Search

Negative carbon emissions options are required to meet long‐term climate goals in many countries. One way to incentivise these options is by paying farmers for carbon sequestered by forests through an emissions trading scheme (ETS). New Zealand has a comprehensive ETS, which includes incentives for farmers to plant permanent exotic forests. This research uses an economy‐wide model, a forestry model and land use change functions to measure the expected proportion of farmers with trees at harvesting age that will change land use from production to permanent forests in New Zealand from 2014 to 2050. We also estimate the impacts on carbon sequestration, the carbon price, gross emissions, GDP and welfare. When there is forestry land use change, the results indicate that the responsiveness of land owners to the carbon price has a measured impact on carbon sequestration. For example, under the fastest land use change scenario, carbon sequestration reaches 29.93 Mt CO2e by 2050 compared to 23.41 Mt CO2e in the no land use change scenario (a 28% increase). Even under the slowest land use change scenario, carbon sequestration is 25.89 Mt CO2e by 2050 (an 11% increase compared with no land use change). This is because, if foresters decide not to switch to permanent forests in 1 year, carbon prices and ultimately incentives to convert to permanent forests will be higher in future years. [ABSTRACT FROM AUTHOR]

The study examines the determinants of the quality of carbon reporting (QCR) by top listed firms of a developed country. Using a sample of the top 50 listed firms of New Zealand (NZ) sampled over a period of 6 years (2015–2020), the study measured QCR index using 14‐items and analysed the data using regression analysis. The study finds that external factors, namely, carbon regulation (Emission Trading Scheme—ETS law), use of a standardised reporting format for non‐financial reporting (Global Reporting Initiative, GRI) template, and environmental and social (E&S) performance, all positively influence the QCR. The study also finds that corporate governance attributes namely board diversity (women's representation on the board) and board size positively influence the QCR. Lastly, the study finds that top firms in NZ have many areas of improvement in reporting quality carbon information. The study is the first empirical research on QCR from NZ firms that evidences multiple institutional factors and governance elements as key explanatory factors driving towards making carbon reporting credible and reliable. [ABSTRACT FROM AUTHOR]

The New Zealand Emissions Trading Scheme allows landowners to be remunerated for the carbon sequestration capabilities of eligible forests established post 1990. For afforested areas of 100 hectares or fewer, carbon sequestration is estimated with the use of default carbon look-up tables administered by the Ministry for Primary Industries. However, a disparity exists between exotic pines (Pinus radiata), where carbon sequestration predictions are regionally differentiated, and native species, where carbon sequestration estimations are neither distinguished by species or locality. This paper aims to highlight this inequality by comparing the calculated carbon storage of endemic tree species with the 'Indigenous Forest' category in the carbon look-up tables. The carbon storage of 12-year-old naturally regenerated tea trees (Leptospermum scoparium and Kunzea ericoides) was calculated using allometric measurements and compared to the look-up tables. The results suggest that carbon look-up tables underestimate the carbon sequestration of native tea trees by 81.8%. A bimodal data distribution suggests that carbon sequestration is heavily dependent on light interception levels. It is recommended that carbon sequestration data for specific native species in different environments are collected and integrated into such tables. [ABSTRACT FROM AUTHOR]

In the context of Industry 4.0 and the urgent need for a decarbonization transition, the Emissions Trading Scheme (ETS) emerges as a vital and cost-effective tool for promoting global decarbonization. While the connections between the ETS, stock, and the energy markets are theoretically strong, the nature of their causality has been a subject of debate in existing research, especially in New Zealand (NZ). Therefore, we quantitatively explore the potential dynamic linkages within the "Carbon-Stock-Energy" system using more advanced techniques, such as nonparametric Granger causality-in-quantile and cross-quantilogram techniques. Our findings attest to a bidirectional causality between the ETS and the markets examined in the short run. The foreseeability of all lag lengths is, moreover, positive in a bullish market context. Thus, price movements in the NZ ETS could contribute to the volatility of price variations in the stock and the energy markets. Fundamentally, the outcomes of the freshly devised regime-dependent portfolio strategy call for strategic investors to switch their portfolios adaptively between short-term and long-term positions in the ETS. In short, the outcomes may give a deeper glimpse into the complex interconnections between the ETS, stock, and the energy markets in NZ. • Quantile causality and dependence are analysed in "Carbon-Stock-Energy" framework. • There is a bidirectional relationship between carbon market and the examined markets in the short run. • The foreseeability of all lag lengths is, moreover, positive in a bullish market context. • A regime-dependent portfolio strategy requires investors to dynamically switch their short- and long-term positions. [ABSTRACT FROM AUTHOR]

