NZIER outlines how businesses and government can accelerate investments in climate change mitigation and adaptation
Accelerating investments in climate change mitigation and adaptation is essential for New Zealand to address climate risks and build resilience,
according to a new NZIER report.
In a recent analysis, Michael Bealing (pictured above), principal economist at NZIER, highlighted the importance of government policy and business action in creating a sustainable future.
“Climate change is a global challenge that transcends borders. While New Zealand must meet its Paris Agreement commitments, we also need to prepare for the risks of global inaction,” Bealing said.
New Zealand’s reliance on international cooperation underscores the urgency for domestic policies to encourage low-carbon investments and resilience-building initiatives.
Government’s role in creating a low-carbon economy
Bealing highlighted several key areas where government action is critical:
- Enduring policy commitment: Clear, long-term policies give businesses confidence to invest in low-carbon technologies and strategies
- Financial reforms: Changes to market structures, such as creating biodiversity credits or strengthening carbon markets, can make climate investments more attractive
- Support for innovation: Policies that encourage the development and deployment of low-carbon technologies will spur competition and innovation across industries
“Decisive policy commitments, such as those seen with renewable energy and electric vehicle incentives, show businesses that governments are serious about a low-carbon future,” Bealing said.
Businesses must lead through strategic action
Businesses also have a pivotal role to play. Bealing outlined specific actions for companies to incorporate climate change into their operations:
- Integrating climate leadership into governance and management structures
- Communicating risks, opportunities, and actions with stakeholders
- Championing nature-based solutions to enhance natural capital and deliver environmental benefits
“Businesses need to recognize that some degree of climate change is more likely than not,” Bealing said. “Investments in mitigation and adaptation are not only necessary but can offer long-term benefits for companies and their stakeholders.”
Opportunities amidst climate challenges
Climate change also presents unique investment opportunities, including reducing emissions in production and logistics, improving infrastructure resilience, and responding to growing consumer demand for sustainable products.
“Industry bodies are well-positioned to provide research and tools that help businesses assess risks and opportunities,” Bealing said.
By offering frameworks for evaluating climate risks, these organizations can empower small businesses to make informed decisions.
Building a resilient future
The NZIER report stressed that achieving a sustainable future requires collective action from government, businesses, and communities. Strong policy signals, coupled with innovative business practices, can drive the transition to a low-carbon economy while building resilience against climate risks.
“Now is the time to act decisively, addressing barriers and creating incentives that ensure New Zealand is prepared for the challenges ahead,” Bealing said.
This comprehensive approach underscores the need for collaboration to accelerate climate action, benefiting both the economy and the environment.
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