Our report provides advice on the Government’s final decision about the second emission budget. In addition to a wide range of policies considered in our earlier (May) report, the current report further investigates the impact of:
- alternative carbon pricing policies,
- the Electrify NZ policy,
- the EV charging network investment, and
- the Carbon Capture, Utilisation and Storage (CCUS) and the Refrigerants Regulated Product Stewardship scheme assumptions.
Our high-level results suggest that:
- the high carbon price of the Fourth Pathway scenario leads to larger adverse economic and equity impacts.
- a decrease in GDP is associated with lower household consumption, lower real wages and lower exports (volume). As will be discussed, the short, medium and long-term dynamics of these effects are important for households (as well as the emission and economic outcomes).
- the emission targets are achievable, but there is a significant adverse impact on economic and equity outcomes.
We sensitivity tested the results for seven different Nationally Determined Contribution (NDC) scenarios. Our extensive modelling of the government policies provides a comprehensive database for various policy and investment assessments as well as the ESG planning.