Climate Change Acts (CCAs) seek to anchor national climate policy by establishing long‐term targets and lines of accountability that guide the development of other climate policy instruments. However, counter‐pressures to modify CCAs can occur where tensions exist with the provisions of already‐established policies that enjoy substantial political and stakeholder support. Such tensions can be especially pronounced where CCAs necessitate major changes to emissions trading schemes (ETSs) that have formed the mainstay of efforts to reduce national emissions. This article employs a novel anchoring policy framework to examine the dynamics of aligning ETSs with CCAs. We investigate debates on reforms to the New Zealand Emissions Trading Scheme following the introduction of the Zero Carbon Act in 2019 to examine how alignment pressures between anchoring and subordinate policies are negotiated. The analysis reveals several tactics used to increase the acceptability of reforms to the New Zealand Emissions Trading Scheme and protect the Zero Carbon Act’s integrity. The article concludes by arguing that a greater understanding of alignment pressures between anchoring and subordinate policies is essential in enabling both CCAs and ETSs to contribute to achieving decarbonisation goals. [ABSTRACT FROM AUTHOR]

Emissions trading systems (ETSs) are operating and developing in many regions and countries. Doubts have been raised about their effectiveness, but the global picture has many nuances, as the contributions to this thematic issue on carbon markets show. In this editorial, we briefly review some of the achievements and limitations of key ETSs, and provide an overview of the assembled articles. The cases examined in this issue include carbon markets rules under the Paris Agreement, the reform of the EU ETS and the proposed expansion of its sectoral coverage to shipping, and emissions trading initiatives in China, the USA, and New Zealand. The evidence indicates that, despite uncertainties related to future developments, carbon markets are continuing to evolve and expand around the world. [ABSTRACT FROM AUTHOR]

The New Zealand Emissions Trading Scheme (NZ ETS) presents an opportunity to compare the theory of linked emissions trading with practice. From 2009 until October 2012 New Zealand was linked to the market under the 1997 Kyoto Protocol and there was no indication that this link would be broken. A series of events starting in late 2012 cast doubt on the future eligibility of Kyoto units in the NZ ETS, made the future of linking in New Zealand uncertain, and may have contributed to price divergence between offshore and domestic units. Delinking was officially confirmed by the New Zealand government in December 2013 to take effect from 31 May 2015. This raises the question of what the effect of delinking and announcements had on the carbon market. To study this effect, we used daily price data in a difference-in-differences model over the period 1 January 2011 to 1 January 2016. From this model, we found evidence that, even with differing pre- and post-time specifications, the government announcements in 2012 caused prices in the two markets – for New Zealand units (NZUs) and Kyoto units – to decouple and NZUs traded at a premium based on their projected scarcity. This is further backed up by the behaviour of the raw price data and the change in the types of units surrendered over this time period. The NZU price reaction to the government announcements (rather than delinking itself) shows strong evidence of a well-functioning market. Key policy insights The NZU price reaction to the delinking announcement shows strong evidence of the New Zealand carbon market reacting in the present to news about the future: a property of any well-functioning market. The long period of price divergence between the New Zealand and Kyoto markets has led to a large privately held bank that is a liability to the New Zealand Government and reduces the government's ability to auction NZUs. If the NZ ETS had delinked earlier from the Kyoto market it could have avoided a protracted period of arbitrage which significantly inflated the NZU bank. [ABSTRACT FROM AUTHOR]

