New Zealand’s Nationally Determined Contributions – Potential Fiscal Costs Associated with Offshore Mitigation

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Abstract: New Zealand’s Nationally Determined Contributions – Potential Fiscal Costs Associated with Offshore Mitigation provides indicative estimates of the potential fiscal costs that could be associated with purchases of offshore mitigation towards New Zealand’s Nationally Determined Contributions (NDCs) under the Paris Agreement. It examines potential costs under different domestic emissions scenarios, using purchase price assumptions based on observed international mitigation transactions. The Treasury discloses a Specific Fiscal Risk relating to NDCs through its Economic and Fiscal Updates (EFUs). This publication expands on those disclosures, quantifies the possible fiscal costs, and provides additional explanation. The estimates in this publication represent the Treasury’s best evaluation of possible fiscal costs based on currently available information. The information is provided to support transparency over possible future costs; it does not reflect Government decisions or intentions regarding offshore mitigation. This analysis only considers the potential fiscal costs arising from purchasing offshore mitigation to meet NDCs. Assessing the feasibility of the considered purchase volumes is outside the scope of this analysis, and it also does not seek to reflect the broader range of actions New Zealand may undertake under the Paris Agreement or other climate-related commitments. The results should be read as an assessment of fiscal risk, rather than a set of expected costs, intentions, or recommendations. Actual costs will depend on future policy decisions, market developments, and international arrangements, and the results do not attempt to capture the full range of possible outcomes.

Pages: 20 pages
Date: 2026-06-11
New Economics Papers: this item is included in nep-ene
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Persistent link: https://EconPapers.repec.org/RePEc:nzt:nzttps:tp26/01

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