The New Zealand government said on Monday it would set up a NZ$4.5 billion ($2.83 billion) climate response fund, spending at least NZ$2.9 billion on cutting pollution over the next four years as it targets net zero emissions by 2050.

The plan puts money towards a broad range of activities including making electric vehicles more accessible, reducing food going into landfill, improving public transport and truck emissions and helping industry to decarbonise.

The government is also introducing a ban on some coal boilers and said it will introduce an emissions pricing mechanism for its key agricultural sector from 2025.

The government said the new Climate Emergency Response Fund will initially receive NZ$4.5 billion from Emissions Trading Scheme revenue, with NZ$2.9 billion to be allocated in this week's budget.

The new Emissions Reduction Plan "delivers the greatest opportunity we've had in decades to address climate change but also move to a high wage, low emissions economy that provides greater economic security by creating jobs," New Zealand Prime Minster Jacinda Ardern said in a statement. Ardern missed the release of the plan after contracting COVID.

The most significant emissions reductions for the period ending December 31, 2025 will come in the energy, industrial and transport sectors, government documents said, adding every sector will have to play a role.

The budget will allocate NZ$1.3 billion to the transport sector for projects such as moving people into electric vehicles, decarbonising the freight and public transport sectors and reducing the need for short car trips. A further NZ$380 million is earmarked for agriculture and NZ$692 million for the energy sector.

"We will directly recycle the costs of pollution back into projects that reduce emissions. This means the polluters are paying not the households," Finance Minister Grant Robertson said in a statement.

The government said NZ$865 million of the NZ$4.5 billion had previously been allocated to international climate finance and a decarbonising fund.

The fund will be topped up with future revenue from the Emissions Trading Scheme.

($1 = 1.5911 New Zealand dollars)