Green MP Chlöe Swarbrick is pushing back on suggestions that the Government's deal with NZ Steel to decarbonise from coal is a form of "corporate welfare".
The suggestion has come from National and ACT, who have said that the deal is part of an unnecessary subsidy for big businesses.
Yesterday's deal will see the Government invest $140 million to help NZ Steel halve its coal use with a $300 million electric arc furnace. The company said it wouldn't have made the change without state support.
The Government has said the change itself would cut New Zealand's emissions by 1%.
Climate Change Minister and Greens leader James Shaw told Breakfast that he wanted it to be clear that the Government's contributions were allocated from its Climate Emergency Response Fund.
That fund is sourced from polluter proceeds via the Emissions Trading Scheme (ETS).
"The vast majority of New Zealanders are very concerned about climate change, and they want the Government to do more," he said.
"It actually comes from polluters themselves, because the revenue that money comes from comes from the Emissions Trading Scheme, which is paid for by polluters.
"In that sense, it's money that polluters have paid for, which is helping to decarbonise the economy. And that can only be a good thing."
James Shaw told Breakfast that the Government should continue to go further on climate action. (Source: 1News)
ACT deputy leader Brooke van Velden claimed the Greens' support for the deal meant it was now the "party of corporate welfare".
"I can't believe I'm saying this, but the Green Party has become the party of corporate welfare. Now, this is a $140 million payout to a company that made $2.8 billion in profit last year globally," she said.
"They're throwing hundreds of millions of dollars into our economy of hardworking Kiwi taxpayer dollars for corporate welfare when really it's not actually going to reduce emissions globally at all."
National and ACT have previously suggested that a functioning ETS, with a cap on the country's emissions, is enough to push industries in the right direction with reductions.
"Where does this end? Is this just Government giving handout after handout after handout?
"You've created an incentive here, where you've now got companies saying, 'you know, we were going to decarbonise, but maybe we'll just wait a little while because maybe the government will just give us money in a few more years to decarbonise anyway'."
Responding to Van Velden, Green MP Chlöe Swarbrick hit back and suggested industries were already heavily subsidised under previous governments. She added that agriculture also still needed to be included in the ETS' emissions pricing mechanism.
"NZ's biggest ever emissions reduction project" will eliminate 1% of the country’s annual emissions, equivalent to taking all the cars in Christchurch off the road. (Source: 1News)
"This money is coming from the Emissions Trading Scheme from our biggest polluters, it is paying to reduce our emissions. And in turn, that is a win-win, that helps to reduce pressure on our other sectors," she said.
"The point of the ETS is that we invest the revenue that we get from polluters in order to decarbonise sectors. That's the point. And again, if we are to have proper price incentives in place in our economy, then the place that we need to be focusing on is agriculture."
Allocations for industries as part of the ETS also continue to be under the spotlight.
NZ Steel continues to receive "emissions-intensive, trade-exposed" allocations in order to keep the company competitive, though they will be reduced with the new deal.
Shaw said the company received a "very large subsidy" for about 87% of its total emissions profile.
"I think it's also really important for us to reflect on what the former National-ACT Government did, and in 2008 coming in off the back of the Global Financial Crisis," Swarbrick said.
"They froze free allocations to our highest emitters, in order to not have what is called carbon leaching or the situation where manufacturing goes offshore and ends up creating more pollution and long-run.
1News Jordyn Rudd takes a look at the scheme, as the Government releases its new plan to tackle greenhouse gas emissions. (Source: 1News)
"Those free allocations were frozen in time until we came into Government in 2017. To that extent, our biggest polluters in this country were being subsidised above and beyond their productivity gains at an extensive rate of corporate welfare.
The Coal Action Network's Tim Jones told Breakfast that the deal was a "good example of how we can act".
"We need to keep moving in all sectors. Earlier this year, the Government dropped a number of climate policies — some of which did have their problems — and so we are still in a hole in terms of this first emissions budget period," he said.
"These changes at Glenbrook are excellent, but they won't kick in until the latter half of this decade. Across all the sectors, and that includes agriculture, includes transport, as well as industry, we need major emissions reductions in the next few years.
"We can't wait any longer, we've waited far too long already. We have to act, we have to keep acting. This is a good example of how we can act."
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