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The likely regional impacts of an agricultural emissions policy in New Zealand: Preliminary analysis

Author

Listed:
  • Isabelle Sin

    (Motu Economic & Public Policy Research)

  • Emma Brunton

    (Motu Economic & Public Policy Research)

  • Joanna Hendy

    (Motu Economic & Public Policy Research)

  • Suzi Kerr

    (Motu Economic & Public Policy Research)

Abstract
Hendy and Kerr (2005b) find that an emissions charge on agricultural methane and nitrous oxide of $25 per tonne of carbon dioxide (CO2) equivalent would be likely to reduce New Zealand’s net land-use related emissions for commitment period one in the order of 3%, with full accounting. The costs per farmer and as a percentage of profit would be very high. This paper considers the regional impacts of such a policy in New Zealand by allocating the emission charge across space according to the location of animals. We then combine our emissions charge information with data on the socio-economic characteristics of the affected areas. Obviously rural areas are heavily affected. In many respects, for example median income, ethnic mix, and percentage of working people with a university degree, the rural areas most affected have very similar socio-economic characteristics to other parts of rural New Zealand. Only in two ways do they appear to differ. Our findings indicate that areas with high emission costs tend to have high employment rates, but that they also have a disproportionately high number of unqualified people.

Suggested Citation

  • Isabelle Sin & Emma Brunton & Joanna Hendy & Suzi Kerr, 2005. "The likely regional impacts of an agricultural emissions policy in New Zealand: Preliminary analysis," Others 0509010, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpot:0509010
    Note: Type of Document - pdf; pages: 35
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/othr/papers/0509/0509010.pdf
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    References listed on IDEAS

    as
    1. James M. Poterba, 1991. "Is the Gasoline Tax Regressive?," NBER Chapters, in: Tax Policy and the Economy, Volume 5, pages 145-164, National Bureau of Economic Research, Inc.
    2. Viv B. Hall & C. John McDermott, 2007. "Regional business cycles in New Zealand: Do they exist? What might drive them?," Papers in Regional Science, Wiley Blackwell, vol. 86(2), pages 167-191, June.
    3. repec:hal:wpspec:info:hdl:2441/10084 is not listed on IDEAS
    4. Dale W. Jorgenson & Daniel T. Slesnick & Peter J. Wilcoxen, 1992. "Carbon Taxes and Economic Welfare," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1992 Micr), pages 393-454.
    5. Steven Stillman, 2005. "Examining Changes in the Value of Rural Land in New Zealand between 1989 and 2003," Working Papers 05_07, Motu Economic and Public Policy Research.
    6. Rudiger Dornbusch & James M. Poterba (ed.), 1991. "Global Warming: Economic Policy Responses," MIT Press Books, The MIT Press, edition 1, volume 1, number 026204126x, April.
    7. A. Lans Bovenberg & Lawrence H. Goulder & Derek J. Gurney, 2005. "Efficiency Costs of Meeting Industry-Distributional Constraints Under Environmental Permits and Taxes," RAND Journal of Economics, The RAND Corporation, vol. 36(4), pages 950-970, Winter.
    8. Creedy, John & Sleeman, Catherine, 2006. "Carbon taxation, prices and welfare in New Zealand," Ecological Economics, Elsevier, vol. 57(3), pages 333-345, May.
    9. James M. Poterba, 1991. "Tax Policy to Combat Global Warming: On Designing a Carbon Tax," NBER Working Papers 3649, National Bureau of Economic Research, Inc.
    10. Antonio M Bento & Lawrence H Goulder & Emeric Henry & Mark R Jacobsen & Roger H. Von Haefen, 2005. "Distributional and Efficiency Impacts of Gasoline Taxes: An Econometrically Based Multi-market Study," Post-Print hal-01020761, HAL.
    11. Antonio M. Bento & Lawrence H. Goulder & Emeric Henry & Mark R. Jacobsen & Roger H. von Haefen, 2005. "Distributional and Efficiency Impacts of Gasoline Taxes: An Econometrically Based Multi-market Study," American Economic Review, American Economic Association, vol. 95(2), pages 282-287, May.
    12. repec:hal:spmain:info:hdl:2441/10084 is not listed on IDEAS
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    14. Papps, Kerry L. & Newell, James O., 2002. "Identifying Functional Labour Market Areas in New Zealand: A Reconnaissance Study Using Travel-to-Work Data," IZA Discussion Papers 443, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Levente Timar, 2016. "Does money grow on trees? Mitigation under climate policy in a heterogeneous sheep-beef sector," Working Papers 16_09, Motu Economic and Public Policy Research.
    2. Michelle Poland & David C Maré, 2005. "Defining Geographic Communities," Urban/Regional 0509016, University Library of Munich, Germany.
    3. Joanna Hendy & Suzi Kerr & Troy Baisden, 2007. "The Land Use in Rural New Zealand Model Version 1 (LURNZv1: Model Description)," Working Papers 07_07, Motu Economic and Public Policy Research.
    4. 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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    More about this item

    Keywords

    climate change; land use; social impacts; methane; nitrous oxide; dairy; sheep; beef; distribution of costs; regional;
    All these keywords.

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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