Here you'll find all the information about our past public policy seminars, including audio downloads, copies of the slides and papers by the authors.
Dr Kerry Papps, Senior Lecturer in Economics, University of Bath
12.30pm-2pm, Thursday 7 December, RHLT3, Rutherford House, 33 Bunny Street, Wellington (NOTE CHANGE IN VENUE)
There has been a resurgence in the popularity and acceptance of the minimum wage as a labour market policy tool in Europe in recent years. The UK introduced a new “National Living Wage” for those aged 25 and over in 2016 and Germany established a national minimum wage for the first time in 2015. Kerry will talk about recent developments regarding minimum wages in Europe and the ongoing policy debate on the topic. He will also talk about the empirical evidence that he and other researchers have uncovered on the effects of minimum wages on employment, profits, prices and other aspects of how the labour market functions.
BIO: Kerry Papps joined the University of Bath in 2011 and became a senior lecturer in 2013. He undertook his undergraduate education in New Zealand and worked for the New Zealand Department of Labour before completing a PhD at Cornell University, where he held a Fulbright Scholarship. From 2007-2010 he was a research fellow at Nuffield College, Oxford and in 2011 was a visiting assistant professor at Cornell University. He has held short-term research posts at Motu Economics and Public Policy and Imperial College London. Kerry is a research fellow of the IZA, Bonn and a fellow of the Higher Education Academy and he is an associate member of the Centre for the Analysis of Social Policy at Bath. He has been commissioned to provide research for the World Bank and the Low Pay Commission.
Kerry's slides are here.
Speaker: Professor Petra Moser, Associate Professor of Economics, Leonard N. Stern School of Business, New York University
12.30pm-2pm, Tuesday 28 November, GBLT2, VUW Pipitea Campus, Behind Old Government House, Lambton Quay
Bio: Petra Moser is an Associate Professor of Economics at NYU Stern. Her research combines methods from economic history and applied microeconomics to examine the determinants of creativity and innovation. She studies the behaviour of inventors, artists, and writers from the 19th century to today to figure out what makes people creative, what encourages firms to take the risks that are inherent in innovation, and what types of institutions encourage people to do their best work. Prior to joining NYU Stern, Professor Moser taught at Stanford University and the Massachusetts Institute of Technology. She was an undergraduate student at the University of Tübingen in Germany and a Fulbright Student at the University of Missouri-Columbia. She received her M.A. in International Relations from Yale University and holds a Ph.D. in Economics from the University of California, Berkeley.
Petra's slides are here.
Speaker: Professor Richard Harris, Deputy Dean (Research), Professor of Economics in the Business School at Durham University
12.30-2pm, Monday 13 November, RHLT2, Rutherford House, 33 Bunny Street, Wellington
The seminar will provide an update of the current state of the negotiations between the UK and EU on Brexit, some seven months into a two year period of negotiation following the UK’s triggering of Article 50 (intention to leave the EU by March 2019). The main economic issues facing both parties will be outlined with a focus on how the UK can accommodate a likely ‘hard Brexit’.
Bio: Before joining Durham University Business School in September 2012, Richard held the positions of Alec Cairncross Professor of Applied Economics and Director of the Centre for Public Policy for Regions at Glasgow University. He previously worked at the Universities of Newcastle upon Tyne, Durham and Portsmouth in the UK and Waikato in New Zealand. He holds degrees from the Universities of Belfast, Lancaster and Kent.
He has published some 151 journal articles, book chapters, and books and undertaken a significant amount of public policy research, including extensive work for UK Trade & Investment (UKTI) involving acting as an External Advisor on Trade Development Activities and the Asia Task Force project. In 2012-13 he was a member of the BIS/Foresight Lead Expert Group that reported in October 2013 on ‘The Future of Manufacturing in the UK’; and a Special Advisor to the UK Parliamentary Commission on Banking Standards. Currently he is a member of the ESRC Administrative Data Research Network (ADRN) Project Approvals Panel.
Prof Harris's slides are available here.
Speaker: Geoff Bascand, Deputy Governor and Head of Operations, Reserve Bank of New Zealand
12 – 1.30pm, Monday 17 July, Royal Society of New Zealand, 11 Turnbull St, Thorndon, Wellington
What we owe the rest of the world - New Zealand's net foreign liabilities - reached nearly 85 percent of GDP in 2009. Just eight years later, New Zealand’s net foreign liabilities now sit just below 60 percent - the lowest level since the late 1980s. This speech will address the factors that have driven this stark improvement in our external account, and ask how sustainable it might be given the Bank’s current economic outlook. A copy of Geoff's speech can be found at the RBNZ website.
