The NZ ETS: Better equipped for the journey – but still unsure of the path

by Catherine Leining, Policy Fellow at Motu Economic and Public Policy Research

Every tramper knows the value of good gear. A well-designed backpack that distributes the weight to the areas of greatest strength can transform the experience of a challenging bushwalk.  

The changes to the New Zealand Emissions Trading Scheme (NZ ETS) announced by the government last month will usefully equip the system for the journey to net-zero domestic emissions. Like a good backpack, they offer a sturdy framework for distributing mitigation responsibilities and costs across the economy. However, we still do not know what route lies ahead, what pace we will set, what provisions will sustain our efforts, and who will carry the heaviest weight.

The government has not altered our path through 2020. What longer-term changes can we expect to see in the NZ ETS?

Vast majority of New Zealanders want action and leadership on climate change.

Guest post from Pure Advantage first posted here.

Following the US announcement that they would withdraw from the Paris Climate Change Agreement, we asked if New Zealand should follow suit. A whopping of 92 percent of Kiwis disagreed, not wanting our country to follow President Trump’s decision. New Zealanders are even more united in their commitment to the Paris Accord than Australians who show 87 percent support.

Last week, Pure Advantage released the results of their Climate Survey which talked to 1000 New Zealanders about their perspectives on New Zealand’s climate policy position. The results show that a vast proportion of New Zealanders have the appetite required to effect change and reduce our greenhouse gas emissions.

A new approach to emissions trading in a post-Paris climate

This article was prepared by Suzi Kerr, Catherine Leining and Ceridwyn Roberts at Motu Economic and Public Policy Research. It was first published on The Conversation.

Despite the US withdrawal from the 2015 Paris Agreement on climate change, other countries, including New Zealand, remain committed to cutting their greenhouse gas emissions.

In our report, we explore how New Zealand, a trailblazer for emissions trading, might drive a low-emission transformation, both at home and overseas.

Turning off the tap

Emitting greenhouse gases is a lot like overflowing a bathtub. Even a slow trickle will eventually flood the room.

The Paris Agreement gives all countries a common destination: net zero emissions during the second half of the century. It is also an acknowledgement that the world has only a short time to turn the tide on emissions and limit global temperature rise to below two degrees. The sooner we turn down the tap, the more time we have for developing solutions.

Retooling the emissions trading scheme to ‘decarbonise’ NZ

There are practical ways to change the NZ ETS so it delivers clear and predictable emission price signals. This would ensure that New Zealand’s emitters reduce their greenhouse gases more quickly than is currently happening.  

A new paper released today by Motu Economic and Public Policy Research suggests a package of changes to improve the NZ ETS. The proposal emerged from discussions over the past year among diverse cross-sector experts involved in Motu’s ETS Dialogue. 

New report highlights need for coastal homeowners, government, and the insurance industry to plan for climate change

by Susan Livengood, Director of Partnerships for the Deep South National Science Challenge.

As New Zealand counts the cost of widespread flooding this month, a new report identifies key questions we need to answer to better prepare our coastal communities for climate change.

The Insurance, housing and climate adaptation report, commissioned by the Deep South National Science Challenge, highlights issues New Zealand may face as it grapples with “increasingly severe risks” for coastal housing – particularly sea level rise which is expected to exacerbate the frequency and impacts of flooding and storm surges.

It was hard not to think of this report as I drove along the Thames Coast Road in the wake of last week’s storms. Huge boulders lay on the road, pohutukawa trees ripped from the earth by landslides lay dying in the sea, and the splash of waves on the road reminded me just how susceptible to sea level rise this area is.

International transfers of mitigation to achieve the goals of the Paris Agreement

By Suzi Kerr (Motu Economic and Public Policy Research) and Mike Toman (World Bank)

More than a year has passed since the signing of the Paris Agreement under the United Nations Framework Convention on Climate Change, in which developed, emerging and developing countries across the world have pledged to limit or reduce their greenhouse gas emissions (GHGs) as a start toward limiting dangerous climate change. Under the Agreement, countries can work together to reduce emissions. 

Mike Toman, a Lead Economist in the World Bank’s Development Research Group, and Motu’s Suzi Kerr have come up with three basic guidelines for financing of emissions reductions in less economically advanced countries:
1. Do not conflate “international carbon markets” with “internationally transferred mitigation outcomes.”
2. Be cautious about the apparent gains from linking emissions trading markets.
3. Create contracts between developed and developing country governments for internationally transferred mitigation obligations.