Spatial and Temporal Responses to an Emissions Trading Scheme Covering Agriculture and Forestry: Simulation Results from New Zealand

Abstract

We perform simulations using the integrated Land Use in Rural New Zealand (LURNZ) model to analyze the effect of various New Zealand emissions trading scheme (ETS) scenarios on land use, emissions and output in a temporally and spatially explicit manner. We compare the impact of afforestation to the impact of other land-use change on net greenhouse gas emissions and evaluate the importance of the forestry component of the ETS relative to the agricultural component. We find that the effect of including agriculture in the ETS is small relative to the effect of including forestry. We also examine the effect of land-use change on the time profile of net emissions from the forestry sector. Finally, we present projections of future agricultural output under various policy scenarios.