The impacts of climate change threaten the productivity, incomes and well-being of all humanity. Climate change has been described as the ‘greatest market failure the world has ever seen’. In 2017 the government asked the Productivity Commission to ‘identify options for how New Zealand could reduce its domestic greenhouse gas emissions through a transition to a lower emissions future, while at the same time continuing to grow incomes and wellbeing’. New Zealand can achieve a successful low-emissions economy, but there will be challenges. The commission’s recently released draft report provides insights into how and where the country can best achieve emission reductions and the types of policies and institutional architecture required to drive the transition.