Price effects of an emissions trading scheme in New Zealand

James Lennox, Robbie Andrew and V. Forgie

No 6678, 107th Seminar, January 30-February 1, 2008, Sevilla, Spain from European Association of Agricultural Economists

Abstract: Implementation of a New Zealand Emission Trading Scheme (NZ ETS) will begin in 2008, beginning with forestry, subsequently including energy and industrial emissions, and finally, agricultural GHGs from 2013. Reducing agricultural emissions is a major challenge for New Zealand as they account for over half its total GHG emissions. On the other hand, agriculture is critical to the economy, with its basic and processed products accounting for a third of exports. We use an environmental input-output model to analyse direct and indirect cost impacts of emissions pricing on food and fibre sectors. At NZ $25/t CO₂-eq, costs of energy-related emissions on the food and fibre sectors are very small; however, costs of agricultural emissions post 2013 would substantially impact on sheep, beef and dairy farming. Costeffective mitigation measures and land use changes should help reduce micro- and macroeconomic impacts, but the latter may also risk 'emissions leakage'.

Keywords: Demand and Price Analysis; Environmental Economics and Policy; Land Economics/Use (search for similar items in EconPapers)
Pages: 18
Date: 2008
New Economics Papers: this item is included in nep-ene and nep-env
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa107:6678

DOI: 10.22004/ag.econ.6678

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