Bio: Geoff Bascand is Deputy Governor and Head of Operations at the Reserve Bank of New Zealand. He has been appointed Head of Financial Stability and Deputy Chief Executive of the Reserve Bank and will take up the role on 27 September.
Prior to joining the Bank in 2013, Geoff was Government Statistician and Chief Executive, Statistics New Zealand. He previously worked in senior management roles in the Department of Labour and the New Zealand Treasury, and was a staff economist at the International Monetary Fund.
Speaker: Elizabeth Longworth, DRR Consultant, former Director of the United Nations Office on Disaster Risk Reduction
Monday 19 June
Over the past year, New Zealand has suffered floods, drought, cyclonic winds, wild fires and recurring earthquakes. As a country heavily exposed to natural hazards, New Zealand’s prognosis is for an ever-increasing tally of disaster loss and damage.
Globally, the accelerating trend in disaster losses poses a critical challenge, undermining the capacity of many countries to make the capital investments and social expenditures necessary for their sustainable development:
Currently, New Zealand is among the many countries that emphasise managing the disaster, rather than reducing the risk. It has been estimated that an annual global investment of USD 6 billion in disaster risk management strategies would generate USD 360 billion worth of benefits in terms of reducing risk. On that basis, New Zealand might expect a return on investment of 60 times for every dollar spent on reducing disaster risk. In terms of creating shared value, investment in disaster risk management has co-benefits of strengthening resilience, competitiveness and sustainability.
The seminar will ask how New Zealand could capitalise on such a value proposition by taking a more prospective approach to disaster risk. This would require a significant and strategic shift in thinking and effort. The state of New Zealand’s ‘risk governance’ will be critical.
BIO: Elizabeth is an expert on disaster risk reduction (DRR) and building resilience to natural hazards, with eleven years in multilateral organisations leading economic and social development programmes, including DRR. From 2012-14, Elizabeth was The Director of the United Nations Office for Disaster Risk Reduction, called UNISDR, in Geneva. UNISDR produces the UN Global Assessment Report on DRR and is an authority on risk assessment, risk management, setting risk indicators, and disaster preparedness and recovery.
She joined UNISDR to manage the multi-stakeholder process of global consultations and preparations for the new fifteen year international agreement on DRR (the 2015 Sendai Framework of Action). This sets the international agenda on how to prevent disaster losses and damage, and serves as a blueprint for regional, national and local resilience strategies and actions. Elizabeth chaired the United Nations High Level Programme Committee on DRR and Resilience, comprising 29 UN agencies. The Committee was responsible for developing the UN Action Plan on building resilience to and preventing loss of life, assets and livelihoods from natural disasters. She was also engaged in the UN process to develop the Sustainable Development Goals (SDGs) and on the interaction between DRR and climate change.
Prior to joining UNISDR in Geneva, from 2003-12 Elizabeth held several senior leadership and management positions at UNESCO in Paris, the United Nations Organisation for Education, Culture, the Sciences and Communication. Before leaving NZ, Elizabeth was the Director of growth and innovation strategies for the ICT Sector at New Zealand Trade and Enterprise (formerly Industry New Zealand) and was in-house counsel at The Reserve Bank.
Speaker: Andrew Coleman is an economist who works at Otago University and is an ex Senior Fellow at Motu.
Wednesday 12 April 2017
New Zealand currently has one of the most distortionary tax environments for housing markets of any country in the OECD. Prior to 1989, owner-occupied housing and savings placed in sanctioned retirement funds were taxed on an expenditure basis, whereas other assets were taxed on an income basis. This meant there was a large tax wedge between the taxation of housing and retirement funds, on one hand, and other assets on the other. After 1989, the wedge between retirement assets and other assets was closed but a large wedge between retirement funds and owner-occupied housing was opened. For the last quarter of a century, NZ’s tax environment has imposed costs on current and future generations of young people because of the way it taxes housing and other assets. This presentation will review the way New Zealand’s tax system alters the incentives to purchase property. Its purpose is to provide a wider perspective on the relationships between tax and housing markets.
BIO: Andrew Coleman is an economist who works part-time as a lecturer in the Economics Department at the University of Otago, and part-time as a policy analyst in Wellington, most recently at the New Zealand Treasury and Motu Economic and Public Policy Research. In 2010 he was a member of New Zealand's Saving Working Group. Andrew currently researches inter-generational economic issues, with a particular focus on New Zealand Superannuation, housing, and taxation. In recent work, he develops dynamic heterogeneous agent models to analyse the relationships between taxes, and urban land markets. His current work is focused on how the tax system affects the way transport infrastructure is capitalised into land values. He is also using Otago University's 1000Minds software to investigate what New Zealanders want from government pension programmes.
