Emissions trading

Trading systems use price to encourage polluters to reduce their environmental impact. Regulators fix the total amount of pollution to a level that will achieve an environmental target and introduce a price on pollution. Polluters use their own information to decide how much they wish to reduce pollution. This can lead to environmental benefits at a lower cost. 

If you are interested in getting an overview of the New Zealand Emission Trading Scheme a resource page is here.

How it works 2019

Motu’s project, Shaping New Zealand’s Low-Emission Future, includes important new research to create a comprehensive, authoritative, independent and up-to-date history of the New Zealand Emission Trading Scheme (ETS).

Motu has documented how the ETS was implemented and identified lessons learned to date. We have completed basic research on two questions:

  • How can New Zealand best respond to uncertainty in the rewards for mitigation investment?
  • How can New Zealand link its ETS to developing countries to fund effective mitigation outside New Zealand?

Motu’s other work on emissions trading focuses on New Zealand's forestry and agriculture, but also considers electricity markets and wider environmental modelling. 

In Motu’s environmental trading game, participants act as farmers in a nutrient (or emissions) trading system, though the game can be adapted for any other environmental problem. It is suitable for use with any group interested in better understanding these issues, both in an educational or professional setting (and comes with non-technical instructions).

Working Paper