Formats and related files
We would like to thank Steve Rylands, Kevin Guerin and Joanna Smith at Treasury and Billy Pizer at Resources for the Future for useful comments. This work draws on Motu’s FRST funded project ‘Land use, climate change and Kyoto’, and involves indirect input from Landcare, Forest Research and AgResearch. The authors are responsible for all opinions expressed and all errors and omissions that remain.
This document was commissioned by the New Zealand Treasury. However, the views, opinions, findings and conclusions or recommendations expressed in it are strictly those of the author(s), do not necessarily represent and should not be reported as those of the New Zealand Treasury. The New Zealand Treasury takes no responsibility for any errors, omissions in, or for the correctness of, the information contained in this Paper.
- Joanna Hendy is the primary author of section 6.2 but does not take responsibility for the document as a whole.
Table of Contents
- Executive Summary
- 1 Introduction
- 1.3 Basic design of taxes and emissions trading systems
- 2 Design issues common to taxes and permits
- 2.4 Incidence of costs
- 3 What are fundamental and unavoidable differences between taxes and emissions trading?
- 3.2 Environmental vs. economic risk
- The case of New Zealand with an international regulation system
- Without a functioning international permit market
- 3.2.2 When benefit and cost uncertainty are correlated
- 3.2.3 Environmental vs economic risk: summary
- 3.3 Allocation of risks and incentives to respond to risk
- 3.3.2 Policy design and optimal exogenous risk allocation
- 3.3.3 Strategic incentives
- 4 Instrument-specific design issues
- 4.4 Recommendations for defining permits
- 4.5 Allocating permits
- 4.6 Transaction costs, efficiency and incidence of costs
- 4.7 Design issues specific to taxes
- 5 Options for mixed tax-permit systems
- 6 Future directions: emissions and sequestration from land use and other greenhouse gases
- 6.3 Agricultural methane
- 6.4 Nitrous oxide emissions
- 6.5 Other greenhouse gases