This seminar is held in association with National Science Challenge 11: Building Better Homes, Towns and Cities.
Andrew's slides are here.
Speaker: John Gibson is Professor in the Department of Economics, University of Waikato
12.30-2pm, Thursday 1 December, Lecture Theatre 4, Old Government Buildings, 55 Lambton Quay
Demand studies increasingly use household survey data on budget shares, which vary with quantity, price, and quality. If demand models are estimated without allowing for responses on both the quality and quantity margins, effects of price on the quantity demanded are overstated. Some price rises may be mandated by policy makers so as to lower intake of unhealthy items like sugar-sweetened soft drinks, so a failure to correctly disentangle quality and quantity responses may result in disappointed policy makers.
In this talk, the origins and prevalence of this modelling problem are described and some possible solutions are discussed. While there are implications of these issues for current policy discussions in New Zealand the empirical evidence that is presented is drawn from elsewhere.
John Gibson is Professor in the Department of Economics, University of Waikato. He taught previously at the University of Canterbury, and the Economics Department and Center for Development Economics at Williams College. Since receiving his Ph.D. from Stanford University he has worked in the following countries: Cambodia, China, Fiji, India, Papua New Guinea, Russia, Samoa, Solomon Islands, Thailand, Tonga, Vanuatu, and Vietnam. His recent publications have appeared in the Economic Journal, Review of Economics and Statistics, Journal of Development Economics, and World Bank Economic Review.
John's slides are here.
Speaker: Kathleen Newland, Senior Fellow and Co-Founder of the Migration Policy Institute, USA. 12.30-2pm, Tuesday 8 November, 12.30-2pm, Lecture Theatre 1, Old Government Buildings, 55 Lambton Quay
With migrant maritime arrivals the subject of major policy and public focus in the Mediterranean, Australia, and elsewhere, Ms Newland will review the policy responses to irregular maritime arrivals at regional, national, and international levels. While policy discussions once typically focused on rescue at sea, those today are more likely to be framed in terms of interception designed to address concerns of border protection, national security, and organized crime. The current, central dilemma is how to reconcile these concerns with international legal obligations and regional or global burden-sharing. Ms Newland will examine the state of the policy discussion on these and other salient issues surrounding irregular maritime migration, including case studies of recent developments in the major global hotspots.
Kathleen Newland is co-founder and a Senior Fellow at the Migration Policy Institute, where she works on refugee protection issues, the relationship between migration and economic development, and the governance of international migration. She is an Overseer of the International Rescue Committee, and sits on the Boards of Kids in Need of Defense (KIND), the Stimson Center, and USA for UNHCR as well as MPI. She is also a member of the International Organization for Migration’s Migration Advisory Board. She is Chair Emerita of the Women’s Refugee Commission.
Kathleen's slides are here.
Monday 10 October, 12.30-2pm, Robb Lecture Theatre, University of Auckland (Grafton Campus), 85 Park Rd.
Frank Jotzo (Australian National University) and Andy Philpott (University of Auckland’s Electric Power Optimization Centre) will discuss how the transition away from coal in Australia’s electricity system could be managed and the challenges of getting to a 100% renewable electricity market.
Frank Jotzo is Associate Professor at and Deputy Director of the ANU Crawford School of Public Policy and Director of the Centre for Climate Economics and Policy. His research focuses on policy relevant aspects of climate change, energy, and broader issues of environment, development and economic reform. He is a frequent contributor to Australian and international policy debates. Frank is a Lead Author of the Intergovernmental Panel on Climate Change 5th Assessment Report, and is an Associate Editor of the journals Climate Policy and Australian Journal of Agricultural and Resource Economics. He currently leads a collaborative research program on market mechanisms for China’s climate and energy policy and is a member of advisory bodies on climate change to the governments of South Australia and the Australian Capital Territory.
Andy Philpott is Professor of Engineering at the University of Auckland and Director of the Electric Power Optimization Centre. He has a long research career in Operations Research and its application to problems in business and industry. Andy has worked over a broad range of industrial problems, and has particular expertise in modelling and optimising decision making under uncertainty. His most recent work has been applying stochastic optimisation methods to electricity markets. He is Leader of the Smart Services Portfolio of the Science for Technological Innovation National Science Challenge.
Speaker: Aaron Smith, Professor of Agricultural and Resource Economics, University of California, Davis.
