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Trade liberalisation and greenhouse gas emissions: the case of dairying in the European Union and New Zealand

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  • Caroline Saunders
  • Anita Wreford
  • Selim Cagatay

Abstract

The link between trade and the environment has aroused considerable interest both in terms of the impact of trade liberalisation on the environment, and also the impact of environmental policy on production and trade. Of key environmental concern at present is global warming and its association with greenhouse gas emissions. Agriculture is a sector of the economy that both contributes to, and will be affected by, climate change. This paper models the impact of agricultural trade liberalisation on greenhouse gas emissions from agriculture around the world, focusing particularly on the effects on New Zealand, a small economy highly dependent on agricultural trade. A partial equilibrium agricultural multicountry, multicommodity trade model is used for the analysis, extended to include physical production systems and their greenhouse gas emissions. Two simulations are performed: removal of agricultural policies in the EU and in all OECD countries. The results indicate that although producer returns in New Zealand increase, greenhouse gas emissions also increase significantly. EU producers face lower returns but also lower greenhouse gas emissions. Copyright 2006 The Authors Journal compilation 2006 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Ltd .

Suggested Citation

  • Caroline Saunders & Anita Wreford & Selim Cagatay, 2006. "Trade liberalisation and greenhouse gas emissions: the case of dairying in the European Union and New Zealand ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(4), pages 538-555, December.
    • Handle: RePEc:bla:ajarec:v:50:y:2006:i:4:p:538-555
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    3. Caroline Saunders & Selim Cagatay, 2003. "Commercial release of first‐generation genetically modified food products in New Zealand: using a partial equilibrium trade model to assess the impact on producer returns in New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(2), pages 233-259, June.
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    7. Saunders, Caroline M. & Cagatay, Selim, 2003. "Commercial release of first-generation genetically modified food products in New Zealand: using a partial equilibrium trade model to assess the impact on producer returns in New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(2), pages 1-27, June.
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    Cited by:

    1. Yangyuyu Luo & Sayeeda Bano, 2020. "Modelling New Zealand dairy products: evidence on export survival and duration," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 605-631, July.
    2. Saunders, Caroline & Guenther, Meike & Tait, Peter & Saunders, John, 2013. "Consumer attitudes and willingness to pay for attributes of food, in particular from New Zealand," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 158378, Australian Agricultural and Resource Economics Society.
    3. Cemal Atici, 2008. "Agricultural Policies and Environmental Interaction in OECD Contries," ICER Working Papers 26-2008, ICER - International Centre for Economic Research.
    4. Panxian Wang & Zimeng Ren & Guanghua Qiao, 2023. "How Does Agricultural Trade Liberalization Have Environmental Impacts? Evidence from a Literature Review," Sustainability, MDPI, vol. 15(12), pages 1-18, June.
    5. Çağatay, Selim & Taşdoğan, Celal & Özeş, Reyhan, 2017. "Analysing the impact of targeted bio-ethanol blending ratio in Turkey," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 6(2), September.
    6. Saunders, Caroline & Guenther, Meike & Tait, Peter & Saunders, John, 2013. "Assessing consumer preferences and willingness to pay for NZ food attributes in China, India and the UK," 87th Annual Conference, April 8-10, 2013, Warwick University, Coventry, UK 158381, Agricultural Economics Society.
    7. Atici, Cemal, 2009. "Pollution without subsidy? What is the environmental performance index overlooking?," Ecological Economics, Elsevier, vol. 68(7), pages 1903-1907, May.
    8. Saunders, Caroline & Guenther, Meike & Tait, Peter & John, Saunders, 2013. "Consumer attitudes towards and willingness to pay for NZ food attributes in the UK, China and India and the impact on NZ producer returns," 2013 Conference, August 28-30, 2013, Christchurch, New Zealand 160561, New Zealand Agricultural and Resource Economics Society.
    9. Jámbor, Attila & Balogh, Jeremiás Máté, 2020. "Az agrárkereskedelem környezeti hatásainak vizsgálata szisztematikus szakirodalmi áttekintés segítségével [Investigating environmental effects of agricultural trade through a systematic review of t," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 930-949.
    10. Jeremiás Máté Balogh & Attila Jámbor, 2020. "The Environmental Impacts of Agricultural Trade: A Systematic Literature Review," Sustainability, MDPI, vol. 12(3), pages 1-16, February.
    11. Lennox, James A. & Andrew, Robbie & Forgie, V., 2008. "Price effects of an emissions trading scheme in New Zealand," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6678, European Association of Agricultural Economists.
    12. Yekimov Sergiy, 2023. "Study of the problem of reducing greenhouse gas emissions in agricultural production Czech Republic," Papers 2305.13253, arXiv.org.
    13. Shuddhasattwa Rafiq & Ruhul Salim & Nicholas Apergis, 2016. "Agriculture, trade openness and emissions: an empirical analysis and policy options," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 60(3), pages 348-365, July.
    14. Hirokazu Akahori & Daisuke Sawauchi & Yasutaka Yamamoto, 2017. "Measuring the Changes of Greenhouse Gas Emissions Caused by the Trans-Pacific Partnership," Sustainability, MDPI, vol. 9(5), pages 1-12, April.

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