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Environmental and Resource Economics

, Volume 69, Issue 4, pp 763–785 | Cite as

Economic Impacts of Multiple Agro-Environmental Policies on New Zealand Land Use

  • Adam Daigneault
  • Suzie Greenhalgh
  • Oshadhi Samarasinghe
Article

Abstract

This paper investigates the implications of policy on farm income, land use, and the environment when New Zealand landowners face multiple environmental constraints. It also looks at the interaction between climate and nutrient reduction policy and the extent to which one policy can be used to meet the other’s objectives. We use a non-linear, partial equilibrium mathematical programming model of New Zealand land use to assess the economic impacts of climate and water policies at the New Zealand territorial authority level. The spatially explicit agro-environmental economic model estimates changes in land use, agricultural output, land management, and environmental impacts. The policies investigated include a range of carbon prices on land-based emissions ($0–30/tCO\(_{2\mathrm{e}}\)) as well a range of prices on nitrogen leaching from diffuse sources ($0–30/kgN). We estimate that implementing stand-alone greenhouse gas and nutrient emissions reduction policies for the agricultural and forestry sectors will create environmental benefits outside the scope of the policy. However, not all environmental outputs improve, and net farm revenue declines by between 0 and 11%. Simultaneously implementing the two policies results in the desired goals of reductions in nitrogen and greenhouse gas emissions with a marginal economic burden on landowners (i.e. 1–2% additional loss in farm profit relative to a stand-alone policy).

Keywords

Agriculture and forestry modelling Environmental policy Climate change Water quality Greenhouse gas emissions Nutrient leaching 

JEL Classification

Q15 Q52 Q53 

Notes

Acknowledgements

Funding for this research was provided by Landcare Research and the NZ Ministry of Primary Industries. Kanika Jhunjhnuwala provided valuable assistance collecting and formatting data. Anne-Gaelle Ausseil supplied the detailed national-level land use map that underpins this analysis. Michael Hauss developed the model’s spatial interface. We appreciate useful comments from Pike Brown, as well as feedback on a earlier draft from participants at the New Zealand Association of Economists Annual Meeting and the Ohio State University Environmental Policy Initiative Seminar Series. Any remaining errors are ours alone.

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Copyright information

© Springer Science+Business Media Dordrecht 2017

Authors and Affiliations

  • Adam Daigneault
    • 2
  • Suzie Greenhalgh
    • 1
  • Oshadhi Samarasinghe
    • 1
  1. 1.Landcare Research New ZealandAucklandNew Zealand
  2. 2.University of Maine School of Forest ResourcesOronoUSA

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