12.30-2pm, Friday 19 February, Adam Auditorium, City Gallery, Civic Square, Wellington
Worldwide, the transportation sector burns too much fossil fuel because motorists do not pay for their effects on the environment. In particular, fossil fuels generate carbon dioxide emissions that contribute to global climate change. Many countries require that renewable fuels such as ethanol and biodiesel make up a portion of the transportation fuel supply on the grounds that these fuels generate fewer carbon emissions. The largest such policy exists in the United States. This presentation will explain how the US policy is implemented, assess how well it is working, critique government analysis of the costs and benefits of the policy, and draw lessons for New Zealand policy.
Speaker: Richard Morgenstern, Senior Fellow, Resources for the Future
12.30-2pm, Thursday 19 November, Adam Auditorium, City Gallery, Civic Square, Wellington
Numerous countries and regions around the globe are using a carbon price to regulate carbon dioxide emissions. Many experts believe that such a policy is economically efficient, growth-enhancing, and consistent with long-term mitigation goals.
China recently started seven carbon cap-and-trade pilot programs in order to inform the development of a future national cap-and-trade market. In this seminar, Dr Morgenstern will assess the design of three of the longer-running cap and-trade pilot programs in Guangdong, Shanghai and Shenzhen. He will discuss his recommendations to improve the design of these three pilots. His paper on this topic is here.
Speaker: Dr Max Nathan, Deputy Director, What Works Centre for Local Economic Growth, London School of Economics
Monday 27 July, 12.30pm, City Gallery, Civic Square, Wellington
Max will give an overview of the UK’s What Works Centre for Local Economic Growth, and talk through the issues, opportunities and challenges the Centre has faced to date.
The What Works Centre for Local Economic Growth (WWG) was set up in October 2013 as one of the seven Centre’s that comprise the UK’s What Works Network. The WWG’s aim is to analyse which policies are most effective in supporting and increasing local economic growth, and to support policymakers to implement and evaluate effective interventions.
Understanding ‘what works’ is a question that continues to both perplex and challenge policy makers and researchers. It is even more important in the UK at the present time as national government is faced with slower growth and tighter budgets, and local decision makers take on new powers and freedoms for economic development. Careful research and evaluation have a crucial role to play in exploring the evidence base, and increasing the effectiveness of policy making meaning that local governments have a deeper understanding of what works.
The Centre’s key activities are:
The What Works Centre is a collaboration between the London School of Economics and Political Science (LSE), the Centre for Cities think tank and Arup, and is funded by the Economic & Social Research Council, the UK’s Department of Communities and Local Government and the UK Department of Business Innovation and Skills.
Speaker: Dr Joop Hartog, Emeritus Professor of Economics, Amsterdam School of Economics
While it is obvious that schooling is an investment with uncertain pay-offs, the relevant literature is scant and ongoing research is modest. Based on his recently published and ongoing work, Dr Hartog will document international evidence on the magnitude of risk, survey theory, and present estimates of risk compensation in market wages for several countries, both for employer risk and employee risk. Dr Hartog will also discuss the link with issues in economic policies.
Speaker: Arik Levinson, Professor, Georgetown University and Research Fellow at the National Bureau of Economic Research, U.S.A.
Construction codes that regulate the energy-efficiency of new buildings have been a centerpiece of US environmental policy for 40 years. California’s 1970’s-era building codes were projected to reduce residential energy use by 80 percent. Arik Levinson discussed how effective they have been. Arik Levinson is a professor in the Economics Department of Georgetown University in the U.S.A., where he teaches microeconomics, public finance and environmental economics. His recent work has focused on environmental policy, including analysis of energy efficiency regulations, and research into the efficacy of linking international environmental agreements to trade policy. Arik is also a Research Associate at the National Bureau of Economic Research, and has served as a co-Editor of the Journal of Environmental Economics and Management, a member of the EPA’s Environmental Economics Advisory Committee, a Senior Economist at the White House Council of Economic Advisors, and a Gilbert White Fellow at Resources for the Future. Arik also appeared on the radioshow Freakanomics on 5 February talking about this issue.
You can listen to Arik’s talk on youtube.
Speaker Frank Jotzo, Associate Professor and Public Policy Fellow, Crawford School of Public Policy, Australian National University
Australia’s climate change policy has been through several extreme shifts following changes in government. In this talk Frank Jotzo mapped out political and economic parameters of Australia’s climate policy, discuss key features of those policies, and speculate on how the rollercoaster ride might continue. Frank Jotzo is Associate Professor and Public Policy Fellow at the Australian National University’s Crawford School of Public Policy, where he works on the economics and policy of climate change, energy, and broader issues of environment and development. He was advisor to Australia’s Garnaut Climate Change Review and to Indonesia‘s Ministry of Finance. He currently collaborates with Chinese organisations on research on climate and energy policies, and advises the World Bank on carbon markets. He is also a Lead Author of the Fifth Assessment Report by the Intergovernmental Panel on Climate Change.
