LURNZ - Emissions Trading System: Simulation results from New Zealand

Simulation results for New Zealand of spatial and temporal responses to an emissions trading system covering agriculture and forestry.

This study undertakes simulations using the integrated Land Use in Rural New Zealand (LURNZ) model to analyse the effect of various New Zealand emissions trading scheme (ETS) scenarios on land-use, emissions, and output in a temporally and spatially explicit manner.

It compares 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 also examine the effect of land-use change on the time profile of net emissions from the forestry sector. Our projections for the mid-2020s suggest that under a comprehensive ETS, sequestration associated with new planting could be significant; it may approach 20 percent of national inventory agricultural emissions in 2008.  Most of this is driven by the reward for forestry rather than a liability for agricultural emissions. Finally, we present projections of future agricultural output under various policy scenarios.


In this study two different ETS scenarios have been compared with a baseline scenario using this simulation model. They project land-use change and consequent emissions and production changes across policy scenarios.


Projections of land-share between dairy. sheep and beef, forestry and scrub out until 2030 are calculated and presented both nationally and regionally.

The national land-share projections are also modelled based on three ETS policy scenarios - baseline, ETS without agriculture, a full ETS.


The implications of these land use changes on emissions from the different sectors are then provided.


The work undertaken using the LURNZ model highlights that the economic environment that is not directly related to the ETS is also crucial to future land use decisions.

The simulation model assists in evaluating the relative importance of including agriculture in the ETS. The size of the land-use response depends on how modelling is undertaken for the value of carbon credits to plantation forestry; the simulated reduction in net emissions reflects only the land-use response, as on-farm mitigation is not modeled.  In all of the results of this work, the effect of including agriculture is small relative to the effect from having any ETS at all. 



Associated Models

Land Use in Rural New Zealand (LURNZ)

Land Use in Rural New Zealand (LURNZ) is a computer model that simulates land-use change at a fine spatial scale over the whole country.


Spatial and temporal responses to an emissions trading system covering agriculture and forestry: simulation results from New Zealand

Kerr, S et al: 2010, Motu Economic and Public Policy Research