Certain nations have opted for stimulus-based regulations to curtail emissions, build a liveable, environmentally friendly setting, and work towards aspirational mitigation targets. New Zealand (NZ) prefers an Emission Trading Scheme (ETS) to taxation, mitigating emissions on one hand while retaining incentives for economic growth on the other. As a result, NZ has initiated a legal framework since 2008 to allow its economic sectors to engage in ETS and minimize emissions. Yet, selecting the appropriate sectors and effectively adjusting sector-specific regulations remain critical and complex challenges in the global design of ETS since both excessive and insufficient intervention can lead to inefficiencies in the system's functioning. Therefore, this study begins validating the NZ ETS's abatement potential regarding sectoral carbon intensity by executing the double machine learning techniques, consolidating the ETS efficacy that has robustly mitigated sectoral carbon intensity in NZ during 2006–2020. However, this conclusion seems invalid at the disaggregated level when focusing on forward-backward linkages, where NZ's input-output tables furnish a compelling scenario of sectoral dependencies and the products (residuals) they provide. Altogether, the regulatory requirements are either too strict or too lax, leaving out five of the 24 (as a whole) key sectors. Rather, the ETS could be powerful, providing these five key sectors are well tackled, necessitating a reformulation of the ongoing ETS regulatory regime. • NZ ETS robustly cut sectoral emission intensity at the aggregate level. • The causal effect is verified using a double machine learning model. • The NZ ETS singled out five key sectors. • NZ ETS regulatory system is invalid at the disaggregated level. • The ecological-economic Input-Output table is built to conduct analysis. [ABSTRACT FROM AUTHOR]

New Zealand's Zero Carbon Act passed parliament in 2019 with near-unanimous support, setting a new greenhouse gas emissions reduction target to net zero by 2050. At the centre of this commitment are the plans to strengthen the New Zealand Emissions Trading Scheme (NZ ETS). The NZ ETS started with predominantly unjust design features and is now undergoing a significant reform. Getting the details right is not only key to New Zealand's success in reaching its statutory commitments and enabling ambition under the Paris Agreement, but also to ensure that the NZ ETS becomes sustainable and fair. Greenhouse gas cap-and-trade (GHG CaT) program design has been predominantly guided by and analyzed from a traditional environmental economics perspective, with a focus on efficiency and effectiveness. Justice criteria, on the other hand, have been largely neglected. The article contributes to the scientific research on truly sustainable GHG CaT by surveying concepts of justice and proposing a comprehensive set of justice criteria for the design of GHG CaT which can be used to evaluate program design at an early stage of development as well as guide structural reviews of existing GHG CaT. Based on these criteria, the current design of the NZ ETS is evaluated. The analysis reveals that the NZ ETS so far has suffered from major design flaws. While there are promising signs that the scheme will become fairer in the near future, there is still scope for improvement for it to fully comply with ambitious and comprehensive sustainability criteria. [ABSTRACT FROM AUTHOR]

Climate change mitigation is a common topical issue in contemporary times at global, regional and country-specific levels. It requires the formulation and implementation of national regulatory and policy regimes in different countries. At a country-specific level, this article provides a critique of New Zealand's climate policy, focusing on its frameworks for addressing emissions from the energy and agricultural sectors. The analysis is anchored on identified issues in two key areas – the restriction of offshore petroleum production and the treatment of agricultural sector emissions. For the energy sector, we argue that the ban on new offshore oil exploration permits does not represent an optimal policy measure if onshore petroleum activities can potentially increase emissions in the country. This is, at best, a form of carbon leakage. The likelihood of shifting offshore operations to other jurisdictions with weaker regulatory regimes can also lead to carbon leakage. For agricultural sector emissions, the changes to the country's emissions trading scheme would start pricing agricultural sector emissions, which had been hitherto exempted. This addition is however weak, as the law will likely cover only 5% of agricultural emissions, leaving 95% uncovered. This seems to undercut the ultimate objective of net-zero emissions reduction. Our analysis suggests the need to entrench a well-considered stringent regulatory regime that incentivises large-scale emissions reduction, especially in the highest emitting sectors of the New Zealand economy – agriculture and energy. [ABSTRACT FROM AUTHOR]