Speaker Peter Matanle, School of East Asian Studies, University of Sheffield
Peter Matanle is a lecturer at the University of Sheffield’s School of East Asian Studies. Dr. Matanle’s research interests focus on the economic sociology and cultural geography of work in Japan and the United Kingdom. He is the author of several publications in these fields, including Japanese Capitalism and Modernity in a Global Era: Refabricating Lifetime Employment Relations (RoutledgeCurzon, 2003); Perspectives on Work, Employment, and Society in Japan (Palgrave, 2006; co-edited with Wim Lunsing); and “Coming to a City Near You: Learning to Live Beyond Growth in Japan’s Shrinking Regions” (Social Science Japan 13:2, 2010). He is also the founder and general editor of the Electronic Journal of Contemporary Japanese Studies.
Speaker Frank Convery, Senior Fellow, University College Dublin, and Chairman, publicpolicy.ie.
This presentation will review recent developments in European climate policy, notably the European Commission’s proposals for new legally binding emissions targets for greenhouse gas emissions and for renewables, followed by a discussion on how Ireland designed and implemented a carbon tax on greenhouse gas emissions from the non-traded sectors. The presentation will conclude with an assessment of the prospects for implementation of the Commission’s proposals, and the role of small countries in leading some areas of climate policy.
Download Frank’s presentation.
Speaker Nick Hanley, Professor of Economics, University of Stirling
The World Bank uses a measure known as Genuine Savings (comprehensive investment, adjusted net savings) to measure the sustainability of a country’s growth path. However, there is very little empirical testing of this measure. In this presentation, I report results from a unique study which uses data from a 250 time period to test genuine savings as an indicator of future well-being for the UK, the USA and Germany. This work is funded by the Leverhulme Trust.
Speaker Viv Hall, Emeritus Professor of Economics, Victoria University of Wellington, and Motu Affiliate
Has New Zealand’s recent recession been its most severe? Does calling a recession based on two successive quarters of negative real GDP growth provide potentially misleading signals to policy and other decision makers? Have New Zealand’s real GDP and employment cycles been closely associated, and should employment peaks and troughs additionally be taken into account when calling the beginning and end of a recession? How different has the recovery path from New Zealand’s most recent recession been? Evidence relating to these and other questions will be presented from recent work co-authored with Dr John McDermott (RBNZ).
Download Viv’s slides.
Speaker Ruth Towse, Professor of Economics of Creative Industries and Co-Director of the Centre for Intellectual Property Policy & Management, Bournemouth University; Erskine Fellow 2013.
For a long time in its 50-year history, cultural economics was concerned almost exclusively with the subsidised arts and heritage and issues around their finance, demand and participation. Another topic that relates to their costs was the study of the labour markets and employment of creators. Later on, the notion of creative industries and the creative economy has come to the fore, with the emphasis shifting towards a much broader spectrum of cultural activities and the role of copyright law in these industries. Recently, digitization has altered a number of these industries, and cultural economics is coming to terms with that.
Speaker Adam Jaffe, Director, Motu Economic and Public Policy Research; Fred C. Hecht Professor in Economics, Brandeis University.
A country’s ability to develop and use new technologies is a major determinant of its long-run ability to improve its standard of living and confront health, environmental and other social challenges. Maximizing New Zealand’s technological progress requires a coordinated set of policies regarding strategic investment in scientific research, appropriate institutions to facilitate commercial exploitation of public research, and policies that facilitate commercial development and use of new technology. Devising the right policy mix for New Zealand requires learning from successful and unsuccessful policies in other countries, but adapting those lessons to the specifics of New Zealand’s strengths and challenges.
Speaker: Todd Litman, Victoria Transport Policy Institute
Transport planning is experiencing a paradigm shift; that is, a change in the way that problems are defined and solutions evaluated. The old paradigm is mobility-based. It assumes that the planning objective is to maximize travel speed, and evaluates transport system performance based primarily on automobile travel conditions. A new paradigm recognizes that the ultimate goal of most transport activity is accessibility, which refers to people’s overall ability to reach desired services and activities. This new paradigm expands the range of modes objectives, impacts and options considered in the planning process. It recognizes additional costs from increased motorized transport and more benefits from walking, cycling and public transport. More comprehensive and multi-modal planning is particularly important to respond to structural changes such as aging population, rising fuel prices, increasing health and environmental concerns, and changing consumer preferences.
