The New Zealand Government is aiming to unlock private capital flows for climate and nature-based solutions, including through the voluntary nature credits market.
The NZ Taxonomy, currently in development, is designed to provide a clear, standardised framework for assessing the environmental performance of economic activities. This will help capital providers mobilise and direct investment towards eligible activities.
CSF initiated an analysis of how the NZ Taxonomy can contribute to the growth of the voluntary nature credits market.
The analysis shows that the NZ Taxonomy contributes towards several of the nature credits market principles outlined by the Government and agreed by Cabinet.
The NZ Taxonomy can help reduce the policy workload for Ministers and officials by describing eligible activities which have already had extensive stakeholder buy-in. The development of these eligibility criteria would otherwise be one of the most time-consuming and contentious policy workloads within the voluntary nature credits project.
The analysis also found that the NZ Taxonomy can help raise private sector confidence in a voluntary nature credits market. Principles key to market operation and activities that are internationally aligned, yet locally relevant, were embedded into the process of developing the taxonomy. Potential participants can see that a range of stakeholder expectations have already been included.
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