The Likely Regional Impacts of an Agricultural Emissions Policy in New Zealand: Preliminary Analysis

Motu Working Paper No. 05-08

35 Pages Posted: 26 Jun 2006

See all articles by Isabelle Sin

Isabelle Sin

affiliation not provided to SSRN

Emma Brunton

affiliation not provided to SSRN

Joanna Hendy

Motu Economic and Public Policy Research

Suzi Kerr

Motu Economic and Public Policy Research Trust

Date Written: June 2005

Abstract

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.

Keywords: climate change, land use, social impacts, methane, nitrous oxide, dairy, sheep, beef, distribution of costs, regional

JEL Classification: Q25, Q28, R14

Suggested Citation

Sin, Isabelle and Brunton, Emma and Hendy, Joanna and Kerr, Suzi, The Likely Regional Impacts of an Agricultural Emissions Policy in New Zealand: Preliminary Analysis (June 2005). Motu Working Paper No. 05-08. Available at SSRN: https://ssrn.com/abstract=911069 or http://dx.doi.org/10.2139/ssrn.911069

Isabelle Sin (Contact Author)

affiliation not provided to SSRN ( email )

No Address Available

Emma Brunton

affiliation not provided to SSRN ( email )

No Address Available

Joanna Hendy

Motu Economic and Public Policy Research ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

Suzi Kerr

Motu Economic and Public Policy Research Trust ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand
+64 4 383 4250 (Phone)
+64 4 383 4270 (Fax)

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