Speaker: Dr. Suzi Kerr, Motu Economic and Public Policy Research. For more detail, and audiovisual material, see Suzi’s 2012 seminar.
Speaker: Professor Paul Cheshire, London School of Economics. For more detail and audiovisual material see Paul’s 2012 seminar.
Speaker: Professor Paul Cheshire, London School of Economics
Cities have fundamental advantages and contribute directly to human welfare. Indeed they are probably the most important invention in our history. Over the past 20 years in China, alone, the growth of cities has probably rescued more people from abject poverty than in any previous period in the world’s history. Urbanisation delivers higher living standards because cities themselves deliver higher economic productivity but also greater welfare for their residents. They do this by means of the specialisation and agglomeration benefits they sustain.
But cities change - some grow, some decline - as external factors conditioning their development alter. 20 years ago we in OECD countries were obsessed with ‘urban decline’ but now in many cities that has given way to resurgence. As the structure of output has been transformed and manufacturing has declined in the rich countries the new and growing sectors benefit more intensively from agglomeration economies and are less disadvantaged by the traditional problems of large cities - high costs of space and congestion. The increasing importance of agglomeration economies goes hand in hand with an increasing pay-off to skills; and an increasing concentration of skilled labour in larger cities. This has the downside that the increasing present prosperity of cities is linked to increasing inequality. There are costs as well as benefits of city size. As cities get bigger so congestion, crime and the price of space increase but the most recent research suggests that these costs are neither as significant nor as inevitable as was once thought.
Despite the critical importance of cities for economic and social wellbeing we have still developed powerful urban policies without any supporting evidence; indeed without really understanding what makes cities work so well. We have policies in the name of sustainability that put tight growth constraints on our cities. We know these have damaging economic effects but it seems possible they don’t deliver any reduction in carbon footprint. We have policies to impose ‘mixed communities’ but the evidence suggest that while this costs significant resources it achieves nothing in the way of reducing inequality. On the other hand there is clear evidence that residential segregation is the spatial manifestation of societal inequality and that the varied types of community and neighbourhood that sorting within cities generates contributes to the welfare of the great majority of urban residents. In Europe we have policies to divert growth from larger cities to small and medium sized ones in the name of ‘balanced urban development’. But the importance of agglomeration economies suggests exactly the opposite policy would be economically better and already we impose ‘containment’ boundaries to restrict the growth of our large cities. The huge price premium we observe at the urban boundary if land can be re-zoned from agriculture to urban use is, in effect, the price we pay for lost agglomeration economies. In short we are in danger of killing the goose that lays the golden eggs. We really need to understand better how cities ‘work’ and what the unintended consequences of our policies might be before we act.
Check out the Wellington audio at youtube.
See the Spatial Economics Research Centre Blog here
Speaker: Dr Suzi Kerr, Motu Economic and Public Policy Research.
Without effective developing country participation in climate mitigation it will be impossible to meet global concentration and climate change targets. However, developing countries are unwilling and, in many cases, unable to bear the mitigation cost alone. They need huge transfers of resources - financial, knowledge, technology, and capability - from industrialised countries. At the same time, New Zealanders want to make a meaningful contribution to the global climate mitigation effort and face rapidly rising costs of mitigation at home. We need to fund mitigation / buy emission units from developing countries. The Kyoto Protocol offered one approach to coordinating international mitigation but has run into many challenges. New Zealand’s emissions trading system that was designed to respond to Kyoto is now very weak; prices are low and the emission units available for us to buy are of low quality. Many key industrialised country emitters have dropped out of the Kyoto Protocol, and it has been unable to adapt to involve developing countries in more meaningful ways. The key existing approach to funding developing country mitigation, the ‘Clean Development Mechanism’ is clumsy, has high transaction costs, focuses on a few large countries and has low environmental integrity. New efforts are now emerging at the international level (top down) and at the national or regional level (bottom up). In this new world it is hard to gauge the seriousness of efforts but it is certain that they are insufficient and poorly coordinated. A large part of these problems is inherent to the challenge of getting seven billion people to cooperate on an issue where costs fall on those who fund mitigation but all gain the benefits - no effort will fully escape this difficulty. How can we, as a globe, do better, and what could New Zealand’s role be in that? This presentation will draw on recent work within the agricultural sector in New Zealand, as well as work in Chile, Colombia, Korea and at a more fundamental conceptual level to propose some new ways forward for New Zealand and others to effectively promote mitigation action in developing countries.
