The economic way to cleaner water
“Governments…should regularly assess the laws and regulations enacted and the related institutional/ administrative machinery established at the national/ state and local/municipal level in the field of environment and sustainable development, with a view to rendering them effective in practice.”
Article 8.17, Agenda 21, United Nations Earth Summit, 1992.
Good farm practice isn’t going to be enough to bring our rivers and lakes up to the water quality that most of us want. Farm run-off and leaching into groundwater cause serious pollution, but no-one can agree on the best way to share the burden of reducing nitrogen discharges.
Environmental economists Professor Frank Scrimgeour, who is Dean of the Waikato Management School, and Dr Dan Marsh, with PhD student Thiagarajah Ramilan, have developed economic models to figure out the best mix of regulations and incentives to achieve cleaner waterways. The research will help farmers and policy-makers decide the cheapest and most effective solution to enable the farming sector to achieve a future that is both profitable and looks after the environment.
One model takes into account individual farm income, stock numbers, milk solid production and fertiliser application. Initial results suggest that charges coupled with restrictions may be more cost-efficient than emission charges on their own. But the mix will vary from farm to farm: intensive farms would be more likely to choose a low emission charge and a high target for reducing pollution
Research in this area is continuing.
DEPARTMENT OF ECONOMICS
WAIKATO MANAGEMENT SCHOOL