1. Climate change policy :gaps in economic analysis Adrian Macey, Institute of Policy Studies, VUW, March 2012

2. Current policy needs Target – NZ carbon budget 2013-2020? ▫NB framed more as “what pace should NZ transform its economy” and less as “what is our fair share” Market mechanisms ▫ETS linking ▫New mechanisms Carbon leakage and competitiveness. Global food production

3. How economics can contribute Cost of NZ targets ▫On whole of economy ▫By sector ▫Include dynamic effects ▫Include counterfactuals Competitiveness and carbon leakage effects on NZ- all sectors –under different scenarios Agriculture ▫Metrics (under way) ▫Basket of gases? Separate treatment for methane? ▫Global food production and consumption modelling – economics of food production in NZ ▫Mitigation potential

4. How economics can contribute(2) Carbon markets ▫Effects of limiting supply (restrictions on carry- over, on CDM etc, or on percentage of obligations that can be met through the market) ▫Optimum carbon price ▫Design of new market mechanisms A Stern review for New Zealand?