Download seminar slides.
Speaker: Professor Lewis Evans, Victoria University of Wellington
This seminar shows the way the electricity market utilises river flows and the effect of changes in characteristics of these flows on the production and consumption of electricity. It shows how the reservoirs and non-hydro generation are utilised in generation decisions, to shift water use over time to meet seasonal and daily peak consumer demands. It explains how characteristics of the river flow and changes in them are translated into longer term, hedge and retail prices.
The seminar draws on two strands of research that ISCR conducted under the Motu project ‘Integrated Research on the Economics of Climate Change Impacts, Adaptation and Mitigation’.
Speaker: Professor Robert Cairns, McGill University, Montreal.
The green paradox states that an increasing tax on emissions of carbon dioxide, consonant with expected increase in their marginal damages, may induce oil producers to shift their production toward the present and thereby to exacerbate the problem of climatic change. The model is based on Hotelling models of resource use that do not take the natural and technical features of oil production into account. When these features are taken into account, the prediction of the green paradox is unlikely.
View seminar slides.
Speaker: Jose Enrique Garcilazo, Unit for the Rural and Regional Development Program, OECD.
Recent OECD analysis highlights the importance of promoting growth in all regions, and in particular intermediate regions hosting medium size cities. This analysis reveals that although economic activity tends to concentrated in space—in particular in major urban cities—economic efficiency does not; and in fact can occur in different types of regions. The contribution by lagging regions to aggregate growth is quite substantial; roughly almost as important as the contribution from the most developed ones. Although there is no magical “one size all fit” formula that can be applied to all regions for promoting growth, the analysis finds that the most important growth drivers are specific to the region—these being in particular infrastructure, human capital, innovation and agglomeration. Perhaps the most important findings are, first, that the key factors are largely endogenous - i.e. they are items policy can address (as opposed to natural endowments or physical geography) - and, secondly, that these endogenous factors complement each other, suggesting that an integrated approach is needed. Therefore the role of policies and institutional factors is critical. In the past most policies aimed at supporting backward regions sought to “prop them up” through fiscal transfers and subsidies, an approach that yielded very poor results. This report provides fresh analysis that calls for a new approach. The analysis shows how relatively backward regions can in fact be potentially important sources of growth, but that a very different approach is needed to tap that potential.
Speakers: Professor Philippa Howden-Chapman, Director, He Kainga Oranga/Housing and Health Research Programme, University of Otago, Wellington, and Dr Arthur Grimes - Senior Fellow at Motu Economic and Public Policy Research
Considerable evidence now exists that housing quality affects health status. Sub-standard housing contributes to respiratory disease and impacts negatively on other health and social outcomes. Energy use is inefficient in poorly insulated houses, while poor heating choices can both increase energy use and decrease health status. This seminar outlines key findings from a programme of research into healthy housing issues in New Zealand conducted by Professor Philippa Howden-Chapman and colleagues at He Kainga Oranga/Housing and Health Research Programme, University of Otago. In a recent study, University of Otago researchers joined with researchers from Motu and elsewhere to evaluate initial impacts of the Warm Up New Zealand: Heat Smart programme This programme is designed to promote installation of retrofitted insulation and healthy heating options in over 188,000 houses over 2009-2013. Results from this initial evaluation will be presented in the context of the broader healthy housing research programme.
View seminar slides.
Related papers: Four reports are now available: an overall cost-benefit analysis of the programme, and three more detailed reports on Warm Up New Zealand’s effects on energy use, health services utilisation, and industry and employment:
Speaker: Professor Norman Gemmell, Chair in Public Finance at Victoria University of Wellington.
The empirical literature on the elasticity of taxable income (ETI) sometimes questions whether estimated values are consistent with being on the revenue-increasing section of the Laffer curve, usually in the context of a single rate tax system or for top marginal rates. This paper develops conceptual expressions for this ‘Laffer-maximum’ or revenue-maximizing ETI for the multi-rate income tax systems commonly used in practice. Using the New Zealand income tax system in 2010 to illustrate its properties, the paper demonstrates that a wide rangeof revenue-maximizing ETI values can be expected across individual taxpayers,across tax brackets and in aggregate.
View the seminar slides.
Speaker: Dr Suzi Kerr, Senior Fellow at Motu Economic and Public Policy Research.
