And to overcome the free-rider problem implied by this negative externality there are two key policy approaches – taxes on greenhouse gas emissions, and emissions trading schemes. New Zealand, as part of its obligations under the Kyoto Protocol, has elected an emissions trading scheme.
The labor market is particularly strong, but it is clearly out of balance, with demand for workers substantially exceeding the supply of available workers. Inflation is running well above 2 percent, and high inflation has continued to spread through the economy.