Responding to Climate Change: A Carbon Tax or an Emissions Trading Scheme? A New Zealand Perspective
Sung, Sally Ki-Youn
Degree GrantorUniversity of Canterbury
Degree NameMaster of Commerce
Consequences of global warming and climate change issues have become more apparent over the last several decades. Heat waves, floods, tornados and storms are not just natural disasters occurring elsewhere, but they are now serious environmental catastrophes threatening New Zealand (NZ) and nearby countries as a result of continously escalating greenhouse gas (GHG) emissions. Thus, the Kyoto Protocol was prepared for countries to work collaborately to provide a solution through encourging countries to commit themselves to reducing their individual share of the total GHG emissions. To date, NZ has gone through several phases of modification – introducing and revising two distinctive climate change policies (a Carbon Tax and an Emissions Trading Scheme [ETS]) as a tool to reduce GHG in NZ. These attempts to address climate change, coupled with the question raised by McDonald (Irish Times, 2009) doubting the actual effect of a tax on behaviour-change, provide an extensive basis for a case study in a NZ context involving an evaluation of the effectiveness of these regimes on incentivising behaviour-change to reduce and stablise the level of GHG emissions. In an attempt to answer the research question and conduct a case study in a NZ context, a triangulation approach incorporating both quantitative and qualitative research methods was undertaken. Statistical data analysis was conducted as a quantitative method to analyse and compare numerical changes 'with‘ and 'without‘ the existence of climate change policies. To enhance the results obtained from the quantitative research, qualitative information was also collected by interviewing politicians directly related to the introduction, implementation and the review process of the climate change policies in a semi-structured manner. The results of this study reinforced the need for regulations and policies to reduce and maintain the level of GHG emissions. Statistical data analysis proved that the existence of climate change policies results in lower level of GHG emissions. The interviewees also perceived that some sort of policy is definitely required to regulate the level of emissions, although whether the current, National-led Government‘s modfied-ETS is the 'right' approach is still uncertain. However, the majority of interviewees agreed that the type of tool does not matter, as long as it is correctly-designed to reflect the necessary policies to influence the decision making process of individuals and businesses, and ultimately change their behaviour as a result. However, in order to maintain NZ‘s relationship with other countries, it is preferable to retain its ETS regime until other countries decide to do otherwise.