Synergies between Nutrient Trading Scheme and the New Zealand Greenhouse Gas (GHG) Emissions Trading Scheme (ETS) in the Lake Rotorua Catchment
The intensity of agricultural production affects both nutrient and greenhouse gas emissions. Environmental policy designed to reduce one type of pollution may have complementary effects on the other type. This paper explores this issue in the Lake Rotorua catchment in New Zealand using an agro-environmental economic model, NManager. The Regional Council is planning to implement a nutrient trading scheme (NTS) to reduce nutrient discharges to the lake, especially from non-point sources such as farmland, while at the same time the NZ government is planning the agricultural sector into the GHG emissions trading scheme (ETS). We model the abatement costs, potential level of total cost savings; and environmental impacts of agricultural production under three policy scenarios: the inclusion of agricultural in (1) the nutrient trading market only; (2) the NZ GHG emissions trading scheme (ETS) only; and (3) both the nutrient trading market and the NZ ETS concurrently. We find both analytically and numerically that (i) the total level of GHG mitigation is higher when there exist both the NTS and NZ ETS compared to when there is only a NZ ETS; (ii) the permit price of nutrient discharges is inversely related to the permit price of GHG emissions; and (iii) the total economic profit loss from pollution abatement is lower when GHG emissions and nutrient discharges are managed concurrently compared to the sum of the economic profit loss from regulating GHG emissions and nutrient discharges separately.
|Date of creation:||2012|
|Contact details of provider:|| Web page: http://www.nzares.org.nz/|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Shortle, James S. & Horan, Richard D., 2008. "The Economics of Water Quality Trading," International Review of Environmental and Resource Economics, now publishers, vol. 2(2), pages 101-133, October.
- Newell, Richard G. & Pizer, William A. & Raimi, Daniel, 2012.
"Carbon Markets: Past, Present, and Future,"
dp-12-51, Resources For the Future.
- Woodward, Richard T., 2011.
"Double-dipping in environmental markets,"
Journal of Environmental Economics and Management,
Elsevier, vol. 61(2), pages 153-169, March.
- Daigneault, Adam J. & Greenhalgh, Suzie & Samarasinghe, Oshadhi, 2011. "Estimated Impacts of New Zealand Agriculture Climate Policy: A Tale of Two Catchments," 2011 Conference, August 25-26, 2011, Nelson, New Zealand 115352, New Zealand Agricultural and Resource Economics Society.
- Kelly Lock & Suzi Kerr, 2008. "Nutrient Trading in Lake Rotorua: Overview of a Prototype System," Working Papers 08_02, Motu Economic and Public Policy Research.
- Peter Michaelis, 1992. "Global warming: Efficient policies in the case of multiple pollutants," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(1), pages 61-77, January.
When requesting a correction, please mention this item's handle: RePEc:ags:nzar12:144270. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.