Socio-Economic Impacts of the Agricultural Emissions Trading Scheme

Paper removed Feb. 14, 2013 at author's requestAgribusiness, Environmental Economics and Policy, Land Economics/Use,

Consumer Views on Genetically Modified Crops

Differences in consumer views about genetically modified crops have recently lead to trade disputes between the United States and the countries of the European Union. This paper uses a simple cost-benefit model to examine what factors influence consumer views on modified crops, and analyses them in an attempt to explain the observed difference between the American and European perspectives. Potential socio-economic, health and environmental effects interact with personal beliefs to shape consumer views. It is argued that most of the difference in opinions can be traced back to the lack of accurate information. There is a difference in the perceived costs and benefits of genetically modified crops on the two continents because perceptions of the likelihood and magnitude of their possible effects are different

Natural selection: firm performance following the Canterbury earthquakes

The Canterbury earthquakes in September 2010 and February 2011 caused major upheaval to the people of the region. The second quake killed 185 people, forced many from their homes, and closed Christchurch’s central business district. This paper examines the consequential effects on business in the region, paying particular attention to heterogeneity in firm-level outcomes. Consistent with aggregate statistics, we quantify substantial variation in firm outcomes by industry and by location. In addition, we show that firms’ prior financial viability heavily influenced their chance of survival. Conditional on continuing to operate, average profitability returned to pre-quake levels relatively quickly, albeit subject to reduced inputs. Taken together, these effects support economic models where firm exit is driven by selection on profitability

Modelling Rural Land Use in New Zealand - A Discrete Choice Perspective

The economic model I use to describe landowners’ land use decisions is a standard discrete choice random utility maximization model.1 Land is of heterogeneous quality, and suitability for the various uses depends on (multiple dimensions of) quality. Therefore, at any given time, potential benefits derived from each parcel vary by use. As economic conditions change, production technologies advance and the farmer accumulates human capital, the relative desirability of land use alternatives may change on any parcel. When the top-ranked alternative changes due to these forces, the farmer converts the parcel to a different use. The observed pattern of land use therefore represents a snapshot of outcomes from a dynamic process

Socio-Economic Impacts of the Agricultural Emissions Trading Scheme

The impacts of including the agricultural sector in the New Zealand Emissions Trading Scheme (ETS) depend on how farmers change their behaviour in response to the increased cost of emissions. Yet most analyses of the ETS do not allow for a behavioural response. This paper partially addresses the gap in the literature: it allows for farmers to change their land use to reflect the reduced returns from pastoral agriculture as well as the potential to earn carbon credits for sequestration performed by plantation forestry and scrub. Simulations performed in the Land Use in Rural New Zealand (LURNZ) model allow us to answer questions about the likely spatial and temporal distribution of the socio-economic impacts of the ETS

Rural Land Use and Land Tenure in New Zealand

Private land-use decisions are critical for a broad spectrum of environmental and social outcomes, ranging from water quality and climate change to rural income distribution. I use a large dataset of the land-use decisions of New Zealand landowners to estimate a cross-sectional multinomial logit model of land use. In this model, the optimal land-use choice depends on geophysical attributes of the land, the cost of access to markets, and on land tenure (Māori freehold title versus general freehold title). I employ the estimated relationship in a counterfactual scenario to assess the overall impact of Māori tenure on the willingness of landowners to supply land for the four most important rural uses in the country: dairying; sheep or beef farming; plantation forestry; and an economically unproductive use, scrub. This allows me to conjecture about the environmental implications of New Zealand’s land-tenure system

Yield to Change: Modelling the Land-use Response to Climate-Driven Changes in Pasture Production

In contrast to most economic drivers of land-use change, climate-related drivers display substantial geographic variation. Accounting for this spatial heterogeneity is important in simulations of the land-use response to climate change. I use a discrete choice model to estimate the relationship between pasture yields and rural land use. Land-use predictions from the model respond to climate change through its effects on pasture yields. This econometric model provides the foundation for the development of a new module of the Land Use in Rural New Zealand (LURNZ) model, the Yield Change Module. In addition to enabling simulations of overall land-use change under different climate scenarios, the module also draws on the estimation results to allocate land-use change spatially. I employ the Yield Change Module to perform illustrative mid-century and end-of-century simulations of land use in a climate scenario characterised by a high level of greenhouse gas emissions (RCP 8.5). Yield changes in this scenario lead to an expansion (by nearly 600,000 hectares) of dairy area and a fall (by over 800,000 hectares) of sheep-beef area by the end of the century. The implied rate of land-use change is modest relative to that observed in New Zealand’s recent past

Rural Land Use and Land Tenure in New Zealand

Private land-use decisions are critical for a broad spectrum of environmental and social outcomes, ranging from water quality and climate change to rural income distribution. I use a large dataset of the land-use decisions of New Zealand landowners to estimate a cross-sectional multinomial logit model of land use. In this model, the optimal land-use choice depends on geophysical attributes of the land, the cost of access to markets, and on land tenure (Māori freehold title versus general freehold title). I employ the estimated relationship in a counterfactual scenario to assess the overall impact of Māori tenure on the willingness of landowners to supply land for the four most important rural uses in the country: dairying; sheep or beef farming; plantation forestry; and an economically unproductive use, scrub. This allows me to conjecture about the environmental implications of New Zealand’s land-tenure system

Does money grow on trees? Mitigation under climate policy in a heterogeneous sheep-beef sector

I use simulations from the Land Use in Rural New Zealand model to consider mitigation for different classes of sheep-beef farms under climate policy. Farmers in the model can respond to carbon prices by abandoning or afforesting marginal land. In assessing carbon credits against liabilities, I consider only the income a farmer would be able to get with certainty without taking a carbon price risk. Farmers in intensive farm classes tend to bear the costs of emissions because their opportunity cost of exiting pastoral agriculture is high. The dominant land-use response in more extensive systems is land abandonment or afforestation, depending on location. Less profitable farm classes generally face higher average liabilities in relation to profits, both before and after the land-use response. Results indicate that farmers in North Island hill country may benefit most from afforestation opportunities. In this farm class, income from rewards could offset over half of farmers’ emission liabilities

Land-use Intensity and Greenhouse Gas Emissions in the LURNZ Model

This paper documents the development of new land-use intensity and greenhouse gas (GHG) emissions modules for the Land Use in Rural New Zealand (LURNZ) model. These modules translate simulated land-use outcomes into measures of rural economic activity and greenhouse gas emissions for dairy farming and sheep-beef farming. Emissions in LURNZ include those from livestock as well as from synthetic fertiliser use. We utilise the latest set of emission factors along with information on the distribution of rural activities to model GHG emissions in a spatially and temporally explicit manner. Our results at the national level are approximately consistent with New Zealand’s Greenhouse Gas Inventory