Climate Change and Economic Policy

Our economics and policy team has a particular focus on climate change. We work with clients to:

1. understand developments in carbon emissions policy and regulation
2. plan and invest under current emissions policy uncertainty
3. consider climate risks specific to their organisation, economic sector and geographic location
4. develop robust strategies to manage climate risk and adapt to a changing climate
5. integrate work on climate mitigation and adaptation to create integrated climate change strategies.

We have helped a broad wide range of clients across many sectors including water, energy, manufacturing, retail, banking and finance, and government. We work with NGOs, ASX100 companies, small to medium businesses, and State and Local governments and agencies grapple with the challenges of emissions mitigation, future carbon trading and climate adaptation.

Some of the tools we use include:

1. Cost curves are an effective tool for comparing options for emissions mitigation. A cost curve represents the effectiveness of abatement options relative to their costs. Where required, Net Balance combines abatement cost curve modelling with Monte Carlo analysis to provide a clear representation of uncertainty for each abatement option. We use statistical techniques to identify the most significant uncertainties. This assists decision-makers understand if there are cost-effective ways to reduce uncertainty before undertaking investment.
2. Robust decision-making frameworks for climate change adaptation—two things matter for adaptation planning: how much will the climate change? and how big will the damages be? The challenge is that we don’t know the answer to these questions now and it is unlikely that we will ever know the answers accurately enough to make planning for climate adaptation an easy task.

At Net Balance we work closely with clients to help them understand how the risks and uncertainties about future climate change might affect their organisation. Our approach avoids single solutions. We aim to help clients use the best scientific, social and economic information available to identify those adaptation options that work across a wide range of possible climate futures from those that work well under some climate change scenarios but might fail under others. We use qualitative and quantitive tools to help clients understand the trade-offs involved in choosing between alternative adaptation options.