A recent report assessing whether a government’s budget is consistent with its climate change commitments provides a rigorous example of how CSOs can tackle government greenwashing.

The New Zealand Institute of Economic Research (NZIER) released its inaugural independent climate budget assessment using a framework adapted from international assessment standards and rated new spending and tax policies introduced in NZ’s 2023 budget as either climate unfavourable, neutral, favourable, or very favourable. ²

The assessment found that the climate effects could be unfavourable for 80% of the new budget initiatives’ expenditure in terms of the contribution to reducing emissions.

“With government spending being equivalent to 42% of New Zealand’s GDP in 2022, the Budget has a tremendous impact on New Zealand’s emissions profile and ability to meet our international climate commitments. Meanwhile, the Ministry for the Environment’s emissions forecast shows that on the current trajectory, we will never meet our climate commitments. That’s why having the right mechanisms to report on progress and communicate the trade-offs is critically important,” said NZIER Principal Economist Michael Bealing.

The report notes that this initial assessment was forced to rely on judgement and experience, where better data reporting would improve decision-making. To enable future analyses to go beyond carbon emissions to compare the environmental, economic, and social effects of a policy, NZIER is calling for standardised reporting in Budget documents and recommends the new framework be enshrined in law via an amendment to the Public Finance Act.

“Analysing how the annual Budget aligns with our climate targets will improve decision-making, provide greater accountability and transparency on lawmakers’ decisions, and show whether New Zealand is taking the necessary steps to meet its climate commitments. Our work seeks to underpin the sustainability and resilience of Aotearoa New Zealand and we’ll continue to report on this each year, to keep all New Zealanders informed.” While the initial focus is on congruence with climate commitments, in future the NZIER intends to address elements of quality of expenditure, consequences, and impacts.

This may be the first CSO assessment that sets out a recognised framework and rates the impact of all the new policies in the annual budget on whether they are favourable or unfavourable for GHG emissions. Very few governments are publishing information on climate impacts in their annual budgets and fiscal reports, while at the same time governments are typically saying they are acting to meet their climate change targets under the Paris Agreement. With climate change and other environmental crises representing existential threats civil society has a crucial role to play in highlighting government greenwashing and trying to enforce some accountability (Petrie 2021, chapter 6).

The NZIER has shown one way in which this can be done. There is a huge opportunity for CSOs around the world to initiate similar efforts. And for an international CSO to develop an environmental budget transparency index – in similar manner to the way in which the International Budget Partnership launched the Open Budget Survey and Index in 2006 and grew an effective global network of in-country CSOs to fight for budget accountability and social justice.

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