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Natural disasters give rise to loss and damage and may affect subjective expectations about the prevalence and severity of future disasters. These expectations might then in turn shape individuals’ investment behaviors, potentially affecting their incomes in subsequent years. As part of an emerging literature on endogenous preferences, economists have begun studying the consequences that exposure to natural disasters have on risk attitudes, perceptions, and behavior. We add to this field by studying the impact of being struck by the December 2012 Cyclone Evan on Fijian households’ risk attitudes and subjective expectations about the likelihood and severity of natural disasters over the next 20 years. The randomness of the cyclone’s path allows us to estimate the causal effects of exposure on both risk attitudes and risk perceptions. Our results show that being struck by an extreme event substantially changes individuals’ risk perceptions as well as their beliefs about the frequency and magnitude of future shocks. However, we find sharply distinct results for the two ethnicities in our sample, indigenous Fijians and Indo-Fijians; the impact of the natural disaster aligns with previous results in the literature on risk attitudes and risk perceptions for Indo-Fijians, whereas they have little to no impact on those same measures for indigenous Fijians. [ABSTRACT FROM AUTHOR]

National scale initiatives are being attempted in New Zealand (NZ) to meet important environmental goals following land-use intensification over recent decades. Riparian restoration to filter agricultural spillover effects is currently the most widely practised mitigation measure but few studies have investigated the cumulative value of these practices at a national level. We use an applied economic land use model the benefits (GHG emissions, N leaching, P loss, sedimentation and biodiversity gain) and relevant costs (fencing, alternative stock water supplies, restoration planting and opportunity costs) of restoring riparian margins (5–50 m) on all streams in NZ flowing through current primary sector land. Extensive sensitivity analysis reveals that depending on margin width and cost assumptions, riparian margin restoration generates net benefits of between NZ$1.7 billion – $5.2 billion/yr and benefit-cost ratios ranging between 1.4 and 22.4. This suggests that even when not monetising the increase in biodiversity or components of stream ecosystem health and other benefits from planting riparian strips, the benefits to climate and freshwater are significantly greater than the implementation costs of riparian restoration. [ABSTRACT FROM AUTHOR]

Agriculture is important to New Zealand’s economy. Like other primary producers, New Zealand strives to increase agricultural output while maintaining environmental integrity. Utilising modelling to explore the economic, environmental and land use impacts of policy is critical to understand the likely effects on the sector. Key deficiencies within existing land use and land cover change models are the lack of heterogeneity in farmers and their behaviour, the role that social networks play in information transfer, and the abstraction of the global and regional economic aspects within local-scale approaches. To resolve these issues we developed the Agent-based Rural Land Use New Zealand model. The model utilises a partial equilibrium economic model and an agent-based decision-making framework to explore how the cumulative effects of individual farmer’s decisions affect farm conversion and the resulting land use at a catchment scale. The model is intended to assist in the development of policy to shape agricultural land use intensification in New Zealand. We illustrate the model, by modelling the impact of a greenhouse gas price on farm-level land use, net revenue, and environmental indicators such as nutrient losses and soil erosion for key enterprises in the Hurunui and Waiau catchments of North Canterbury in New Zealand. Key results from the model show that farm net revenue is estimated to increase over time regardless of the greenhouse gas price. Net greenhouse gas emissions are estimated to decline over time, even under a no GHG price baseline, due to an expansion of forestry on low productivity land. Higher GHG prices provide a greater net reduction of emissions. While social and geographic network effects have minimal impact on net revenue and environmental outputs for the catchment, they do have an effect on the spatial arrangement of land use and in particular the clustering of enterprises. [ABSTRACT FROM AUTHOR]

We use a dynamic global forest model to examine how U.S. tax reform could influence forest stocks and carbon sequestration. Scenario analysis estimates several impacts from adjusting current policies that affect timberland investment, area, harvests, and carbon. First, increases in tax rates faced by timberland owners cause timber assets to be revalued downward even though the physical forest is initially unchanged, resulting in substantial declines in both regeneration and management. Second, timber stocks fall over time, reflecting a decrease in investment. Third, tax revenues could increase by nearly $3.4 billion/yr compared to baseline, but at the expense of increasing trade deficits by up to $3.3 billion/yr. Fourth, timberland area could decrease by 12 million hectares. Last, cumulative carbon sequestration over the next 50 years could be reduced by more than 3 billion tCO2e, −22% from the current policy baseline if forestland tax incentives are removed. Fifth, maintaining the existing tax policies in perpetuity incentivizes carbon sequestration levels equivalent to imposing a price of $70/tCO2e on the forest sector, highlighting the ecosystem service benefits of maintaining current tax policy. Finally, we estimate that current US forest tax policy provides about $8 billion/yr in climate change mitigation benefits by 2050. • We model the impact of current forest taxation policy on the U.S. timber sector. • Tax provisions incentivize management, conservation, and carbon sequestration. • U.S. forest carbon could be reduced by 22% if tax provisions are removed. • Current policy equates to a carbon price of $70/tCO 2 e without tax incentives. [ABSTRACT FROM AUTHOR]