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

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Author Info

  • Suzi Kerr

    ()
    (Motu Economic and Public Policy Research)

  • Joanna Hendy

    ()
    (Motu Economic and Public Policy Research)

  • Emma Brunton

    (Motu Economic and Public Policy Research)

  • Isabelle Sin

    ()
    (Motu Economic and 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.

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Bibliographic Info

Paper provided by Motu Economic and Public Policy Research in its series Working Papers with number 05_08.

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Length: 35 pages
Date of creation: Jun 2005
Date of revision:
Handle: RePEc:mtu:wpaper:05_08

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Related research

Keywords: climate change; land use; social impacts; methane; nitrous oxide; dairy; sheep; beef; distribution of costs; regional;

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References

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  1. 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.
  2. Bovenberg, A.L. & Goulder, L.H. & Gurney, D.J., 2003. "Efficiency Costs of Meeting Industry-Distributional Constraints under Environmental Permits and Taxes," Discussion Paper 2003-86, Tilburg University, Center for Economic Research.
  3. John Creedy & Catherine Sleeman, 2005. "Carbon Taxation, Prices and Welfare in New Zealand," Department of Economics - Working Papers Series 937, The University of Melbourne.
  4. Viv. B Hall & McDermott C. John, 2004. "Regional Business Cycles in New Zealand: Do they exist? What might drive them?," ERSA conference papers ersa04p200, European Regional Science Association.
  5. Poterba, J.M., 1990. "Is The Gasoline Tax Regressive?," Working papers 568, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Jorgenson, D.W. & Slesnick, D. & Wilcoxen, P.J., 1992. "Carbon Taxes and Economic Welfare," Harvard Institute of Economic Research Working Papers 1589, Harvard - Institute of Economic Research.
  7. 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.
  8. 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," Sciences Po publications info:hdl:2441/10084, Sciences Po.
  9. 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 for the Study of Labor (IZA).
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Cited by:
  1. Michelle Poland & David C Maré, 2005. "Defining Geographic Communities," Urban/Regional 0509016, EconWPA.
  2. 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.
  3. 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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