In the May 2022 Budget, the New Zealand government will commit $4.5 billion to new spending on climate change, more than $2,000 per household. The government will also deliver its Emissions Reduction Plan, an array of levies, subsidies, regulations and hard bans. The government will say these interventions are necessary and that they will help deliver emissions targets.

This report reviews the government’s climate change strategy and argues the strategy is based on a misunderstanding of the relationship between the emission trading scheme (ETS) and other policies.