhere else in the economy where we are facing supply constraints, human resource constraints, and so on, rather than because people are sitting on their hands."
Shaw said ministers and public sector bosses are pushing hard to get work underway quickly.
Worldwide demand for workers
Reasons for underspending include policy programme and Cabinet decision holdups, and the impact of Cyclone Gabrielle. But difficulty finding staff was the most commonly cited reason.
Sims said qualified and experienced workers were in huge demand.
"It is not just New Zealand wanting these [workers], there [is] worldwide demands. Anybody with the right expertise is highly sought after by many countries.
"We do have a problem - we can't train people up quickly enough."
Deloitte director of sustainability and climate Rikki Stancich said the fund's slow spend was not of itself make-or-break for the climate.
She said it was one of a number of government climate programmes, and only expected to account for 10 percent of the reductions needed in the second half of the decade.
It takes time to implement and scale projects, she said.
"It's not a huge surprise, you can't just receive a budget and immediately invest it. [You] need time to consider how best to do it how best to do it, what kind of framework needs to be built.
"Often those government agencies didn't know they that they'd be getting the funding until right up until the last minute."
A protester with a "no planet B" placard at an Auckland climate protest in May 2023. Photo: RNZ / Rayssa Almeida
Stancich said the Climate Change Commission's climate roadmap has factored in an initial lag while programmes were established. But she said the commission also warned that small delays in the next few years will have compounding effects, and could add up to large undershoots in the long run.
There is a particularly large underspend - about $70 million - in the programme to help industry switch from burning coal and other fossil fuels to electricity.
The Treasury documents said the "first year has required programme design and implementation, more of the expenditure is now forecast to occur in outyears".
Stancich said a significant amount of planning was needed for such a change.
"So it is not just an overnight, one-off: 'Ah, we've got the money, we'll just invest it and hey presto, we're all electrified.'"
The Ministry for Business, Innovation and Employment said "lumpiness" of project spend was a reason some spending was behind forecast, and it would catch up over time.
It said staff recruitment has taken longer than anticipated and caused some temporary delays.
"Work is now well underway across these projects and, where relevant, the funding will be transferred into subsequent years in support of New Zealand's decarbonisation efforts," the Ministry said.
Treasury said it was not uncommon for projects to be underspent at times, and the tight labour market was affecting many sectors, with climate no exception.
It said the CERF fund has only been in place for about a year and it usually takes time to scale-up existing projects and resource new ones.
There was a $20m underspend in the government's international commitments to help other countries - particularly those in the Pacific - to reduce emissions and adapt to climate change.
"Current forecast is less than the approved baseline. Approval to shift some of this allocation into future financial years may be sought," the Treasury document said.
The Ministry of Foreign Affairs and Trade said in a statement there is now a different spend profile over four years than was originally indicated, and work already done was yet to be reflected in the Treasury CERF figures.
It said it was on track to outlay the full $1.3 billion in climate finance by the end of 2025 - the end of the commitment period.
