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Potential Scrub Changes and Its Spatial Allocation under the New Zealand Emission Trading System

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  • Zhang, Wei
  • Power, William
  • Kerr, Suzi

Abstract

Under the New Zealand Emission Trading System (NZETS), post-1989 forestry land (the exotic or indigenous forest land that was not used for plantation on 31 December 1989) in New Zealand is eligible for reward for each tonne of CO2-eqv sequestrated by reverting from pasture to indigenous scrub. We use the Land Use in Rural New Zealand (LURNZ) model to conduct 2 simulations assuming that one tonne of CO2-eqv costs $25; The reference case is that no one has entered the NZETS, the other scenario is that the whole agriculture sector and indigenous forest (but not plantation) have entered the ETS. Each simulation estimates the amount of land use changes in dairy, sheep-beef and scrub from 2008 to 2015. By comparing these simulations, we identify the current use and the area of land that may revert to indigenous scrub. The results suggest that 224,000 more hectares of post- 1989 forestry land will be protected into scrub under NZETS than without the system. After applying a land use allocation algorithm, the most likely reversion may take place on marginal sheep-beef land.

Suggested Citation

  • Zhang, Wei & Power, William & Kerr, Suzi, 2009. "Potential Scrub Changes and Its Spatial Allocation under the New Zealand Emission Trading System," 2009 Conference, August 16-22, 2009, Beijing, China 50896, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae09:50896
    DOI: 10.22004/ag.econ.50896
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    References listed on IDEAS

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    1. Hendy, Joanna & Kerr, Suzi & Baisden, Troy, 2007. "The Land Use in Rural New Zealand Model Version 1 (LURNZv1): Model Description," Motu Working Papers 292843, Motu Economic and Public Policy Research.
    2. Hendy, Joanna & Kerr, Suzi, 2005. "Greenhouse Gas Emission Factor Module: Land Use in Rural New Zealand—Climate Version 1," 2005 Conference, August 26-27, 2005, Nelson, New Zealand 98501, New Zealand Agricultural and Resource Economics Society.
    3. Suzi Kerr & Andrew Sweet, 2008. "Inclusion of Agriculture and Forestry in a Domestic Emissions Trading Scheme: New Zealand's Experience to Date," Motu Working Papers 08_04, Motu Economic and Public Policy Research.
    4. Stavins, Robert N & Jaffe, Adam B, 1990. "Unintended Impacts of Public Investments on Private Decisions: The Depletion of Forested Wetlands," American Economic Review, American Economic Association, vol. 80(3), pages 337-352, June.
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