Three Te Pūnaha Matatini interns report on their 2019-20 summer placement with the Ministry for the Environment, where they piloted a complex systems approach to modelling policy problems.
Shnece Duncan, Ellena Black and Quyen Nguyen
During our internship, we looked at how various aspects of the real economy, the financial system and the environment could be more effectively modelled in order to improve the Ministry for the Environment’s (MfE’s) ability to analyse certain policy issues.
Using a complex systems approach, the models we developed aimed to better understand the cumulative impacts of multiple policies and stressors on the environment and people.
As an example, we developed a simulation model that explored the on-farm adoption of new practices in New Zealand. Each farmer was modelled as a separate agent within neighbourhood and social networks. The farmers were designed to be at different life-cycle stages, producing either sheep, beef, dairy or forestry products, with different decision-making strategies (environmentally friendly or profit-oriented).
During our 10-week internship at MfE, we gained invaluable insights about complex systems and complexity economics. We also gained a better understanding of agent-based models (ABMs), the benefits of ABMs over standard CGE models, and how to code them.
We would like to extend a huge thank you to Te Pūnaha Matatini for this opportunity and also to the MfE, especially senior analyst Jack Bisset, for their support and guidance throughout our internship.
Authors
Shnece Duncan is studying towards a Master of Commerce in Economics at the University of Canterbury. She is excited to apply her background in economics in a real-world situation.
Ellena Black has recently completed an Honours degree in Applied Mathematics at the University of Auckland. Her project involved creating an Agent-Based Model of gas particles that could move around in space and react on a catalytic surface.
Quyen Nguyen is in her second year Finance PhD programme at the University of Otago. Her research interest focuses on the impact of climate change on US loan portfolio valuations. She is interested in applying data science to climate finance.