IDEAS home Printed from https://ideas.repec.org/p/mtu/wpaper/16_06.html
   My bibliography  Save this paper

Lessons Learned from the New Zealand Emissions Trading Scheme

Author

Listed:
  • Catherine Leining

    (Motu Economic and Public Policy Research)

  • Suzi Kerr

    (Motu Economic and Public Policy Research)

Abstract

The New Zealand Emissions Trading Scheme (NZ ETS) is the New Zealand government’s cornerstone policy instrument for meeting New Zealand’s climate change responsibilities. The New Zealand system was designed based on strong linkages to international carbon markets. Understanding how these have affected the New Zealand market is critical both for policymakers in New Zealand and designers of international emissions trading schemes who are considering linkages. We adapt Pizer and Yates' 2013 model of a linked tradable permit systems to conditions in the NZ ETS. We compare the model with price and surrender data and find that the international linkage works as expected. When New Zealand is a buyer of units and linking is certain, NZU prices are roughly equal to the Kyoto unit price. When the New Zealand government announces that New Zealand will de-link – no longer allowing any international units – prices diverge and New Zealand participants meet almost all current obligations with Kyoto units, saving their NZUs for the delinked future.

Suggested Citation

  • Catherine Leining & Suzi Kerr, 2016. "Lessons Learned from the New Zealand Emissions Trading Scheme," Working Papers 16_06, Motu Economic and Public Policy Research.
    • Handle: RePEc:mtu:wpaper:16_06
    as

    Download full text from publisher

    File URL: https://motu-www.motu.org.nz/wpapers/16_06.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Thomas Carver & Patrick Dawson & Suzi Kerr, 2017. "Including Forestry in an Emissions Trading Scheme: Lessons from New Zealand," Working Papers 17_11, Motu Economic and Public Policy Research.
    2. Suzi Kerr & Judd Ormsby, 2016. "The New Zealand Emissions Trading Scheme de-link from Kyoto: impacts on banking and prices," Working Papers 16_13, Motu Economic and Public Policy Research.
    3. Catherine Leining & Suzi Kerr, 2019. "Managing Scarcity and Ambition in the NZ ETS," Working Papers 19_07, Motu Economic and Public Policy Research.
    4. Habib Zaman Khan & Muhammad Nurul Houqe & Ielemia K Ielemia, 2023. "Organic versus cosmetic efforts of the quality of carbon reporting by top New Zealand firms. Does market reward or penalise?," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 686-703, January.
    5. Coleman, Andrew, 2018. "Forest-based carbon sequestration, and the role of forward, futures, and carbon-lending markets: A comparative institutions approach," Journal of Forest Economics, Elsevier, vol. 33(C), pages 95-104.

    More about this item

    Keywords

    New Zealand Emissions Trading Scheme (NZ ETS); Emissions trading; linked tradable permit market; Kyoto units; Certified Emission Reductions (CERs); Emission Reduction Units (ERUs); greenhouse gas; carbon markets.;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mtu:wpaper:16_06. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Maxine Watene (email available below). General contact details of provider: https://edirc.repec.org/data/motuenz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.