The Treasury has published today a new Analytical Note by Cory Davis, Boston Hart and Benjamin Stubbing, Household cost-of-living impacts from the Emissions Trading Scheme and using transfers to mitigate regressive outcomes.

This Analytical Note presents estimates of the impacts on household fuel, airfares, and food expenditure for a plausible increase in carbon price. It sets out how these impacts are distributed across the income distribution, across different household types, and across households that receive different forms of income support. It also models different revenue recycling options that mitigate regressive impacts, including flat carbon dividends and changes to existing transfers. The focus of this paper is on descriptive statistics; it does not comment on the relative merits of the different transfers modelled or more broadly on the use of Emissions Trading Scheme revenue.

Disclaimer: The views, opinions, findings, and conclusions or recommendations expressed in this paper are strictly those of the authors. They do not necessarily reflect the views of the New Zealand Treasury or the New Zealand Government. The New Zealand Treasury and the New Zealand Government take no responsibility for any errors or omissions in, or for the correctness of, the information contained in papers and articles.

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