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Monday 25 February 2019

Greenhouse gas recommendations from the Government’s Tax Working Group

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

On 21 February 2019, the Government’s Tax Working Group (TWG) issued a report with advice on using environmental taxes to manage greenhouse gas emissions. It recommended retaining the New Zealand Emissions Trading Scheme (NZ ETS) with reforms to provide greater guidance on price, generate revenue through auctioning, and enable periodic review. It also recommended extending emission pricing to biological emissions from the agriculture sector, whether through the NZ ETS or a complementary system. It suggested those changes can help drive behaviour change to reduce emissions, generate revenue supporting the transition to a more sustainable economy, and, in the longer term, broaden the overall tax base.