A prize to reward innovative thinking in environmental or ecological economics
In 2020, GEN launched a new $2,000 economics writing prize to commemorate the late Dr Ed Hearnshaw’s significant contribution to the fields of applied economics and environmental policy in New Zealand. Open to young New Zealanders – tertiary students, recent graduates, junior-level professionals – entry is via a short essay proposing a policy intervention supported by sound economics. The inaugural prize was awarded in February 2021.
This award is co-sponsored by John and Vickie Hearnshaw and by GEN. Thanks to Renee Feith for graphics and marketing materials.
2022 Award Winner
The 2022 Award Winner is Matthew Caro, for taking a sound economic concept and appling it in a new domain. His essay was well written, well argued, noted the upsides, and also the challenges of implementing his idea of a pollutant trading scheme (see below for more). GEN extends its gratitude to the 2022 judging panel, which this year was John Stephenson of Sense Partners, James Walker, ex-MfE and now a sustainability and strategy consultant, last year’s winner Rosie Collins, and GEN’s own Tamara Linnhoff.
You can watch Matthew’s presentation below.
About Dr Ed Hearnshaw and his work
Dr Ed Hearnshaw was a highly regarded public sector economist who spent many years working within the Ministry for the Environment offering insightful and rigorous economic analysis across environmental economics topics, most recently co-leading the economic evidence base to support the Zero Carbon Act. His more recent role was as Chief Economics Advisor to the Parliamentary Commissioner for the Environment.
Ed died at 43 in a tramping accident, in June 2020. Ed is remembered with appreciation and admiration for the pioneering approach he took to applying economics to the biggest environmental challenges of our time, across his work at the PCE, MfE, and prior to that at Lincoln University.
He had a thirst for knowledge and a passion for applying economics to lift the effectiveness of environmental policy. Softly spoken, but with a formidable brain and staunch in his convictions, Ed was also generous with his time and attention, mentoring many more junior colleagues. Ed had joined the GEN Board early in 2020 and was closely involved in designing the GEN2021 conference. Ed was a dear friend to many across the economics and policy community here in New Zealand.
The 2022 prize: Avoiding chemical and industrial pollution and cleaning up environmental harm
Question: What are the best interventions to incentivise companies and organisations to avoid chemical and industrial pollution, and to clean up any environmental harm that occurs?
GEN and the Hearnshaw family presented the second-ever $2,000 award at an event on Thursday 26 May. The shortlisted essays were:
- Isobel Campbell: The Eco-Synergy Prize – uncovering and catalysing Industrial Symbiosis in New Zealand
- Matthew Caro: Pollutant Trading Scheme WINNER!
- Dominic White: Plastic Surgery: Cutting Plastic use in Industries
Matthew Caro, Pollutant Trading Scheme
The era of the RMA is over. Major reforms to our resource management system are well underway. Meanwhile, New Zealand’s waterways are polluted, biodiversity is declining and climate change looms.
To change our current trajectory we need to apply two fundamental principles to our policies. First, we must align companies’ economic incentives with communities’ environmental aims. Second, our laws must be dynamic and adaptable – like the ecosystems they aim to protect. These bedrocks will incentivise companies to avoid chemical and industrial pollution, and to clean up any environmental harm that does occur.
A proposed Pollutant Trading Scheme is built from these two foundations. It is a cap and trade system similar to the Emissions Trading Scheme, applied to all industrial, chemical and solid waste. Regional Councils set limits on the permitted mass of every pollutant and sell credits on an open market to companies who want permission to pollute. Each year, a company must surrender credits equivalent to the amount they pollute. The scheme allows any entity to earn credits by removing pollution from the environment. Together, these mechanisms will create strong economic incentives to spur innovation to reduce pollution, and will not be restricted by any standard.
