"Beyond the Barricade" - The backstory from a musical tribute to emissions trading

By Catherine Leining, Policy Fellow, Motu Economic and Public Policy Research

In September 2018, the New Zealand Emissions Trading Scheme (NZ ETS) marked its first decade of operation. I was part of the core group of government officials who designed the system back in 2007 and 2008. Since then, I have continued to work both inside and outside of government to advance its progress. Having decided that the dramatic story of heartbreak and hope deserved nothing less than a little musical theatre, I filmed a short musical tribute on my iPhone. It made its debut at a birthday party for the NZ ETS at the Ministry for the Environment, and was posted online for fun together with a media release from Motu Economic and Public Policy Research.

The idea came to me when I was washing the dinner dishes and puzzling over how to help people understand the story of what happened. Say the words "emissions trading" and many people glaze over and tune out. Most of the rest of them say something about "dodgy carbon credits," recalling how our emission price dropped very close to zero because of unlimited overseas units. The system has had no significant impact so far on domestic greenhouse gas emissions by the government's own admission. It has taken most of a decade for the emission price to recover to the point where we started.

Why NZ's emissions trading scheme should have an auction reserve price

By Dr Suzi Kerr and Catherine Leining, Motu Economic and Public Policy Research 

While people's eyes often glaze over when they hear the words “emissions trading”, we all respond to the price of carbon.

Back in 2010, when the carbon price was around NZ$20 per tonne, forest nurseries in New Zealand boosted production. But when prices plunged thereafter, hundreds of thousands of tree seedlings were destroyed rather than planted, wiping out both upfront investment and new forest growth.

Emission prices have since recovered but no one knows if this will last. With consultation underway on improving the New Zealand Emissions Trading Scheme (NZ ETS), the government should seriously consider a "price floor" to rebuild confidence in low-emission investment. 

Zero Carbon Bill Submission

by Catherine Leining and Suzi Kerr.
The New Zealand government has recently consulted on its proposal for a Zero Carbon Bill. This would:

• set a new and more ambitious 2050 greenhouse gas emission reduction target
• establish interim five-year “emissions budgets” consistent with meeting those targets
• require the government to issue plans for achieving its emissions budgets
• require preparation of a national climate change risk assessment and national adaptation plan
• set up a new independent Climate Change Commission to advise the government and monitor its progress.

Our full submission on the Zero Caron Bill is available here. In this blog we highlight five key opportunities to improve the government’s proposal.

E-Mission Possible roundtable summaries

by Catherine Leining and Ceridwyn Roberts, Motu Economic and Public Policy Research

The road to a net-zero future is paved with challenging questions for which there are no definitive answers – just choices to be made under uncertainty and consequences to be faced under risk. In order to shed new light on particularly thorny questions for NZ's low-emission transition Motu, Productivity Commission, the Institute for Governance and Policy Studies at Victoria University of Wellington, and the Environmental Defence Society convened a series of roundtables.

We have now completed the summaries from all four E-Mission Possible Roundtables.  We received very positive feedback on all of the roundtables in the series, and want to thank everyone who contributed to their design, funding and implementation.

Budget 2018 and climate change

by Catherine Leining, Policy Fellow at Motu Research

When it comes to the climate change portfolio, Budget 2018 feels like the calm before the storm. It focuses more on policy processes for future action than catalysing action now. Budget allocations will support development of international carbon markets (key to helping New Zealand meet its 2030 target under the Paris Agreement), the Zero Carbon Act, the Climate Change Commission, and amendments to the New Zealand Emissions Trading Scheme (NZ ETS).

Designing a Climate Commission that works for New Zealand

Catherine Leining from Motu Economic and Public Policy discusses today's release of the Zero Carbon Act Report from the Parliamentary Commissioner for the Environment.

Climate change has been described by Lord Nicholas Stern as the greatest market failure the world has ever seen, but it could just as validly be described as the greatest governance failure. Short-term election cycles and under-resourced departments are poorly suited for managing risks that accumulate over generations and policies imposing near-term, local costs in return for long-term, globally distributed benefits.

New Zealand’s Parliamentary Commissioner for the Environment (PCE) has released a report that addresses part of the solution: legislating emission reduction targets and establishing an independent Climate Commission. These are both components of the government’s Zero Carbon Act which is under development.

Decoupling New Zealand’s economic growth from GHG emissions

By Catherine Leining, Policy Fellow at Motu Economic and Public Policy Research.

Global progress to avoid the worst impacts of climate change depends on our ability to separate economic growth and wellbeing from greenhouse gas (GHG) emissions. They cannot continue to increase in lock step. One indicator of progress is our GHG intensity: tonnes of emissions per unit of GDP.

StatsNZ’s first report on New Zealand’s Environmental and Economic Accounts finds evidence this decoupling of our economic growth and emissions is occurring. Over 1990-2015, New Zealand’s economy grew by an average of 3.1% per year while GHG emissions increased 0.9% per year. This means that, over that 25 year period, the economy’s GHG intensity declined by an average of 2.2% per year. That shows progress, but it is not enough.

Approaching a Low-Emission Future: Emission Trading Scheme vs. Command-and-Control Approaches in New Zealand

By Rosemary Irving and Rosa Hill, University of Canterbury 

Rosie and Rosa are undergraduate students. They won the Motu Environment Economics Essay prize in 2017. You can find out more information about Motu's proposal for the Emissions Trading Scheme (ETS) and our wider ETS work.  

Rosie Irving and Rosa Hill

Achieving emission targets can be accomplished through numerous policies; however, some of these policies are more efficient and cost effective than others. Here in New Zealand, we currently run an ETS. Economic rationale supports an ETS policy as being more efficient as opposed to a command-and-control approach for a number of reasons which we will explore in depth below. 

Economic Rationale: How an Emissions Trading Scheme Works

Figure 1: Command-and-control (equal
misery) approach  

 Figure 2: Emissions trading scheme
approach