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Preliminary Evidence on Responses to the New Zealand Forestry Emissions Trading Scheme

Author

Listed:
  • Eric Karpas

    (Stanford University)

  • Suzi Kerr

    (Motu Economic and Public Policy Research)

Abstract

New Zealand is the first country to implement a Greenhouse Gas Emissions Trading Scheme (ETS) that includes a forestry component as part of its contribution to global climate mitigation and as a strategy for compliance with the international climate change agreement the Kyoto Protocol. The goal of this paper is to provide information o forestry’s role in the New Zealand ETS such that a foreign policymaker will be able to understand the intricacies and issues of the New Zealand system and be able to apply this knowledge to the design of his or her own ETS. This paper also aims to provide useful documentation of the system as it stands in 2010 for the New Zealand Parliament to use in future reviews of the system. The paper first provides a brief outline of the role of forestry in New Zealand’s ETS, including the reasons for its inclusion in the greater system and the rules by which forestry operates within the system. This paper then analyses these rules, indicating the reasons behind the inclusion of certain provisions where the reasoning may not be immediately clear. Finally, this paper provides both quantitative and qualitative data on how well the system is working so far, whether the system is operating as predicted, and why any discrepancies between predicted and actual outcomes arise.

Suggested Citation

  • Eric Karpas & Suzi Kerr, 2011. "Preliminary Evidence on Responses to the New Zealand Forestry Emissions Trading Scheme," Working Papers 11_09, Motu Economic and Public Policy Research.
    • Handle: RePEc:mtu:wpaper:11_09
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    File URL: https://motu-www.motu.org.nz/wpapers/11_09.pdf
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    References listed on IDEAS

    as
    1. Suzi Kerr & Emma Brunton & Ralph Chapman, 2004. "Policy to Encourage Carbon Sequestration in Plantation Forests," Working Papers 04_05, Motu Economic and Public Policy Research.
    2. Suzi Kerr & Catherine Leining, 2003. "Joint Implementation in Climate Change Policy," Working Papers 03_04, Motu Economic and Public Policy Research.
    3. Olssen, Alex & Kerr, Suzi, 2011. "Modelling Land Use in Rural New Zealand," 2011 Conference, August 25-26, 2011, Nelson, New Zealand 115413, New Zealand Agricultural and Resource Economics Society.
    4. van Benthem, Arthur A. & Kerr, Suzi, 2010. "Optimizing Voluntary Deforestation Policy in the Face of Adverse Selection and Costly Transfers," 2010 Conference, August 26-27, 2010, Nelson, New Zealand 96813, New Zealand Agricultural and Resource Economics Society.
    5. Nan Jiang & Basil Sharp & Mingyue Sheng, 2009. "New Zealand's emissions trading scheme," New Zealand Economic Papers, Taylor & Francis Journals, vol. 43(1), pages 69-79.
    6. Suzi Kerr & Andrew Sweet, 2008. "Inclusion of Agriculture and Forestry in a Domestic Emissions Trading Scheme: New Zealand's Experience to Date," Working Papers 08_04, Motu Economic and Public Policy Research.
    7. Andrew Coleman, 2011. "Financial Contracts and the Management of Carbon Emissions in Small Scale Plantation Forests," Working Papers 11_04, Motu Economic and Public Policy Research.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Hale, Todd & Kahui, Viktoria & Farhat, Daniel, 2015. "A modified production possibility frontier for efficient forestry management under the New Zealand Emissions Trading Scheme," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(1), January.
    2. Matthew Ranson & Robert N. Stavins, 2012. "Post-Durban Climate Policy Architecture Based on Linkage of Cap-and-Trade Systems," NBER Working Papers 18140, National Bureau of Economic Research, Inc.
    3. Sandra Cortés Acosta & Arthur Grimes & Catherine Leining, 2020. "Decision trees: Forestry in the New Zealand Emissions Trading Scheme post-2020," Working Papers 20_11, Motu Economic and Public Policy Research.
    4. 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.
    5. Jessika Richter & Luis Mundaca, 2015. "Achieving and maintaining institutional feasibility in emissions trading: the case of New Zealand," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 20(8), pages 1487-1509, December.
    6. Andrew Coleman, 2011. "Financial Contracts and the Management of Carbon Emissions in Small Scale Plantation Forests," Working Papers 11_04, Motu Economic and Public Policy Research.

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    More about this item

    Keywords

    Forestry; emissions trading; carbon trading; climate change; climate change mitigation; government policy; New Zealand;
    All these keywords.

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • 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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