Isobel Campbell, The Eco-Synergy Prize – uncovering and catalysing Industrial Symbiosis in New Zealand
In the words of the Ministry for the Environment, “there is often economic opportunity in what we throw away.” New Zealand’s commercial and manufacturing sectors are consistently missing the opportunity to convert waste into valuable inputs; and in doing so, the chance to mitigate chemical and industrial pollution profitably.
Industrial Symbiosis (IS) has enormous potential to incentivize pollution reduction by redefining waste as a useful resource. Facilitated through cross-organizational collaboration, IS involves the exchange of energy, water, and material by-products among co-located firms. Expansion of IS in New Zealand could reduce waste and environmental contamination and bring economic benefits to the firms involved. So, how can IS be cost-effectively incentivised?
Global governments are increasingly using prizes to tackle policy challenges in a budget-constrained environment, providing more effective results than traditional alternatives. This essay proposes a design innovation contest, The Eco-Synergy Prize, as a novel policy tool to uncover existing symbioses and foster inter-firm collaboration. This approach will capitalise on the self-organizing dynamic typical of IS clusters and bring together a network of technical experts. By making The Eco-Synergy prize a reality, New Zealand can move away from wasted resources and pollution to a future of continuous exchange and resource cycling.
Dominic White, Plastic Surgery: Cutting Plastic use in Industries
To tackle the growing problem of plastic pollution, policymakers and consumers should be informed about which industries are using plastics in production. Input-output data and the techniques developed for calculating embodied carbon emissions could be used to determine the plastic intensity (the value of plastic inputs per dollar of output) of industries. With this information, policymakers would know where and what type of plastic is being used, both directly and indirectly and give them the ability to introduce policies which focus on key plastic pollution pathways. One of these policies could be a ‘Low Plastic Certification’, described in this essay.
This policy would involve a central governing body awarding firms with either a ‘Low Plastic Certification’ or ‘High Plastic Warning’ on their products, based on whether they operate below or above a predetermined plastic intensity threshold. To penalise firms which contribute disproportionately to plastic pollution, plastics more likely to cause pollution would carry a higher weighted value in the plastic intensity calculation. As an alternative, firms could be awarded a ‘Low Plastic Certification’ on their products if they contribute the amount they are over the threshold towards cleaning up existing plastic pollution.
You can read the open-access journal article that resulted from this essay here.
The 2021 prize: Nudging consumers towards lower emissions choices
The question posed was: Nudging us: How can government policy interventions encourage Kiwi consumers to make choices that result in lower greenhouse gas emissions?
GEN and the Hearnshaw family were delighted to present the inaugural $2,000 award to Rosie Collins, for a superb essay ‘Flexiwork’: a nudge proposal. The top entries were shared with the Ministry for the Environment, the Climate Change Commission and NZ Treasury. Rosie’s Flexiwork essay also went to MBIE’s Labour Markets team.
Winning Entry: Rosie Collins, ‘FlexiWork’: a nudge proposal
Around 75% of Kiwis drive to work every day. Transport accounts for about 90% of direct household emissions, or 8,700kt CO2 per year. Emissions would fall if more people worked from home more often. The OECD estimates 4 in 10 New Zealand jobs could be done remotely without a loss of productivity. But only 10% actually work from home.
So why aren’t more people remote working?
Workers currently have the right to request remote work. But few do. Behavioural barriers – fear of stigma, ruffling feathers and status quo bias – make it difficult for workers to ask their employers to remote work. And employers don’t have to agree to any requests. ‘FlexiWork’ is a nudge proposal to tackle this problem. It shifts onto employers the responsibility of formally justifying when work cannot be achieved remotely.
This nudge would not mandate remote work, but slows down the process of defaulting to office-based arrangements. It changes power dynamics in workers’ favour. It could save about 96 million car trips each year, assuming a quarter of those who ordinarily travel by car switch to remote work at least two days a week. This could reduce New Zealand households’ carbon toll by about 2% per year, or 192 CO2kt.
In this context, it is a striking policy opportunity.
To read the essay in full, click here.