Articles

In this article we look at how a price on agricultural emissions that is lower than that paid elsewhere in the economy imposes a cost on New Zealand citizens that could reach an average of $1,000 per person by 2030.

New Zealand has a price on greenhouse gas (GHG) emissions, primarily carbon dioxide emissions. This pricing mechanism is the essence of the Emissions Trading Scheme (ETS). The scheme will over time, given a cap on total emissions, lead to lower gross emissions and lower net emissions (gross emissions less sequestration by forestry).

The New Zealand Climate Change Commission has released its final report; Ināia tonu nei: a low emissions future. The report is over 400 pages, with about the same amount again in the form of supporting material. Overall the results from the analysis are very similar to those in the draft report, albeit with some significant changes regarding the rate of uptake of electric vehicles, the output of emission-intensive industries and emissions reduction options in pastoral farming.

At Infometrics we are often amazed, even annoyed, at ill-considered policy proposals that are targeted at solving a single issue, without recognising the law of unintended consequences – both positive and negative.

In 2016 a large group of international economists including four former Federal Reserve Chairs and 27 Nobel laureates made a number of recommendations on climate policy. At Infometrics we have explored the effects of a ‘tax and rebate’ policy with a detailed model of the New Zealand economy.

There is much coverage in the media of housing affordability, frequently expressed as the ratio of median house price to median income. This measure can be extremely misleading as it takes no account of the actual cost of servicing a mortgage, which is much more relevant to most buyers.

The Oresund bridge between Copenhagen in Denmark and Malmo in Sweden, a truly transformational (€4 billion) transport project that led to economic benefits much greater than would be estimated using standard cost-benefit analysis. Although something on that scale is unlikely in New Zealand, it does raise the question of whether investing in large transport infrastructure projects could deliver benefits additional to those estimated using the NZ Transport Agency’s Economic Evaluation Manual.