Our study examines the drivers of tight budgetary control in carbon management in the context of climate change regulation. Using the setting of New Zealand Emissions Trading Scheme (ETS), our study explores how firms manage their carbon performance using carbon‐focused budgetary control. Based on a survey data from New Zealand firms, including both those with and those without an ETS compliance obligations, our results suggest that economic and regulatory environmental pressures, the level of proactiveness of emissions management strategy, the level of integration of carbon issues in strategic and operational processes and the perceived importance of carbon issues are the significant drivers of tight carbon‐focused budgetary control. [ABSTRACT FROM AUTHOR]

The New Zealand Emissions Trading Scheme (NZ ETS) broke new ground in ETS design. Drawing from analysis of core policy documentation, this paper examines the rationale, outcomes, and outlook for three key innovations – broad sectoral coverage with some upstream points of obligation, the absence of a hard limit on system emissions, and a two-part cost containment mechanism – following the first decade of operation. It also provides comparative assessment with the European Union Emissions Trading System and California Cap-and-Trade Program. The NZ ETS was designed around the principle of least-cost compliance with international responsibility targets and a core assumption that the Kyoto Protocol emissions market would converge toward an efficient emission price aligned with rising global mitigation ambition. This assumption did not become a reality. As a result, the NZ ETS has produced a functional cross-sector trading market but little incentive for domestic mitigation to date. In late 2019, amendments were introduced to reform sectoral coverage, unit supply, and price management features so the system will better support New Zealand's targets under the 2015 Paris Agreement and 2019 Zero Carbon Act. However, substantial technical and political challenges remain to set near-term domestic mitigation ambition, phase out industrial free allocation, determine the mitigation contribution from the land sector, and design the agricultural emissions pricing regime. The evolution of the NZ ETS, relative to other systems and in response to national circumstances, offers insights that can inform the future development of emissions trading globally. Key policy insights Since 2008, the NZ ETS has successfully pioneered broad cross-sector emissions trading with upstream energy-sector obligations and deforestation obligations with afforestation crediting. Pricing of biogenic agricultural emissions is anticipated from 2025. The government's failure to adapt unit supply and cost containment mechanisms to changing market conditions has undermined incentives for domestic mitigation, resulted in a large bank of participant-held emission units, and subjected the market to long-term policy uncertainty. A cap on auctioning and new price management features will better equip the NZ ETS to support New Zealand's domestic emission reduction targets, but strategic questions remain about the future role of the land sector. [ABSTRACT FROM AUTHOR]

Despite extensive debate on the influence of discourse on environmental politics, research has yet fully to reveal how discursive processes affect policy change on issues like climate change. Discourse‐related approaches are also often criticised for critiquing current policy situations but paying limited attention to utilising communication studies to enable policy change. This article explores how narrative policy analysis—a linguistic technique for analysing policy issues where uncertainty and complexity have bred polarisation—can be utilised to recast disputes over climate policy in ways that facilitate compromise and policy change. As a focus, we examine disputes surrounding the New Zealand Emissions Trading Scheme, drawing on elite interviews and documentary analysis to analyse contrasting narratives about the scheme's effectiveness in reducing greenhouse‐gas emissions. The first portrays New Zealand as a trade‐exposed country that makes only minor contributions to global emissions to defend cautious and low‐cost policy. Its rival advocates stronger domestic action even if this entails higher costs. Mapping the contentions, assumptions, and characterisations in these narratives, combined with analysis of recent policy developments, reveal important insights on how narrative policy analysis can be used to enhance understandings of policy change, particularly, the difficulties of attacking opponents' "anchoring narratives"; how analysing minor narratives and differences in narrative alliances can assist in overcoming barriers to policy change; how narrative changes and "narrative diplomacy" prepare the ground for policy change; and the importance of examining issues neglected in polarised debates on climate policy. [ABSTRACT FROM AUTHOR]

