Thursday , March 4 2021
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Offsetting Behaviour

This New Zealand based economics blog was created by two economists, Eric Crampton and Seamus Hogan. They explore a range of fascinating topics from sports economics to housing and much more. Sharp and easy to follow analysis.

For a bigger carbon dividend

New Zealand has an excellent Emissions Trading Scheme covering everything except agriculture - a non-trivial exclusion, but we can come back to that later.The ETS has a cap. Net emissions from the covered sector cannot exceed the cap. So any other regulations that affect sectors covered by the cap only shift things around within the cap and affect the ETS price. They do not affect the quantum of net emissions. The Climate Commission has been proposing a lot of things that look a bit nuts...

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Reader mailbag: quarantine edition

This morning's Inbox comes with a plea that I advocate for self-isolation, rather than MIQ, for visitors coming in from Australia - doing so would vastly increase MIQ capacity, enabling a lot of visitors from actually-risky places to take up scarce slots in MIQ, and enabling more family reunification. My correspondent is in that latter situation. I've copied my reply below, lightly edited. I'm getting more than a little frustrated by the state of the border. Thanks for your kind words. You...

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Border Costs

Cecile Meier walks us through some of the costs of a border system that has neither been able to safely scale up to meet need, nor able to find any reasonable way of prioritising entry into those scarce MIQ spaces.When Zane Gillbee hugged his family goodbye in South Africa before moving to Wellington, his daughter Lyla was still a baby and his son Callum a happy seven-year-old.Lyla is now a potty-trained, walking, talking two-and-a-half-year-old and Gillbee has missed it all.Callum, who is...

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Blessed are they that have not seen the model, and yet have believed

The Climate Change Commission's recommendations span the breadth of the economy. They are required to come up with sector-by-sector climate budgets consistent with getting New Zealand with net zero emissions under the Zero Carbon Act. The sector-by-sector budgets rest on underlying models. The models build predictions about what will happen as ETS prices rise, and what will happen when some additional constraints are put into the system. Some of the CCC's recommendations then mandate what...

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Covid loans?

The excellent Richard Meade makes the case for Covid loans instead of wage subsidies. You can read the journal article on it, or his column over at The Conversation. Richard and I independently came up with the idea way back in March/April. I'd included it in our first comprehensive pandemic response policy paper, 26 March, with a bit more detail in a second short policy piece on 27 March. and he emailed me his two-pager on it about a week later. He'd not seen my version of it beforehand;...

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MIQ and the America’s Cup

I was curious how many spaces in New Zealand's Managed Isolation and Quarantine system were taken up by folks coming in for the America's Cup.It looks to be unknowable, at least for now.Immigration NZ has a list of people who were invited to apply for entry visas for the Cup, and another list of people who subsequently applied, and another list of those who were approved. There were 753 people whose entry visas were approved as of late January, with another 16 applications then under...

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Test test test

My column over at Newsroom this week points out the fairly obvious.The government can add daily saliva testing for everyone at the border to the existing testing regimen. If daily testing winds up proving the swab tests to be redundant, ditch the swab tests when we find that out. If it turns out they're both useful, keep both.And in the very unlikely chance that the saliva tests wind up being redundant, they won't have cost much.From the column:Saliva-based PCR testing is a game-changer. It...

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Forests and intertemporal equilibrium

I'm a bit of an ETS-absolutist. Or at least a carbon-pricing absolutist, in a place the size of NZ. I think the Weitzman reasons for preferring a carbon tax to an ETS are second-order relative to political economy considerations, and any weight at all put on switching costs makes it ludicrous to want NZ to flip from an ETS to a carbon tax. But if a carbon tax were already in place, I'd be an absolutist about supporting the carbon tax.There are fun and interesting arguments around...

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Mismanagement of the highest order

Josh Gans's newsletter on Covid, testing, and vaccination continues to be excellent. Here's the latest from Josh, on failures in the Australian system that led to the most recent outbreak there.However, let’s look at the testing. First of all, quarantined travellers are tested just twice (usually a few days after they arrive and a few days before they leave). Why aren’t they screened daily using rapid antigen screens? It costs very little and can ensure that cases are picked up quickly and...

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Afternoon roundup

 The afternoon's closing of the browser tabs brings the following worthies:Superb news! The police have taken an operational decision not to waste resource sending helicopters out looking for cannabis plants. Or at least National Headquarters isn't going to resource it any longer. Lots of things are illegal; police (rightly) have limited budgets and so have to make decisions about where to focus their efforts. Flying around in helicopters on gardening operations makes far less sense than...

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