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The Cost and Trade Impacts of Environmental Regulations: Effluent Controls and the New Zealand Dairy Sector


  • Cassells, Sue M.
  • Meister, Anton D.
  • Rae, Allan N.


In New Zealand the Resource Management Act 1991 has put standards in place regarding surface and ground water quality. Nitrogen leaching from dairy effluent compromises these standards; consequently the nation-wide aim is to have all dairy farms operating land-based effluent disposal. An estimate has been made of the cost of this to the New Zealand dairy sector. An Applied General Equilibrium approach (GTAP) is used to look at the possible impact of these additional production costs on New Zealand’s dairy export trade. This analysis is conducted under two scenarios, the first being that New Zealand acts unilaterally in imposing water quality regulations. The second scenario assumes that New Zealand’s three main dairy export competitors, the EU, Australia, and the US also enforce their own water quality regulations and internalise the cost of such regulations.

Suggested Citation

  • Cassells, Sue M. & Meister, Anton D. & Rae, Allan N., 2000. "The Cost and Trade Impacts of Environmental Regulations: Effluent Controls and the New Zealand Dairy Sector," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123618, Australian Agricultural and Resource Economics Society.
  • Handle: RePEc:ags:aare00:123618

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    References listed on IDEAS

    1. Leuck, Dale J. & Haley, Stephen L. & Liapis, Peter S. & McDonald, Bradley, 1995. "The EU Nitrate Directive and CAP Reform: Effects on Agricultural Production, Trade and Residual Soil Nitrogen," Foreign Agricultural Economic Report (FAER) 148007, United States Department of Agriculture, Economic Research Service.
    2. Xinpeng Xu, 1998. "Export Performance of Environmentally Sensitive Goods: A Global Perspective?," Asia Pacific Economic Papers 278, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
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