Eric Crampton • Apr 12, 2021 •
We have not been fans of the Climate Change Commission’s draft report. New Zealand has an Emissions Trading Scheme with a binding cap, and a declining path for net emissions in the covered sector. Measures taken within the covered sector cannot reduce net emissions. NZU not purchased by one sector get purchased and used by another. Regulatory measures around coal boilers … Read More
Eric Crampton • Mar 02, 2021 •
The Climate Change Commission’s recommendations span the breadth of the economy. They are required to come up with sector-by-sector climate budgets consistent with getting New Zealand with net zero emissions under the Zero Carbon Act. The sector-by-sector budgets rest on underlying models. The models build predictions about what will happen as ETS prices rise, and what will happen when some … Read More
Eric Crampton • Mar 01, 2021 •
New Zealand has an excellent Emissions Trading Scheme covering everything except agriculture – a non-trivial exclusion, but we can come back to that later. The ETS has a cap. Net emissions from the covered sector cannot exceed the cap. So any other regulations that affect sectors covered by the cap only shift things around within the cap and affect the … Read More
Eric Crampton • Feb 17, 2021 •
I’m a bit of an ETS-absolutist. Or at least a carbon-pricing absolutist, in a place the size of NZ. I think the Weitzman reasons for preferring a carbon tax to an ETS are second-order relative to political economy considerations, and any weight at all put on switching costs makes it ludicrous to want NZ to flip from an ETS to … Read More
Eric Crampton • Dec 16, 2020 •
My Dom Post column this week makes the case for a carbon dividend. Canada imposes a carbon tax on provinces that haven’t established their own carbon pricing regime, and is set to substantially hike the tax to $170/tonne. How is it politically feasible? Money collected in each province is sent back as a grant to residents in each province. Carbon … Read More
Robert McLachlan • Dec 02, 2020 •
Following this week’s climate emergency declaration, New Zealand will have to face up to the fact it has one of the worst climate records of industrialised nations. Of 43 industrialised countries — known as Annex 1 countries — 31 are experiencing a drop in emissions. But 12 have seen net emissions increase between 1990 and 2018, and New … Read More
Eric Crampton • Dec 20, 2019 •
Eloise Gibson covers the carbon costs of tourism over at Newsroom: But in reality: “value-led tourism growth may actually worsen those pressures that are linked with consumption. Higher-value visitors, by definition, consume more goods and services, all of which have an associated greenhouse gas and solid waste footprint. To the extent that these goods and services are relatively energy … Read More
Guest Author • Aug 28, 2019 •
Climate Explained is a collaboration between The Conversation, Stuff and the New Zealand Science Media Centre to answer your questions about climate change. If you have a question you’d like an expert to answer, please send it to climate.change@stuff.co.nz Would you please explain how the New Zealand Emissions Trading Scheme (ETS) works in simple terms? Who pays and … Read More
Robert McLachlan • May 02, 2019 •
We know what we have to do to beat climate change: electrify everything, and stop investing in things that burn fossil fuels. In New Zealand, that has been hard to do. Thirty years of climate policy have left us with only two main tools: the Emissions Trading Scheme, and an ‘aspirational’ target of 90% renewable electricity by 2025. The ETS … Read More
Eric Crampton • Oct 09, 2018 •
New Zealand has an emissions trading scheme. It isn’t perfect. But for the sectors covered by the ETS, including transport, best policy for reducing carbon dioxide emissions is fairly simple: buy and retire credits. The government simply cannot know whether the cheapest way of reducing CO2 emissions is by getting the least efficient cars off the road; having people switch … Read More