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Market-Based Approaches to Pollution Control in the Lake Taupo Catchment in New Zealand

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Author Info
Paragahawewa, Upananda H
Abstract

There are at least five general reasons why market-based policies fail to address some of the most basic environmental objectives. This study evaluates the available biophysical and economic data against these criteria and concludes that market-based approaches should be employed cautiously in pollution control under the present system and the available technology for farming in the lake area. The most effective market-based instrument to control pollution, in this case, seems to be negative incentives, as the public net cost of farming is extremely higher than the private net benefits. However, the intensity of taxes that would be effective in this regard would definitely results negative net farm benefits. The principle alternative, emission trading, would be effective with a highly regulated system given long-term political willingness to address the problem effectively.

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Publisher Info
Paper provided by New Zealand Agricultural and Resource Economics Society in its series 2006 Conference, August 24-25, 2006, Nelson, New Zealand with number 31975.

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Date of creation: 2006
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Handle: RePEc:ags:nzasin:31975

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Web page: http://www.nzares.org.nz/
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Related research
Keywords: Pollution; Market-based policies; Emission trading; Environmental Economics and Policy;

References listed on IDEAS
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  1. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-74, December. [Downloadable!] (restricted)
    Other versions:
  2. Gustafsson, Bo, 1998. "Scope and limits of the market mechanism in environmental management," Ecological Economics, Elsevier, vol. 24(2-3), pages 259-274, February. [Downloadable!] (restricted)
  3. Frank Ackerman & Kevin Gallagher, 2001. "Getting the Prices Wrong: The Limits of Market-Based Environmental Policy," Development and Comp Systems 0106005, EconWPA. [Downloadable!]
  4. Segerson, Kathleen & Wu, JunJie, 2006. "Nonpoint pollution control: Inducing first-best outcomes through the use of threats," Journal of Environmental Economics and Management, Elsevier, vol. 51(2), pages 165-184, March. [Downloadable!] (restricted)
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  5. Richard Howarth & Richard Norgaard, 1993. "Intergenerational transfers and the social discount rate," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 3(4), pages 337-358, August. [Downloadable!] (restricted)
  6. Solow, Robert M, 1986. " On the Intergenerational Allocation of Natural Resources," Scandinavian Journal of Economics, Blackwell Publishing, vol. 88(1), pages 141-49.
  7. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June. [Downloadable!] (restricted)
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