New CEFGroup IAEE Working Paper on NZ ETS
CEFGroup’s new IAEE working paper highlights that NZU prices may have been distorted by overallocation and unlimited international offset. Abstract below:
ABSTRACT
The New Zealand Emission Trading Scheme (NZ ETS) is the second oldest national ETS in the world and is unique in that it includes forestry as a carbon sink (a source of unit supply). Further, NZ ETS has been subject to many policy changes including a switch from allowing unlimited importation of units to becoming completely autarkic. In this context, we analyse the pricing dynamics for New Zealand Units (NZUs) driven by the interaction between allowances supply and demand between 2010 and 2019 and for two sets of subperiods divided by the official and actual de-link dates. Our empirical models find that international offset negatively affected NZU returns before the actual de-link date, domestic supply after the official de-link date, and banked units between the official and actual de-link dates, and that green (mainly forestry) offsets, surprisingly, positively affected NZU returns before the actual de-link date. Our results also highlight that from a demand perspective, sectoral effects had significant relationships with NZU returns with different dynamics. Namely, manufacturing and construction activities shifted to negatively affect NZU returns after the official de-link date, implying that fixed allocative baselines have resulted in over-allocation over time. Stationary energy sector activities shifted from negatively to positively affecting NZU returns after the official de-link date probably due to their exploitation of unlimited international offset during the linking period.
A copy of the working paper could be found via the following link: The Role of Fundamentals and Policy in New Zealand’s Carbon Prices
Authors: Ms Ling Liao, Professor Ivan Diaz-Rainey, Dr Sebastian Gehricke, Dr Duminda Kuruppuarachchi
Business Can No Longer Ignore Extreme Heat Events – It’s Becoming A Danger to the Bottom Line
Do you know UK and EU businesses lose almost 975 million New Zealand dollars in annual sales for every additional degree of excessive temperature?
Do you know that extreme heat not only affects businesses’ profitability, but may also damage your investment portfolio?
The Conversation article, written by CEFGroup‘s David Lont and Paul Griffin, and Victoria University of Wellington‘s Martien Lubberink, unveils how heat waves hit organisations’ bottom line and investors’ confidence. Click HERE for more.
A copy of the working paper could be found via SSRN: Click HERE.
CEFGroup Director to Speak at CoreLogic Climate Change Panel
Join CoreLogic New Zealand‘s Climate Change Panel on Thursday 7th of July, where several climate experts, including CEFGroup Director Ivan Diaz-Rainey, will be discussing the increasing impact of climate change on New Zealand property, and the implications for the financial stability of Kiwis, businesses and our broader economy. Details below:
Addressing climate change, financial stability and property in New Zealand
Thursday, 7th July 2022
12.30pm – 1.30pm
(including 15 mins live Q&A)
Panelists include:
-
Mark Baker Jones – Director, Te Whakahaere
-
Ivan Diaz-Rainey – Director, Climate and Energy Finance Group (CEFGroup), University of Otago
-
Belinda Storey – Managing Director, Climate Sigma
-
Olaf Adam – Senior Manager of Sustainability, Westpac New Zealand
-
Tom Larsen – Senior Director of Insurance Solutions, CoreLogic US
-
Bernard Hickey (moderator), independent commentator
Two CEFGroup Papers Accepted for Presentation at the 5th Annual GRASFI Conference
Two CEFGroup papers have been accepted for presentation at the 5th Annual GRASFI Conference. Details are as follows:
Presentation Title: In Holdings We Trust: Uncovering the ESG Fund Lemons
-
Date and Time: Tuesday 6th September 12:45am-1:15am New Zealand Time (or Monday 5th September 2:45pm-3:15pm Central European Summer Time)
-
Presenter: Renzhu Zhang (Strategic Postdoctoral Fellow, CEFGroup, University of Otago)
-
Authors: Mr. Lachie McLean, Associate Professor Ivan Diaz-Rainey, and Dr. Sebastian Gehricke
Presentation Title: Scope 3 Emissions: Data Quality and Machine Learning Prediction Accuracy
-
Date and Time: Tuesday 6th September 8:50pm-9:20pm New Zealand Time (or Tuesday 6th September 10:50am-11:20am Central European Summer Time)
-
Presenter: Quyen Nguyen (STRAND Marsden Postdoctoral Fellow, CEFGroup, University of Otago)
-
Co-Authors: Associate Professor Ivan Diaz-Rainey, Adam Kitto, Dr. Ben McNeil, Nic Pittman and Dr. Renzhu Zhang
Conference agenda is available HERE. To register, click HERE. For more information, visit the conference website.
