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Agricultural and forestry GHG emissions are a key feature of New Zealand’s emissions profile, and New Zealand is the only country, to date, to have indicated that agricultural and forestry emissions will be covered under their domestic climate policy – the New Zealand Emissions Trading Scheme. Coupled with climate policy development is the increasing scrutiny of agricultural impacts on water. This paper uses New Zealand Forest and Agriculture Regional Model (NZ-FARM) to assess the potential economic and environmental impacts of imposing both a climate and nutrient reduction policy on the agricultural and forestry industries in the Manawatu and Hurunui/Waiau catchments in New Zealand. We find that adding a scheme that reduces catchment-level nutrients by 20% on top of a national policy that puts a price of $25 per ton carbon dioxide equivalent on agricultural GHG emissions could result in greater environmental benefits at a relatively small cost, but the converse is not always true and could be significantly more costly for landowners.

This paper uses responses from a regional farmer survey that identify farmers’ perceptions of environmental policies to calibrate a catchment-level environmental economic model (NZ-FARM) to estimate the impacts of a nutrient reduction policy in North Canterbury, New Zealand. The model maximizes farm income across a catchment, accounting for changes in land use, farm output, nutrient leaching, and GHG emissions. Simulations estimate that reducing nutrient loads by 15–30% can be achieved with economic impacts ranging between 1 and 10%, based on how willing landowners are to change how they manage their farm. Farmers are often hesitant to implement certain mitigation options, however, which results in higher economic costs than the ‘optimal’ estimates. Farm-level impacts will likely vary through the current farm practice, the farmers’ attitude towards the regulation, and the ability of policymakers to educate and incentivise landowners to adopt a variety of land management options.

Agricultural and forestry GHG emissions are a key feature of New Zealand’s emissions profile, and New Zealand is the only country, to date, to have indicated that agricultural and forestry emissions will be covered under their domestic climate policy – the New Zealand Emissions Trading Scheme. Coupled with climate policy development is the increasing scrutiny of agricultural impacts on water. This paper uses New Zealand Forest and Agriculture Regional Model (NZ-FARM) to assess the potential economic and environmental impacts of imposing both a climate and nutrient reduction policy on the agricultural and forestry industries in the Manawatu and Hurunui/Waiau catchments in New Zealand. We find that adding a scheme that reduces catchment-level nutrients by 20% on top of a national policy that puts a price of $25 per ton carbon dioxide equivalent on agricultural GHG emissions could result in greater environmental benefits at a relatively small cost, but the converse is not always true and could be significantly more costly for landowners.

This paper uses an economic catchment model to assess changes in land use, enterprise distribution, greenhouse gas emissions and nutrient loading levels from a series of policies that introduce carbon prices or nutrient reduction caps on land-based production in the Hurunui Catchment in Canterbury, New Zealand. At $20/tCO2e, net revenue for the catchment is reduced by 7% from baseline levels while GHGs are reduced by 3%. At $40/ tCO2e, net revenue is reduced by 15% while GHGs are reduced by 21%. Nitrogen and phosphorous loading levels within the catchment were also reduced when landowners face a carbon price, thus providing other benefits to the environment. Additional scenarios in this paper assess the impacts from developing a large-scale irrigation project within the catchment. Results show that while adding irrigation can improve farm output and revenue, it also results in dramatically higher GHG emissions and nutrient loads. Placing a carbon price on land-based activities diminishes some of these pollutants, but not at the same rate as when the policy what enacted on the baseline irrigation levels. Finally, we investigate the impacts of imposing a nutrient loading cap on farm activities instead of a carbon price and find that if landowners had greater access to irrigation but were constrained to hold the nutrient loads at baseline levels, revenue could increase by 6% over the baseline while GHG emissions could be reduced by 5%. Our findings suggest that while there is a potentially a strong trade-off between water quantity and water quality in the Hurunui Catchment, imposing the right policy levers could reduce some of the environmental impacts from an increase in land-use intensity without placing a large economic or regulatory burden on its landowners.

Agricultural and forestry greenhouse gas (GHG) emissions are a key feature of New Zealand’s emissions profile, and New Zealand is the only country, to date, to have indicated that agricultural and forestry emissions will be covered under their domestic climate policy – the New Zealand Emissions Trading Scheme (NZETS). Forestry entered the NZETS in 2008 while agricultural emissions are expected to enter in 2015. Coupled with climate policy development is the increasing scrutiny of agricultural impacts on water in New Zealand. Given the multiple forms of environmental regulation facing the agricultural and forestry industries we explore, at the catchment level, the impacts of climate policy on the agricultural and forestry industries, including those on farm returns, GHG emissions, carbon sequestration, water quality and induced land use change. We use the recently developed New Zealand Forest and Agriculture Regional Model (NZ-FARM) to assess potential economic and environmental impacts of a climate policy that imposes a series of carbon prices on GHG emissions of land-based production in the Manawatu and Hurunui/Waiau catchments in New Zealand.