Carbon Pricing in New Zealand's Emissions Trading Scheme

Diaz‐Rainey, Ivan; Tulloch, Daniel J.

doi:10.2139/ssrn.2774530

Cited by 5 publications

(3 citation statements)

References 1 publication

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“…Further, since carbon credits represent the same emissions asset, restrictions must be in place to prevent the import of cheap international units for compliance with domestic emission systems. [73][74][75]…”

Section: Cost Of Emissionsmentioning

confidence: 99%

Current and Future Challenges Facing the European Union's Energy System

Tulloch

Caldecott

2016

SSRN Journal

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The EU energy system is in the middle of a period of profound change. Financing the transition to a low-carbon EU economy is expected to require $2.2 trillion by 2035, requiring substantial private capital. However, investors are hesitant to commit capital due to many challenges facing the energy system. This review provides a high-level discussion regarding the challenges and the potential solutions to address them. We identify four main challenges: 1) structural challenges and reduced capacity adequacy, 2) an incorrect market framework to value flexibility, 3) the inability to finance the energy transition, and 4) the role of transitional fuels. Against these challenges, four potential solutions are: 1) capacity remuneration mechanisms, 2) demand-side response and consumer empowerment, 3) reforms in emissions trading and renewable subsidies, and 4) improved physical interconnections and governance. The EU's ability to address these challenges will directly impact its position as a global leader in green energy investment.

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Section: Cost Of Emissionsmentioning

confidence: 99%

Current and Future Challenges Facing the European Union's Energy System

Tulloch

Caldecott

2016

SSRN Journal

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“…Initially designed by a Labour government (1999–2008), it was heralded as an all sectors, all gases, flexible scheme, but also received criticism on one hand for its reliance on offsetting and unambitious domestic targets, and on the other due to costs to businesses. The NZ ETS is the only national emission trading scheme to include the forestry sector, a move designed to promote land use changes toward carbon sequestration and away from deforestation, but also due to the important role of forestry in New Zealand's emission profile and expected financial incentives associated with a net surplus of units . This made the NZ ETS a financially beneficial scheme.…”

Section: Mitigation Across Spatial Scalesmentioning

confidence: 99%

Climate change and Aotearoa New Zealand

Hopkins

Campbell‐Hunt²,

Carter

et al. 2015

WIREs Climate Change

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With a population of 4.5 million, New Zealand's contribution to total global greenhouse gas (GHG) emissions is relatively low. On a per capita basis, however, New Zealand's GHG emissions are the fifth highest among Annex 1 countries, due in part to the relative size of the pastoral agricultural sector. Biophysical impacts of climate change will largely extend current climate trends, with high regional variability. A review of climate change literature identifies three key risks for New Zealand relating to economic connectedness, perceptions of ‘clean, green’ New Zealand, and social equity. Since 2008, New Zealand's main mitigation response has been the emissions trading scheme (NZ ETS), yet the ETS is currently providing little by way of meaningful incentives for behavior change and low‐carbon investment. Moreover, since declining to enter the second commitment period of the Kyoto protocol, engagement with global climate governance has been modest, and recently released emissions reduction targets have raised questions over New Zealand's responsibilities as a global citizen. In this paper, adaptive responses are considered in connection to key industries (agriculture, tourism) and communities (coastal, Māori), and examine the devolved structure of adaptation. Mainstream media reporting of climate change in New Zealand appears to be aligned with the scientific consensus position, yet it continues to frame climate change as a political issue, prioritizing political over scientific voices. Public perceptions of climate change provide evidence of continued uncertainty relating to human attribution, and depict climate change as a spatially distanced risk which could affect support for government action on climate change. WIREs Clim Change 2015, 6:559–583. doi: 10.1002/wcc.355 This article is categorized under: Trans‐Disciplinary Perspectives > National Reviews

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“…Diaz-Rainey and Tulloch (2016) proposed three slightly different price breakpoints in the NZ ETS over the same period, reflecting the government's decisions in December 2011 and December 2012 to ban specific sources of Kyoto units. They found that unlike in the EU ETS, the major determinant of domestic emission prices in the NZ ETS was imported units rather than market fundamentals such as energy prices, weather conditions and economic conditions.17 Ministry for the Environment (2016) includes data before mid-2010 from Point Carbon.…”

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confidence: 99%

Lessons Learned from the New Zealand Emissions Trading Scheme

Leining¹,

Kerr²

2016

Motu Working Paper

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The New Zealand Emissions Trading Scheme (NZ ETS) is the New Zealand governments cornerstone policy instrument for meeting New Zealands 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.

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Carbon Pricing in New Zealand's Emissions Trading Scheme

Cited by 5 publications

References 1 publication

Current and Future Challenges Facing the European Union's Energy System

Current and Future Challenges Facing the European Union's Energy System

Climate change and Aotearoa New Zealand

Lessons Learned from the New Zealand Emissions Trading Scheme

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