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

  • 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)

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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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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  1. John Creedy & Catherine Sleeman, 2004. "Carbon Taxation, Prices and Welfare in New Zealand," Treasury Working Paper Series 04/23, New Zealand Treasury.
  2. 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.
  3. Steven Stillman, 2005. "Examining Changes in the Value of Rural Land in New Zealand between 1989 and 2003," Urban/Regional 0509015, EconWPA.
  4. 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.
  5. A. Lans Bovenberg & Lawrence H. Goulder & Derek J. Gurney, 2005. "Efficiency Costs of Meeting Industry-Distributional Constraints Under Environmental Permits and Taxes," RAND Journal of Economics, The RAND Corporation, vol. 36(4), pages 950-970, Winter.
  6. James M. Poterba, 1991. "Is the Gasoline Tax Regressive?," NBER Chapters, in: Tax Policy and the Economy, Volume 5, pages 145-164 National Bureau of Economic Research, Inc.
  7. 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.
  8. Viv B. Hall & C. John McDermott, 2007. "Regional business cycles in New Zealand: Do they exist? What might drive them?," Papers in Regional Science, Wiley Blackwell, vol. 86(2), pages 167-191, 06.
  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).
  10. 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," Post-Print hal-01020761, HAL.
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