Market-Based Approaches to Pollution Control in the Lake Taupo Catchment in New Zealand

There are at least five general reasons why market-based policies fail to address some of the most basic environmental objectives. This study evaluates the available biophysical and economic data against these criteria and concludes that market-based approaches should be employed cautiously in pollution control under the present system and the available technology for farming in the lake area. The most effective market-based instrument to control pollution, in this case, seems to be negative incentives, as the public net cost of farming is extremely higher than the private net benefits. However, the intensity of taxes that would be effective in this regard would definitely results negative net farm benefits. The principle alternative, emission trading, would be effective with a highly regulated system given long-term political willingness to address the problem effectively.Pollution, Market-based policies, Emission trading, Environmental Economics and Policy,

Valuing Avoided Soil Erosion by Considering Private and Public Net Benefits

The population in New Zealand is expected to increase to over five million by the mid 2020’s from the current level of 4.3 million (Statistics New Zealand, 2009). An increasing demand for primary produce as a result may put pressure on marginal land to be farmed. Understanding the economic value of avoided erosion in New Zealand is therefore an important factor in policy making to optimise the soil related activities in the economy. Establishing a methodology for estimating the economic value of avoided soil erosion is the first step in assessing the problem. This study uses the future forest scenarios developed by Scion to identify potential afforestation areas and thereby compare the current erosion/sedimentation status under current land-use (non woody vegetation) with potential future afforestation. The study aims to quantify the incremental public and private net benefits from the change in scenario. The notion has come under different headings in the literature, such as on-site and off-site erosion effects or sediment and soil erosion effects, all of which recognize the importance of separation of effects to avoid double-counting. The separation into public and private benefits and costs in this case, while avoiding double-counting, will also help identify appropriate policy instruments to avoid soil erosion damage using the private and public net benefit framework (Pannell, 2008).Environmental Economics and Policy, Land Economics/Use,

To fence or not to fence: A partial probit analysis

Based on the results of a probit model estimated from a survey of 1625 farmers from seven major dairying regions in New Zealand, farmers’ attitudes (perception about the overall benefits) appear to be are a major governing factor of waterway fencing in all regions. While fencing in Northland and West Coast regions was lower than elsewhere, owner/operators in those regions tended to fence more than farmers with other types of ownership structures. Environmental issues also appeared to be important; however the level of environmental awareness did not reflect the actual degree of fencing

Market-Based Approaches to Pollution Control in the Lake Taupo Catchment in New Zealand

There are at least five general reasons why market-based policies fail to address some of the most basic environmental objectives. This study evaluates the available biophysical and economic data against these criteria and concludes that market-based approaches should be employed cautiously in pollution control under the present system and the available technology for farming in the lake area. The most effective market-based instrument to control pollution, in this case, seems to be negative incentives, as the public net cost of farming is extremely higher than the private net benefits. However, the intensity of taxes that would be effective in this regard would definitely results negative net farm benefits. The principle alternative, emission trading, would be effective with a highly regulated system given long-term political willingness to address the problem effectively

Creating culturally sustainable agri-environmental schemes

-Evidence is emerging from across Europe that contemporary agri-environmental schemes are having only limited, if any, influence on farmers’ long-term attitudes towards the environment. In this theoretical paper we argue that these approaches are not ‘culturally sustainable’, i.e. the actions are not becoming embedded within farming cultures as part of conventional ‘good farming’ practice. We propose (following Bourdieu) that, in order to culturally embed the environmental values, beliefs and knowledges that underlie such schemes, policy-makers need to devise approaches that allow the creation of cultural and social capital within farming communities – rather than simply compensating for economic capital lost. We outline the theoretical basis of our position and discuss how the contemporary agri-environmental approach of paying for specified environmental management services restricts the ability of such schemes to generate cultural and, thereby, social capital. Finally, we outline two possible ways of accounting for cultural capital in scheme creation: either through the development of measures of cultural capital that enable its incorporation into contemporary economic models or through a major revision to the way we construct and apply agri-environmental schemes.the Foundation for Research Science and Technology, New Zealand, and the Research Council of Norway as part of the AGRIPOL project (in association with the Centre for Rural Research

Economics of supply reliability of irrigation water

In this study, we have assessed the economic impact of potential increase in supply reliability of irrigation water in the Hinds Plains Area in the Ashburton district. The Hinds catchment has a number of irrigation schemes namely, Rangitata Diversion Race (provides water for Mayfield Hinds and Valetta Schemes), Barrhill Chertsey, Eiffelton and Lynford Schemes. All these schemes have varying supply reliability which ranges from 40% to 80% approximately. First, we estimated the relationship between water availability and pasture growth using experimental data. We then employed this relationship to estimate the potential incremental pasture growth with assumed increased supply reliability (95%) at farm level. We estimated the farm level benefit of increased pasture production in terms of saved costs in supplementary feed. These farm level estimates were used to assess the catchment level farm income gain. The catchment level income gain was then employed to assess the regional level economic gain (GDP and employment) by the socio-accounting matrix input-output model (SAMI-O) simulation. Income gain at catchment level is estimated to vary from $16 to$17million. This implies an additional gain in regional level income (GDP) of $85 to$91million and additional employment of 137 FTE to 207 FTE. The study indicates the importance of an increase in irrigation efficiency at farm level for the local and regional economy and also discusses the potential environmental impacts of increase irrigation efficiency at catchment level

Where and how can policy encourage afforestation to avoid soil erosion?

Understanding the economic value of avoided soil erosion in New Zealand is an important factor in policy decision making enabling the acknowledgement of the costs of erosion to the economy. This paper focuses on potential for afforestation to mitigate erosion risks on marginal agricultural hill country lands. Spatial economic modelling is undertaken to determine the net private and public benefit due to the avoided soil erosion from afforesting these areas. The study indicates that in some cases forestry is not viable and thus the public benefit from avoided erosion (and other ecosystem services) will not be forthcoming in these areas. Afforestation of these areas may therefore require positive incentives or improvements in forest and farm systems and technologies, depending on the relative weight of the public and private net benefits

Valuing Avoided Soil Erosion by Considering Private and Public Net Benefits

The population in New Zealand is expected to increase to over five million by the mid 2020’s from the current level of 4.3 million (Statistics New Zealand, 2009). An increasing demand for primary produce as a result may put pressure on marginal land to be farmed. Understanding the economic value of avoided erosion in New Zealand is therefore an important factor in policy making to optimise the soil related activities in the economy. Establishing a methodology for estimating the economic value of avoided soil erosion is the first step in assessing the problem. This study uses the future forest scenarios developed by Scion to identify potential afforestation areas and thereby compare the current erosion/sedimentation status under current land-use (non woody vegetation) with potential future afforestation. The study aims to quantify the incremental public and private net benefits from the change in scenario. The notion has come under different headings in the literature, such as on-site and off-site erosion effects or sediment and soil erosion effects, all of which recognize the importance of separation of effects to avoid double-counting. The separation into public and private benefits and costs in this case, while avoiding double-counting, will also help identify appropriate policy instruments to avoid soil erosion damage using the private and public net benefit framework (Pannell, 2008)