New Zealand sells itself as clean and green, yet that reputation is threatened by deteriorating water quality. Addressing water quality effectively requires good science, economic efficiency, community support and cultural change. Motu, along with NIWA and a broad team of researchers and stakeholders, have run an integrated five-year programme focusing on a subset of these issues within the Lake Rotorua catchment. Water quality in Lake Rotorua has been declining for at least 30 years as increased levels of nutrients have entered the lake. Despite significant effort and expenditure, the level of nutrients entering the lake still exceeds desired levels. Suzi will present a prototype nutrient trading scheme for Lake Rotorua that was developed with local stakeholders and builds on the Lake Taupo experience. The trading scheme aims to meet the community’s environmental goals in a certain and cost-effective way, maximise participant flexibility and distribute costs fairly. We are synthesising general lessons from this programme that are now being used by Regional Councils around New Zealand and in processes such as the Land and Water Forum. Suzi will discuss how markets might be used more widely and present some key lessons from Rotorua for New Zealand.
Speaker: Thomas Sterner, Professor of environmental economics at the University of Gothenburg.
Global climate change stands out from most environmental problems because it will span generations and forces us to think in new ways about intergenerational fairness. It involves the delicate problem of complex coordination between countries on a truly global scale. As long as fossil fuels are too cheap, climate change policy will engage all major economies. The costs are high enough to make efficiency a priority, which means striving toward a single market for carbon-plus tackling the thorny issues of fairness. The latter is the focus of Sterner’s talk. Sterner will discuss some necessary ingredients for a long-term global climate strategy and stresses that as we wait for the final (and maybe elusive) worldwide treaty, we must find a policy that makes sense and is not only compatible with, but facilitates the development of such a treaty. He also challenges the cwonventional wisdom that gasoline taxation, an important and much-debated instrument of climate policy, has a disproportionately detrimental effect on poor people. Increased fuel taxes carry the potential to mitigate carbon emissions, reduce congestion, and improve local urban environment. As such, higher gasoline taxes could prove to be a fundamental part of any climate action plan. However, they have been resisted by powerful lobbies that have persuaded people that increased fuel taxation would be regressive. Reporting on examples of over two dozen countries, this book sets out to empirically investigate this claim. The authors conclude that while there may be some slight regressivity in some high-income countries, as a general rule, fuel taxation is a progressive policy particularly in low income countries.
Speakers: Ross Cullen, Professor of Resource Economics at Lincoln University, & Kathy Baylis, Assistant Professor in Agriculture and Consumer Economics at the University of Illinois.
There are limited funds available for conservation projects. Choices must therefore be made on how to use limited resources most effectively, and such decisions should be based on clear and measurable objectives for achievement. Project selection and evaluation methods are used patchily by biodiversity project providers and researchers. Conventional methods for evaluating conservation impact tend to be biased because they do not compare like areas nor do they account for spatial relations. Ross Cullen will provide an introduction to biodiversity project evaluation; outline the range of economic evaluation methods available; and focus attention on the need to overcome hurdles to adoption and continuation of economic evaluation methods. Kathy will describe a recent study applying a spatial analysis on the effectiveness of a forest (and Monarch butterfly habitat) conservation program in Mexico. The study assesses the effect of a
conservation initiative that combined designation of protected areas with payments for environmental services to conserve overwintering habitat for the monarch butterfly (Danaus plexippus) in Mexico.
Ross’s paper has recently been published as Cullen, Ross. 2012. “Biodiversity Protection Prioritisation: A 25-Year Review,” Wildlife Research.
Speaker: Dr Andrew Coleman, Senior Fellow at Motu Economic and Public Policy Research.
Discussant: Dr Malcom Menzies, Research Manager at the Commission for Financial Literacy and Retirement Income.
Nearly fifty years ago, Peter Diamond showed that prefunded (save-as-you-go) retirement scheme require much smaller contributions for any level of retirement incomes than pay-as-you-go retirement schemes if the return to capital investments is larger than the growth rate of the economy. Since then, a voluminous international literature has examined the comparative merits of the types of schemes. In general, this literature has shown that there would be significant efficiency gains from making a full or partial conversion to SAYGO funded retirement scheme, but that there are difficult transition issues. This talk examines the economics of PAYGO and SAYGO funded saving schemes in New Zealand. It argues that it is likely that the annual tax contributions needed to support the current New Zealand Superannuation scheme could be halved if the scheme were fully converted to a SAYGO scheme, and that feasible transition paths to a partially funded SAYGO scheme exist. Converting New Zealand’s retirement scheme to a SAYGO funding basis is therefore a possible solution to the issues associated with population ageing. A comparison with Australia, where people are reaping the rewards of making the transition to a mixed SAYGO-and PAYGO pension scheme, is offered.
For slides, audio or information about Public Policy Seminars prior to 2011, please contact us.