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Economic Impacts of GHG and Nutrient Reduction Policies in New Zealand: A Tale of Two Catchments

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  • Daigneault, Adam J.
  • Greenhalgh, Suzie
  • Samarasinghe, Oshadhi

Abstract

Agricultural and forestry GHG emissions are a key feature of New Zealand’s emissions profile, and New Zealand is the only country, to date, to have indicated that agricultural and forestry emissions will be covered under their domestic climate policy – the New Zealand Emissions Trading Scheme. Coupled with climate policy development is the increasing scrutiny of agricultural impacts on water. This paper uses New Zealand Forest and Agriculture Regional Model (NZ-FARM) to assess the potential economic and environmental impacts of imposing both a climate and nutrient reduction policy on the agricultural and forestry industries in the Manawatu and Hurunui/Waiau catchments in New Zealand. We find that adding a scheme that reduces catchment-level nutrients by 20% on top of a national policy that puts a price of $25 per ton carbon dioxide equivalent on agricultural GHG emissions could result in greater environmental benefits at a relatively small cost, but the converse is not always true and could be significantly more costly for landowners.

Suggested Citation

  • Daigneault, Adam J. & Greenhalgh, Suzie & Samarasinghe, Oshadhi, 2012. "Economic Impacts of GHG and Nutrient Reduction Policies in New Zealand: A Tale of Two Catchments," 2012 Conference (56th), February 7-10, 2012, Fremantle, Australia 124284, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare12:124284
    DOI: 10.22004/ag.econ.124284
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    References listed on IDEAS

    as
    1. Johansson, Robert & Peters, Mark & House, Robert, 2007. "Regional Environment and Agriculture Programming Model," Technical Bulletins 184314, United States Department of Agriculture, Economic Research Service.
    2. Joanna Hendy & Suzi Kerr & Troy Baisden, 2006. "Greenhouse gas emissions charges and credits agricultural land: what can a model tell us?," Working Papers 06_04, Motu Economic and Public Policy Research.
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    Cited by:

    1. Fraser J. Morgan & Philip Brown & Adam J. Daigneault, 2015. "Simulation vs. Definition: Differing Approaches to Setting Probabilities for Agent Behaviour," Land, MDPI, vol. 4(4), pages 1-24, September.
    2. Suzi Kerr & Simon Anastasiadis & Alex Olssen & William Power & Levente Tímár & Wei Zhang, 2012. "Spatial and Temporal Responses to an Emissions Trading System Covering Agriculture and Forestry: Simulation Results from New Zealand," Working Papers 12_10, Motu Economic and Public Policy Research.
    3. Daigneault, Adam J. & Morgan, Fraser, 2012. "Estimating Impacts of Climate Change Policy on Land Use: An Agent Based Modeling Approach," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124973, Agricultural and Applied Economics Association.
    4. Suzi Kerr, 2013. "Managing Risks and Tradeoffs Using Water Markets," Working Papers 13_13, Motu Economic and Public Policy Research.
    5. Suzi Kerr, 2016. "Agricultural Emissions Mitigation in New Zealand: Answers to Questions from the Parliamentary Commisioner for the Environment," Working Papers 16_16, Motu Economic and Public Policy Research.
    6. Fraser J Morgan & Adam J Daigneault, 2015. "Estimating Impacts of Climate Change Policy on Land Use: An Agent-Based Modelling Approach," PLOS ONE, Public Library of Science, vol. 10(5), pages 1-20, May.

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