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The value of taking a portfolio approach to climate policy

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Abstract

Market instruments such as emissions pricing are critically important to supporting New Zealand’s low-emissions transition. However, while emissions pricing, such as through the New Zealand Emissions Trading Scheme (NZ ETS), is necessary it is unlikely to be sufficient for a number of reasons. There is significant value in pursuing a dynamic portfolio approach to climate policy with emissions pricing at its core, complemented by a number of additional measures that are supported by robust intervention logic and are designed so as not to substitute for or hinder market signals and mechanisms.

Suggested Citation

  • Melanie Craxton, 2022. "The value of taking a portfolio approach to climate policy," Treasury Analytical Notes Series an22/06, New Zealand Treasury.
    • Handle: RePEc:nzt:nztans:an22/06
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    File URL: https://www.treasury.govt.nz/sites/default/files/2022-10/an22-06.pdf
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    References listed on IDEAS

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    More about this item

    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

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