Current insights and publications
Natural capital | GRDC grains-sector risks and opportunities
GRDC has released a public version of our strategy review regarding risks and opportunities for Australia's grains sector from environmental markets, TNFD, and related matters.
A quick overview is available in the GRDC's "Groundcover" magazine here:
The full report is on the GRDC website here:
Natural capital | The cost of biodiversity
April 24: Dr Liz has prepared this discussion paper comparing biodiversity credit prices (in $USD) for credit products generated under various global frameworks. Having brought the underlying parameters (area, time, conservation outcome) to a common basis, Liz finds a very wide price range, from $0.2 to $1,100 USD per year (or $7 to $41,000 USD per 100 years).
We estimate a mean price of $236 USD per year ($8,800 USD per 100 years) and median price of $20 USD per year ($750 USD per 100 years). But clearly there are very different levels of "quality" in the global biodiversity markets.
Energy markets | JGSEE lectures on environmental finance and energy
Energy markets | JGSEE lectures on environmental finance and energy
June 2023: Dr Karel Nolles was a Visiting Professor at the Joint Graduate School of Energy and Environment (JGSEE), KMUTT, in Thailand from 2020 to 2024. Recordings and presentation materials from his public lectures on environmental finance and energy economics are available here.
Natural capital | AARES symposium
Energy markets | Suspension of the National Electricity Market
Energy markets | JGSEE lectures on environmental finance and energy
October 2022: Dr Karl presented at the Australian Agricultural and Resources Economics Society symposium on Natural Capital
Energy markets | Suspension of the National Electricity Market
Energy markets | Suspension of the National Electricity Market
Energy markets | Suspension of the National Electricity Market
June 2022: Dr Karel Nolles presented a public lecture at the Joint Graduate School of Energy and Environment, KMUTT, on the May 2022 suspension of Australia’s National Electricity Market. The accompanying paper is available here.
Market design | NSW biodiversity offset price calculator
Energy markets | Suspension of the National Electricity Market
Energy markets | Suspension of the National Electricity Market
October 2020: Aton Consulting conducted a review for the NSW Department of Environment regarding the market dynamics in the Biodiversity Offset Market, and the possible impacts of removing the Biodiversity Offset Price Calculator (BOPC) from public view.
The report was released by the DPE under an FOI request.
Energy markets | Investment opportunities in the energy transition
Energy markets | Investment opportunities in the energy transition
Energy markets | Investment opportunities in the energy transition
July 2020: Dr Karl presented at ASEAN Energy Day, with accompanying paper, on the investment opportunities (and difficulties) arising from the Energy Transition.
Research archive
How the Forward Market raised the Greenhouse Gas penalty rate by 20% in NSW (2006)
In 2006 it became clear that market participants in the NSW Greenhouse Gas Abatement Market were trading certificates at ABOVE the government set penalty rate. This apparently irrational behaviour did of course have a rational explanation, and in this personal 2006 submission to the National Emissions Trading Task Force, Dr Karel explains the interactions of forward markets and spot markets in the context of Australian environmental markets.
An investigation of the competition impact on gas pipeline pricing of the AGL-Alinta Merger (2006)
We partnered with the Allen Consulting Group to conduct an experimental economics investigation of the possible impacts of the proposed (in 2006) AGL-Alinta merger. The issue at play has to do with the market structure and interaction of upstream and downstream gas markets with the market for pipeline transmission capacity. (Particularly in the circumstance where one player is in fact active in all 3 markets).
Lessons for Environmental Markets from the Financial Markets
Lessons for Environmental Markets from the Financial Markets
In 2006 the Howard Government was working on the details of a proposed National Emissions Trading Scheme, and had established a National Emissions Trading Taskforce to develop the proposal. At the SEELab (and in consultation with the then AFMA Environmental Markets Committee), we prepared a research paper outlining some of the design lessons from financial markets that should be kept in mind when designing environmental markets.
Impact of REC Creation Timing (2006)
Lessons for Environmental Markets from the Financial Markets
In 2006 we observed some unusual market dynamics in the Renewable Energy Certificate Market. In this report, we examined how the asymmetry in market rules between electricity retailers (which had to buy RECs by a given date each year) and generators (which could create RECs at any time for electricity generated years earlier) could produce unusual market outcomes. Experimental-economics analysis demonstrated how these rules could violate the least-cost assumption. The Australian Government subsequently introduced a time limit on delayed REC creation.
Design Lessons for a Greenhouse Gas Market (2006)
One of our more frequently cited papers, from 2006, co-authored with Dr Iain MacGill and Professor Hugh Outhred. This paper examines the performance of the Mandatory Renewable Energy Target, the NSW Greenhouse Benchmarks, the Queensland 13% Gas scheme and Government accredited Green Power.
We conclude that the performance of these government designed environmental markets has been "mixed"....
Proceedings AARES (2003) Market Based Tools for Environmental Management
The Australian Agricultural and Resource Economics Society 2003 conference focused on the uses of markets to manage environmental issues. The full proceedings are 214 pages of relevant papers by multiple authors about the design of such markets.
In particular, MacGill, Outhred and Nolles were given a "best paper" award, for our summary of "experience with market based approaches to climate change". (At page 63 in the proceedings).
It is interesting to note that many of the same issues are being currently (2023) faced on the design of biodiversity markets....