The Emission Trading Scheme (ETS) is an essential instrument tightly interconnected with the stock and energy markets. This study innovatively incorporates the ETS, stock, and energy markets into an integrated framework to model the return and volatility spillovers. We utilize a dynamic Time-Varying AutoRegressive procedure grounded in both the temporal and frequency domains. Our findings certify time-varying effects in both return and volatility spillovers. Remarkably, extreme events such as the COVID-19 pandemic and New Zealand's ETS-led policies have contributed substantially to these spillovers. Specifically, for return spillovers, the price movements of the stock and the crude oil markets are distinctly influenced by the ETS and electricity markets. On the other hand, volatility spillovers in stock and energy markets are predominantly dominated by the ETS. Furthermore, return and volatility spillovers exhibit substantial heterogeneity across different frequencies, with long-term effects making up the most considerable portion of cross-market spillovers. These findings help gain a deeper understanding of dynamic feedback effects and offer valuable implications for policymakers and market participants. [ABSTRACT FROM AUTHOR]

We use the New Zealand emissions trading scheme to explore how diffusion and learning from other emissions trading systems can explain the adoption, design, and revision of climate policy. Drawing on secondary documents and interviews with politicians, government officials, business leaders, and independent commentators, we argue for further investigation of how interactions between international and domestic factors shape the design of climate policy, and for deeper probing of structural and shorter-term domestic imperatives, to avoid misreading the extent and nature of international diffusion influences. We particularly stress the importance of distinguishing analytically between diffusion interactions motivated by learning between jurisdictions and scrutiny aimed at avoiding material disadvantages as a result of miscalculations in climate policy design. Finally, we argue for greater attention to the temporal dimensions of climate policy development in explanations of how diffusion and domestic influences may change during policy adoption, design, and revision. [ABSTRACT FROM AUTHOR]

While scholars express a range of concerns about the use of private property to manage natural resources, an enduring counter-tradition within our idea of private property provides a principled basis for ameliorating or avoiding these concerns. This countertradition, the social obligation norm of property, recognises the intrinsically social function of private property and that private property can impose obligations in addition to conferring entitlements. The New Zealand quota management system for fish and New Zealand Emission Trading Scheme provide illustrations of the presence of this counter-tradition within our law. The counter-tradition also provides a way in which the concerns regarding private property in this space can be addressed, while maintaining the behaviour changing benefits private property offers. [ABSTRACT FROM AUTHOR]

The Paris Agreement asserts that greenhouse gas emission pathways should be consistent with holding the increase in global temperature below 1.5 °C, or 2 °C above pre-industrial levels. The purpose of this paper is to assess the economic impact of this agreement on the cattle and food product sectors of New Zealand. We used a general equilibrium approach to evaluate the economic impacts, and the Global Timber Model to estimate forestry carbon sequestration. We simulated eight scenarios where we allow accounting/not accounting for sequestration, pricing/not pricing agricultural emissions, and linking/not linking the New Zealand Emissions Trading Scheme (ETS) with the European Union ETS. We found that significant negative impacts occur if sequestration is not accounted, the ETS remains unlinked and agriculture is priced. Competitiveness, in turn, is not significantly affected if sequestration is accounted, regardless of the linking scheme of the ETS. [ABSTRACT FROM AUTHOR]

