In 2016, the Morgan Foundation, founded by Gareth Morgan, published a high-profile report titled “Climate Cheats,” which alleged that New Zealand had used fraudulent international carbon credits to meet its emissions targets. While Nick Kearney (ACT Party member and candidate) was not a primary author of this report, he was a prominent defender of the policies and market mechanisms that allowed the use of these credits.

The “Climate Cheats” Report (2016): The report by Gareth Morgan and Geoff Simmons alleged that:-

Fraudulent Credits: New Zealand had met its Kyoto Protocol obligations by purchasing millions of cheap “junk” carbon credits from Russia and Ukraine. These credits represented emissions reductions that had never actually occurred (often referred to as “hot air”).

Government Culpability: The report argued that the New Zealand government (then a National-ACT coalition) knowingly allowed these credits into the Emissions Trading Scheme (ETS) to keep carbon prices low for businesses.

Integrity Issues: Morgan described the use of these credits as a “scam” that undermined New Zealand’s environmental reputation.

Nick Kearney and ACT’s Role: During the period highlighted by the report (roughly 2008–2015), Nick Kearney was a significant figure within the ACT Party, serving on its board and standing as a candidate.

Defense of the ETS Review: ACT was instrumental in the 2009 review of the ETS that allowed the continued use of international units without a “hard cap.” This policy decision was a primary reason New Zealand became a major market for the controversial credits mentioned in Morgan’s report.

Market Efficiency Argument: Kearney and the ACT Party generally defended the use of international credits on the basis of economic efficiency. They argued that New Zealand should be able to meet its targets by purchasing the cheapest possible offsets globally, rather than forcing high costs on domestic industries.

Controversy over Leaks: In 2010, Kearney was involved in a controversy where he was accused of leaking sensitive government documents regarding the ETS to activists. This was part of a broader effort by ACT members to challenge the costs of climate regulation.

2026 Perspective: By 2026, the legacy of the “Climate Cheats” era remains a point of contention in New Zealand politics. The current ACT-influenced coalition has moved to further decouple New Zealand’s ETS from international standards, a move critics argue mirrors the logic of the “Climate Cheats” period by prioritizing domestic economic control over the integrity of global emissions frameworks.

WakeUpNZ

RESEARCHER Cassie