The Green Party says it will hand out $100 million in credit to companies which cut atmosphere-warming pollution in New Zealand.
It will cover the costs of the proposed Green Infrastructure Fund by hiking royalties on oil to 70 per cent - up from current levels of 46 per cent.
Co-leader James Shaw announced the policy at the party's AGM in Auckland this afternoon, telling an audience of about 250 people that the fund would be the "Kiwibank of the green economy".
It will be one of the Greens' first initiatives if they came into power in September, he said.
"The fund will be one of my personal economic development priorities as a new Minister in Cabinet, up and running within 12 months of the formation of the new Government."
The fund is similar to a policy announced by previous co-leader Russel Norman in 2014, though it sets a new goal of reducing New Zealand's net carbon emissions to zero by 2050. The announcement of the new goal, which is more ambitious than any other party, prompted a standing ovation from Green members.
The initial investment of $100 million is relatively small, and companies would be expected to stump up most of the costs of new projects. Shaw said he expected the fund to redirect "billions" into new geothermal and solar projects, energy efficient building and housing materials, biofuels and other clean technology.
It would target a minimum return of 5 per cent, and would aim to cancel out 1 million tonnes of C02 a year.
Speaking to reporters after his speech, Shaw said that when Government showed leadership and "put their own skin in the game", investors were more likely to get involved.
"The experience of other green investment funds around the world is that anywhere from $3 to $10 of private equity come in alongside the government finance.
"There's actually investment money sitting there, waiting to move into this space, that isn't because they're actually waiting for the government to leave."
Iwi in particular were interested in investing in long-term projects, he said.
Labour had been told about the plan to lift royalties and oil, and were believed to be open to it, he said.
The fund had a start-up cost of $10m. Shaw said its total costs were dwarfed by the estimated $1 billion a year which New Zealand will have to spent on carbon credits if it does not reduce its carbon footprint.
"There will be people who say our plan is reckless or irresponsible.
"Irresponsible is to give away $10 billion dollars of the country's wealth away to other countries, asking them to cut their pollution so that we don't have to.
"Reckless is to pretend that nothing has changed when the Port Hills resemble a Sydney bush fire. Or Dunedin South and Whanganui experience one in a 100-year flood events every year."
Shaw took on the climate change portfolio when he became co-leader in 2015. His announcement, which is expected to be complemented by a further climate change policy later in the campaign, places the issue at the heart of the party's election campaign.
Shaw's speech built on previous attempts by Norman to portray the Greens' environmental policies as mainstream, rather than radical.
"We will not be deterred by denialists or cynics or those who mutter silky words about what's realistic or too radical," Shaw said.
The zero carbon goal was not just a climate change solution but an economic opportunity.
"But under the current government, that opportunity is passing us by."
The National-led Government has set a target of cutting greenhouse gas emissions by 50 per cent on 1990 levels by 2050.
The Greens' zero carbon goal stems from the Paris Agreement, which says the world needs to get to a net zero carbon economy within the second half of this century if global warming is to be kept to between 1.5C and 2C.