Synergies between Nutrient Trading Scheme and the New Zealand Greenhouse Gas (GHG) Emissions Trading Scheme (ETS) in the Lake Rotorua Catchment
AbstractThe intensity of agricultural production affects both nutrient and greenhouse gas emissions. Environmental policy designed to reduce one type of pollution may have complementary effects on the other type. This paper explores this issue in the Lake Rotorua catchment in New Zealand using an agro-environmental economic model, NManager. The Regional Council is planning to implement a nutrient trading scheme (NTS) to reduce nutrient discharges to the lake, especially from non-point sources such as farmland, while at the same time the NZ government is planning the agricultural sector into the GHG emissions trading scheme (ETS). We model the abatement costs, potential level of total cost savings; and environmental impacts of agricultural production under three policy scenarios: the inclusion of agricultural in (1) the nutrient trading market only; (2) the NZ GHG emissions trading scheme (ETS) only; and (3) both the nutrient trading market and the NZ ETS concurrently. We find both analytically and numerically that (i) the total level of GHG mitigation is higher when there exist both the NTS and NZ ETS compared to when there is only a NZ ETS; (ii) the permit price of nutrient discharges is inversely related to the permit price of GHG emissions; and (iii) the total economic profit loss from pollution abatement is lower when GHG emissions and nutrient discharges are managed concurrently compared to the sum of the economic profit loss from regulating GHG emissions and nutrient discharges separately.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by New Zealand Agricultural and Resource Economics Society in its series 2012 Conference, August 31, 2012, Nelson, New Zealand with number 144270.
Date of creation: 2012
Date of revision:
Greenhouse gas; environmental markets; nutrient trading; emissions; interactions; Agribusiness; Environmental Economics and Policy; Farm Management; Land Economics/Use; Research Methods/ Statistical Methods; Resource /Energy Economics and Policy;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daigneault, Adam J. & Greenhalgh, Suzie & Samarasinghe, Oshadhi, 2011. "Estimated Impacts of New Zealand Agriculture Climate Policy: A Tale of Two Catchments," 2011 Conference, August 25-26, 2011, Nelson, New Zealand 115352, New Zealand Agricultural and Resource Economics Society.
- Shortle, James S. & Horan, Richard D., 2008. "The Economics of Water Quality Trading," International Review of Environmental and Resource Economics, now publishers, vol. 2(2), pages 101-133, October.
- Kelly Lock & Suzi Kerr, 2008. "Nutrient Trading in Lake Rotorua: Overview of a Prototype System," Working Papers 08_02, Motu Economic and Public Policy Research.
- Woodward, Richard T., 2011.
"Double-dipping in environmental markets,"
Journal of Environmental Economics and Management,
Elsevier, vol. 61(2), pages 153-169, March.
- Richard G. Newell & William A. Pizer & Daniel Raimi, 2012.
"Carbon Markets: Past, Present, and Future,"
NBER Working Papers
18504, National Bureau of Economic Research, Inc.
- Peter Michaelis, 1992. "Global warming: Efficient policies in the case of multiple pollutants," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 2(1), pages 61-77, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.