The Productivity Commission has been asked to look at the cost and benefits of moving to a low-carbon economy.
Photo: 123RF
The government wants an assessment of how New Zealand can cut emissions at the least cost to meet its emissions reduction target of 30 percent below 2005 levels by 2030.
"This next step in our climate change work programme will enable us to properly assess the economic trade-offs that we'll need to make to meet our ambitious 2030 Paris Agreement target," Climate Change Minister Paula Bennett said.
Mrs Bennett said New Zealand would have to further reduce emissions after 2030, though the country would also use forest plantings and international emissions reductions units to meet its targets.
The government is already reviewing the Emissions Trading Scheme, which has come under criticism - including from the OECD last month - for not including agriculture.
Emissions from the farming sector make up nearly half of New Zealand's greenhouse gases, the highest share in the OECD.
The government stressed it was taking steps into cutting agricultural emissions through setting up the Global Research Alliance, which has been researching ways to mitigate the emissions from cows and sheep.
It is also encouraging the uptake of electric vehicles and other energy efficiency technologies.
"This complements the work undertaken by the parliamentary cross-party group GLOBE NZ, as well as the government's expert advisory groups on agriculture, forestry and adaptation," Mrs Bennett said.
Finance Minister Steven Joyce said the commission was the appropriate body to "dispassionately" consider ways to shift to a low-carbon economy.
"We look forward to the final report and recommendations for how New Zealand should manage a transition to a lower net emissions economy, while still maintaining and improving the incomes and prosperity of New Zealanders," Mr Joyce said.
The Sustainable Business Council said the move showed the government was serious about meeting its climate change commitments.
"We need to progress the transition to a low-carbon economy in new and innovative ways. Transitioning to a low-emissions economy is a challenge that global business is already actively addressing," Sustainable Business Council executive director Abbie Reynolds said.
"In New Zealand we have strong cross-sector collaboration and action is already under way. This new review will give us more information about where we could be targeting our efforts."
The commission will report back by the end of June next year.