The global community has agreed to the concept of reducing greenhouse gases emissions through forest sequestration in the post-2020 international climate change regulatory framework. While the concept is included in the December 2015 Paris Agreement, significant legal questions remain about how domestic legal systems will adapt the necessary regulatory frameworks to recognise and protect forest carbon rights, which are fundamental to the operation of a forest sequestration scheme. This article analysis some of the world's first forest carbon regulatory frameworks, in Australia and New Zealand. Drawing lessons from the establishment and development of these regulatory frameworks, this article proposes principles upon which policymakers and others can rely in developing forest carbon regulatory frameworks in the post-Paris Agreement context. [ABSTRACT FROM AUTHOR]

The article examines the policies needed by New Zealand to transition to a low-carbon economy, along with the proposed review of the emissions trading scheme and analysis of the country's Intended Nationally Determined Contribution in relation to the 2015 Paris Agreement to combat climate change.

Emission trading schemes (ETS) have emerged as a popular climate policy measure and are increasingly advocated as policy instruments to support the transition to a green economy. Using complementary analytical methods, this research investigated the institutional developments and complexities of the New Zealand Emissions Trading Scheme (NZ ETS). It focuses on (1) institutional experience and administrative capacity, and (2) political acceptance during formation, design, implementation, and review. The research answer questions concerning critical conditions that have affected the institutional feasibility of the NZ ETS and the trade-offs in achieving and maintaining institutional feasibility. The experience in New Zealand has demonstrated that bipartisan political support and obliged participant acceptance for an ETS can be achieved and the administrative burden can be kept low through an inclusive consultation process and particular aspects of design to provide more certainty about costs. However, this institutional feasibility has also been a trade-off with other important aspects such as environmental effectiveness, predictability, and legitimacy, posing risks to maintaining political acceptance of the policy design and achieving the longer term objectives of transitioning to a green economy. [ABSTRACT FROM AUTHOR]

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 For further resources related to this article, please visit the . [ABSTRACT FROM AUTHOR]

This study aims to explore the co-movement effect of returns among the four most representative global carbon emissions trading schemes (ETSs) and the correlations and time lag characteristics of returns in four ETSs. Specifically, this study examines the price volatility and return coherence of ETS of the European Union (EU), New Zealand, South Korea, and Shenzhen, China from 2013 to 2019 using the wavelet analysis method. Firstly, from the temporal perspective, the trading prices of the four ETSs demonstrate certain volatility characteristics, that is, more medium- and long-term (over five trading days) but less short-term fluctuations. Secondly, because of the different starting stages and maturity levels of the four major ETSs, the wavelet analysis indicates that the linkage between ETS trading rates varies across frequencies and evolves and shows dynamic characteristics from two angles of time and frequency domains. The findings also show the principle of mutual influence or linkage between global ETSs, which is helpful for the establishment of ETS and can improve the awareness of ETS risk prevention among market participants to avoid losses. • This study explores the linkage effect of returns among global major ETSs. • Correlations and time lag of returns in four ETS markets were explored. • Co-movement between ETSs' returns varies across frequencies and evolves over time. • The four ETSs have large price fluctuations in the medium- and long-term. • Shenzhen, China ETS has no significant influence on EU, New Zealand and Korea ETSs. [ABSTRACT FROM AUTHOR]

Carbon sequestered through increased forest biomass provides a low cost means to curb emissions and has become a major focus of New Zealand's Emissions Trading Scheme. We present a forest planning optimisation model where land use is governed by forest owners maximising the returns to both timber harvest and carbon sequestration. By varying carbon prices, we model efficient trade-offs between the two forest activities along a modified production possibility frontier for four distinct wood supply regions in New Zealand. Results show that while more productive regions such as the Central North Island ( CNI) and Northland have a greater capacity as a carbon sink, it is the less productive regions that have a comparative advantage in carbon sequestration in terms of a lower cost of wood production revenue foregone. However, moderate increases in carbon uptake can be achieved in the CNI at low opportunity cost by subtle changes in forestry management. The implication for policy-makers is that initial increases in carbon sequestration will be achieved at the lowest cost to society by favouring high volume timber production in some productive woodland areas and/or by more carbon farming in less productive areas. [ABSTRACT FROM AUTHOR]