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Friday, 1 May 2020

Illuminating carbon market dynamics using the NZ ETS Cap Explorer Tool

By Ruth Copeland, Communications Director, Motu Economic and Public Policy Research

With the Environment Select Committee due to report back on the Climate Change Response (Emissions Trading Reform) Amendment Bill, perhaps this is a timely reminder to have a good look at the NZ ETS Cap Explorer Tool released last year by Motu. The government plans to improve the current ETS by introducing a ‘cap’ on emissions covered by the scheme. This cap will reduce over time to help us meet our emission reduction targets.



The tool is designed to highlight complex ETS dynamics using data derived from the modelling of hypothetical scenarios. If you adjust the parameters within the various scenarios, you can easily investigate the effect on emission levels and prices.