CEFGroup Upcoming JRC Summer School on Sustainable Finance Presentation
Sebastian Gehricke, Deputy Director of the Climate and Energy Finance Group (CEFGroup), and Quyen Nguyen, CEFGroup STRAND Marsden Postdoctoral Fellow, will be presenting at the 4th JRC Summer School on Sustainable Finance on Thursday the 7th and Friday the 8th of July (NZT). Details of their presentation are as follows:
Presentation Title: In Holdings We Trust: Uncovering the ESG Fund Lemons
-
Date and Time: Thursday 7th July 8:50pm-9:05pm New Zealand Time (or Thursday 7th July 10:50am-11:05am Central European Summer Time)
-
Presenter: Dr. Sebastian Gehricke (Deputy Director, CEFGroup, University of Otago)
-
Co-Authors: Lachie McLean, Associate Professor Ivan Diaz-Rainey, and Dr. Renzhu Zhang
-
Presentation Title: Scope 3 Emissions: Data Quality and Machine Learning Prediction Accuracy
-
Date and Time: Friday 8th July 7:30pm-7:45pm New Zealand Time (or Friday 8th July 9:30am-9:45am Central European Summer Time)
-
Presenter: Dr. Quyen Nguyen (STRAND Marsden Postdoctoral Fellow, CEFGroup, University of Otago)
-
Co-Authors: Associate Professor Ivan Diaz-Rainey, Adam Kitto, Dr. Ben McNeil, Nic Pittman and Dr. Renzhu Zhang
For more information, click HERE. To register, click HERE. The programme of the event is attached below.
4th JRC Summer School on Sustainable Finance – Programme
The NZ Property Market Podcast Guest Episode – Climate Panel Preview with CEFGroup Director Ivan Diaz-Rainey
Nick Goodall, Head of Research at CoreLogic New Zealand and member of the STRAND Advisory Group interviewed CEFGroup Director Ivan Diaz-Rainey – Climate Finance expert, Lead of the STRAND Marsden Fund Project, and member of the upcoming CoreLogic New Zealand Climate Panel event.
Aside from a bit of football and travel chat, Nick and Ivan discussed where New Zealand stands when it comes to Climate Change mitigation and adaptation for its financial economy, and the flow-ons to New Zealand’s property market.
The interview is 42 minutes in total, available via apple podcasts: Click HERE.
To register for the upcoming Climate Change Panel, being hosted by Bernard Hickey on 7th July, click HERE.
Are carbon prices overvalued? – CEFGroup Director Comments in North and South Magazine
North & South Magazine has published a detailed analysis of New Zealand’s Emissions Trading Scheme and in particular how it is affecting land use through afforestation. CEFGroup Director, Ivan Diaz-Rainey is quote in the article about the current value of carbon units (NZU) and where they value may go in the future.
You Have Now Entered Carbon Country – North & South Magazine
Climate Transition Risk: Measurement Challenges and Application in Bank Stress Testing
32,888 academics and industry practitioners livestreamed the Tsinghua PBCSF Green Finance Lecture, entitled “Climate Transition Risk: Measurement Challenges and Application in Bank Stress Testing” last Friday, delivered by CEFGroup Director Ivan Diaz-Rainey.
If you missed it, the full recording is now available HERE (please click “进入回看“), or via CEFGroup’s YouTube Channel.
See attached PDF file for the lecture’s transcription, provided by the Center for Green Finance Research (CGFR) of Tsinghua University National Institute of Financial Research (NIFR).
Click HERE for a summary in Chinese on the Center for Green Finance Research (CGFR) of Tsinghua NIFR‘s WeChat Media Platform.
