Search

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.

Highlights • Assessed uncertainty implications on native afforestation feasibility in erodible land. • Complemented a deterministic economic optimisation approach with Monte-Carlo methods. • The socio-cultural circumstances of the native community make low discount rates possible. • Long-rotation species could be feasible at low discount rates and payments for services. • High public environmental investments are required to hedge against climatic uncertainty. Abstract Forestry's long-term nature and associated uncertainties play against its consideration in land-use decisions. This study's objective was assessing the implications of uncertainty on the feasibility of afforesting erodible land with natives. The New Zealand example has global relevance enabling: innovative statistical representation of climatic uncertainty, economic uncertainty analysis due to existing payments for services, and the profitability of long-rotation species due to Māori's socio-cultural aspirations. We complemented a deterministic optimisation approach with Monte-Carlo methods to identify optimal afforestation areas representing uncertainty probabilistically. With stochastic dominance/efficiency tests, relevant to landowners, we identified that the uncertainty and profitability of long-rotation species increase at low discount rates, plausible due to low opportunity costs and inter-generational aspirations (not possible in competitive circumstances). At low discount rates, the high profitability odds of the long-rotation alternative compensate its high uncertainty and make it the preferred one even for highly risk-averse owners. With a probabilistic cost-benefit analysis, relevant to policymakers, we identified that the benefits necessary to cover erosion-reduction investments would need to be higher than expected to hedge against climatic uncertainty. These results were obtained through the uncertainty analysis. The methods/results covered in this study are relevant to land-use studies/models seeking to measure uncertainty impacts simply. [ABSTRACT FROM AUTHOR]