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Spatial and Temporal Responses to an Emissions Trading System Covering Agriculture and Forestry: Simulation Results from New Zealand

Author

Listed:
  • Suzi Kerr

    () (Motu Economic and Public Policy Research)

  • Simon Anastasiadis

    () (Motu Economic and Public Policy Research)

  • Alex Olssen

    () (Motu Economic and Public Policy Research)

  • William Power

    () (GNS Science)

  • Levente Tímár

    () (Motu Economic and Public Policy Research and GNS Science)

  • Wei Zhang

    () (Ministry for Primary Industries)

Abstract

We perform simulations using the integrated Land Use in Rural New Zealand (LURNZ) model to analyse the effect of various New Zealand emissions trading scheme (ETS) scenarios on land-use, emissions, and output in a temporally and spatially explicit manner. We compare the impact of afforestation to the impact of other land-use change on net greenhouse gas emissions, and evaluate the importance of the forestry component of the ETS relative to the agricultural component. We also examine the effect of land-use change on the time profile of net emissions from the forestry sector. Our projections for the mid-2020s suggest that under a comprehensive ETS, sequestration associated with new planting could be significant; it may approach 20 percent of national inventory agricultural emissions in 2008. Most of this is driven by the reward for forestry rather than a liability for agricultural emissions. Finally, we present projections of future agricultural output under various policy scenarios.

Suggested Citation

  • Suzi Kerr & Simon Anastasiadis & Alex Olssen & William Power & Levente Tímár & Wei Zhang, 2012. "Spatial and Temporal Responses to an Emissions Trading System Covering Agriculture and Forestry: Simulation Results from New Zealand," Working Papers 12_10, Motu Economic and Public Policy Research.
  • Handle: RePEc:mtu:wpaper:12_10
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    File URL: http://motu-www.motu.org.nz/wpapers/12_10.pdf
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    References listed on IDEAS

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    1. Ruben N. Lubowski & Andrew J. Plantinga & Robert N. Stavins, 2008. "What Drives Land-Use Change in the United States? A National Analysis of Landowner Decisions," Land Economics, University of Wisconsin Press, vol. 84(4), pages 529-550.
    2. Chomitz, Kenneth M & Gray, David A, 1996. "Roads, Land Use, and Deforestation: A Spatial Model Applied to Belize," World Bank Economic Review, World Bank Group, vol. 10(3), pages 487-512, September.
    3. Richard Hornbeck, 2012. "The Enduring Impact of the American Dust Bowl: Short- and Long-Run Adjustments to Environmental Catastrophe," American Economic Review, American Economic Association, vol. 102(4), pages 1477-1507, June.
    4. Daigneault, Adam J. & Greenhalgh, Suzie & Samarasinghe, Oshadhi, 2012. "Economic Impacts of GHG and Nutrient Reduction Policies in New Zealand: A Tale of Two Catchments," 2012 Conference (56th), February 7-10, 2012, Fremantle, Australia 124284, Australian Agricultural and Resource Economics Society.
    5. Joanna Hendy & Suzi Kerr & Troy Baisden, 2007. "The Land Use in Rural New Zealand Model Version 1 (LURNZv1: Model Description)," Working Papers 07_07, Motu Economic and Public Policy Research.
    6. Elena G. Irwin, 2002. "Interacting agents, spatial externalities and the evolution of residential land use patterns," Journal of Economic Geography, Oxford University Press, vol. 2(1), pages 31-54, January.
    7. Brent Sohngen and Roger Sedjo, 2006. "Carbon Sequestration in Global Forests Under Different Carbon Price Regimes," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 109-126.
    8. Suzi Kerr & Alexander Pfaff & Romina Cavatassi & Benjamin Davis & Leslie Lipper & Arturo Sanchez & Jason Timmins, 2004. "Effects of Poverty on Deforestation: Distinguishing behaviour from location," Working Papers 04-19, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    9. Gerald C. Nelson & GVirginia Harris & Steven W. Stone, 2001. "Deforestation, Land Use, and Property Rights: Empirical Evidence from Darién, Panama," Land Economics, University of Wisconsin Press, vol. 77(2), pages 187-205.
    10. 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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    Cited by:

    1. Thomas Carver & Patrick Dawson & Suzi Kerr, 2017. "Including Forestry in an Emissions Trading Scheme: Lessons from New Zealand," Working Papers 17_11, Motu Economic and Public Policy Research.
    2. Manley, Bruce, 2018. "Forecasting the effect of carbon price and log price on the afforestation rate in New Zealand," Journal of Forest Economics, Elsevier, vol. 33(C), pages 112-120.
    3. Levente Timar & Suzi Kerr, 2014. "Land-use Intensity and Greenhouse Gas Emissions in the LURNZ Model," Working Papers 14_03, Motu Economic and Public Policy Research.
    4. Levente Timar, 2016. "Yield to Change: Modelling the Land-use Response to Climate-Driven Changes in Pasture Production," Working Papers 16_15, Motu Economic and Public Policy Research.
    5. Levente Timar, 2016. "Does money grow on trees? Mitigation under climate policy in a heterogeneous sheep-beef sector," Working Papers 16_09, Motu Economic and Public Policy Research.
    6. Fraser J Morgan & Adam J Daigneault, 2015. "Estimating Impacts of Climate Change Policy on Land Use: An Agent-Based Modelling Approach," PLOS ONE, Public Library of Science, vol. 10(5), pages 1-20, May.

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    More about this item

    Keywords

    land use; land-use change; LURNZ; greenhouse-gas emissions; afforestation; forestry removals; New Zealand Emissions Trading Scheme; integrated modelling; agricultural production;
    All these keywords.

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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