Getting the profit pollution balance right

university-of-waikato

Thu Apr 09 2009 12:00:00 GMT+1200 (New Zealand Standard Time)

Getting the profit pollution balance right

Thursday, 9 April 2009, 11:24 am
Press Release: University of Waikato

Media Release
April 9, 2009

A detailed study of Waikato farms in the Karapiro and Arapuni lakes catchment areas shows there’s no one simple solution to improving water quality. On grazing land, the biggest contributor to water pollution is nitrogen from animal urine leaching into groundwater. But the right mix of regulations and incentives to reduce that pollution varies widely from farm to farm.

University of Waikato Management School student Thiagarajah Ramilan, who’s just successfully defended his doctoral thesis before his examiners, has developed a model to calculate what he’s called the profit-pollution frontier for each farm.

The calculation takes into account farm data including income, stock numbers, milk solid production and fertiliser application, as well as production system (intensive or extensive), soil type and topography.

Ramilan found intensive farms faced an average pollution abatement cost of $2.70 for the first 10 kilograms of nitrogen per hectare, while the cost to traditional extensive farms was $31.50. For farms which used a mix of intensive and extensive farming, the average abatement cost was $10.80.

“The model I’ve developed allows us to identify low-cost farms and target particular production systems to reduce pollution in a cost-effective way,” he says.

“I’ve run a series of scenarios and found charges coupled with restrictions are likely to be more cost-efficient than emission charges on their own. It may be that each farm self-selects the most suitable policy or policy combination. So for instance, intensive farms would be more likely to choose a low emission charge and a high target for reducing pollution.”

Advertisement - scroll to continue reading

By providing information for cost comparisons, Ramilan’s model could also encourage trade in nitrogen discharge permits between farms.

“The farms I looked at displayed high levels of technical and economic efficiency, but they weren’t so environmentally efficient,” says Ramilan. “Improving this aspect could reduce nitrogen discharge by more than 500 tonnes over the whole catchment.”

Academic co-supervisor Dr Dan Marsh says Ramilan’s work provides a useful economic approach to what can be a highly-charged and emotive issue. “We all want better water quality, but no-one wants to drive farmers out of business. Ramilan’s model will help policy makers decide the cheapest and most effective solutions for each situation, and that way everybody wins.”

Ramilan is currently working as a policy analyst at the Ministry of Agriculture, Forestry and Fisheries in Wellington.

ENDS

Advertisement - scroll to continue reading

a.supporter:hover {background:#EC4438!important;} @media screen and (max-width: 480px) { #byline-block div.byline-block {padding-right:16px;}}

Using Scoop for work?

Scoop is free for personal use, but you’ll need a licence for work use. This is part of our Ethical Paywall and how we fund Scoop. Join today with plans starting from less than $3 per week, plus gain access to exclusive Pro features.

Join Pro Individual Find out more

Find more from University of Waikato on InfoPages.