Cost and trade impacts of environmental regulations: effluent control and the New Zealand dairy sector |
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| Authors: | Sue M Cassells & Anton D Meister |
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| Institution: | Department of Finance, Banking and Property, Massey University, New Zealand,;Department of Applied and International Economics, Massey University, New Zealand. |
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| Abstract: | New Zealand legislation sets standards for water quality. Nitrogen leaching from dairy effluent compromises these standards, with the consequent move being toward land-based effluent disposal. The cost of this to the dairy sector was estimated and a Computable General Equilibrium (CGE) model (GTAP) was used to investigate the impact of additional production costs on NZ's dairy export trade. Two scenarios were analysed: first, NZ acts unilaterally in imposing water quality regulations, second, the other principal dairy exporters act in a similar fashion. Changes in trade patterns vary from insignificant to large, depending on the scenario analysed. |
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