Introduction of Tsinghua PBCSF Green Finance Lectures
Nowadays, sustainable development and climate change are the mainstream of world development, in which green finance plays an irreplaceable role. There have been hot debates and discussions in China and worldwide on questions such as how to balance the relationship between environmental protection, climate change and economic development, how to effectively combine market and government efforts to achieve the Sustainable Development Goals, and is there a most efficient pathway of low-carbon transition.
Against this background, we launched the “Tsinghua PBCSF Green Finance Lectures” that are hosted by Tsinghua University PBC School of Finance (PBCSF) and organized by the Center for Green Finance Research (CGFR) of Tsinghua University National Institute of Financial Research (NIFR), with an aim to explore the future development of green finance and carbon neutrality targets. We invite domestic and international leading experts from academia, industry and government to give lectures on cutting-edge issues such as Carbon Neutrality, green finance, ESG and climate risk, for faculty members, students at Tsinghua and also audiences beyond Tsinghua’s community. This lecture series are held online on a bi-weekly basis and live broadcasted on all platforms of Tsinghua PBCSF.
Introduction of Center for Green Finance Research (CGFR) of Tsinghua NIFR
Center for Green Finance Research (CGFR) of Tsinghua University National Institute of Financial Research (NIFR) was established in 2018 and is led by Prof JU Jiandong, the Unigroup Chair Professor at Tsinghua’s PBC School of Finance. As a leading green finance research platform with extensive international cooperation experience, the center is dedicated to academic and policy research, innovation, and global partnerships in sustainable finance. With China’s commitment to carbon neutrality, the center strives to serve the nation’s climate strategy and sustainable development worldwide. Through researching the tools and paths toward carbon neutrality, conducting environmental risks analysis and developing green finance standards, the center supports China’s policymaking and advises the country’s top financial institutions and corporations on green business development and strategic planning.
Tsinghua PBCSF looks forward to your participation on its future Tsinghua PBCSF Green Finance Lectures. For further information on the lecture series and the Center for Green Finance Research (CGFR) of Tsinghua NIFR, please contact sunty@pbcsf.tsinghua.edu.cn.
CEFGroup Deputy Director Chairing New Zealand’s Infrastructure Funding and Financing Conference
CEFGroup Deputy Director, Sebastian Gehricke, is chairing the New Zealand’s Infrastructure Funding and Financing Conference this coming Monday (30th May) and Tuesday (31st May).
New Zealand’s Infrastructure Funding and Financing Conference will address critical challenges faced by both the public and private sectors in financing and funding successful projects and maintaining high-performing infrastructure assets in a rapidly changing world of digitisation, energy transition, climate change and growing societal needs. Industry experts will address the financing, funding and delivery of infrastructures in NZ as well as examining the legislative aspects and means needed for sustainable and timely delivery for a better Aotearoa. Some highlighted speakers include:
- Dr Alan Bollard, Chair of New Zealand Infrastructure Commission;
- Ngahuia Leighton, Infrastructure Development Manager at Crown Infrastructure Partners;
- Matt Whineary, CEO of NZ Super Fund;
- Fiona Wright, Head of Infrastructure Funding and Development Strategy at Auckland Council;
- Towfiqua Hoque, Senior Infrastructure Finance Specialist at Global Infrastructure Facility; and
- Haran Siva, Senior Advisor and Country Manager at Climate Bonds Initiative, among many others.
For more information, visit New Zealand’s Infrastructure Funding and Financing Conference’s event page.
CEFGroup Deputy Director Invited to Present Working Paper at University of Zurich and FMA
CEFGroup Deputy Director, Sebastian Gehricke, presented his recent working paper entitled “In Holdings We Trust: Uncovering the ESG Fund Lemons” at the University of Zurich (Friday 20th May) in Zurich, Switzerland. The same paper was also presented to the Financial Markets Authority (FMA) investments team and directors on Tuesday the 5th of April, and he will present the paper again with insights from relevant literature to the entire FMA for their “In the Know” session on Wednesday the 22nd of June. This will include attendees from across the entire FMA, as well as from The Treasury, Reserve Bank of New Zealand (RBNZ) and other relevant government entities, invited by the FMA.
For more information on the working paper and the related industry report, visit New Research: In Holdings We Trust: Uncovering the ESG Fund Lemons.
