Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Paying farmers not to pollute

Paying farmers not to pollute


Providing incentives to farmers not to pollute could be more effective than fining them when they do says University of Waikato economist Professor Les Oxley.

He has some ideas about managing freshwater resources, but says agriculture should not have to bear all of the costs when the benefits are more widespread. He’ll be expanding on his ideas at a public seminar at this year’s National Fieldays at Mystery Creek.

Professor Les Oxley says one way to tackle fresh water pollution would be to create a set of incentives that encouraged people not to pollute waterways.

“Let me be a little more radical and say rather than simply punish the farmers for polluting, let’s consider paying them not to. We would still retain the fundamental environmental law principle of 'polluter pays' if they do pollute, but let’s give them an incentive not to do the things we don’t want them to do, rather than punishing them for doing the things that they may decide to do, simply because they’re interested in production rather than profit.”

Professor Oxley says economists understand incentives and how to achieve certain actions by encouraging people to do things that we actually want them to do, rather than telling them what to do or not to do. “Economists try to find solutions where there are fewer or even no losers.”

Water differs from other commodities such as petrol or electricity, he says. “Because these things have a price you pay when you want more, and you can identify what your preference for these things is by how much you’re prepared to pay for it.”

With water, it is effectively a free resource for many people (aside from a fixed annual charge), and they can use as much as they want.

“Not surprisingly, people’s use of water reflects the price that they are actually facing when they want more, in this case, zero. Where's the incentive to economise on water use here?”

However, when there are water shortages, “it leads to some sort of dictat from the regional council that says it’s a hose pipe ban. What do your neighbours do? They turn their hoses on at night when no one is watching”.

Telling people to do the right thing doesn’t necessarily always work. “In the water market, understanding why we have supply constraints, understanding the effects of urbanisation, understanding the costs of infrastructure on that supply, and its interaction with those living in the cities, with those working on the land, with those creating output for us to share, those interactions
are markets.

“If it’s profitable for them (farmers) not to pollute and we made it even more profitable by giving them a subsidy, then that solution is both radical and different but the reality is it’s incentive-compatible with what we want farmers to do. Punishment is ex-post, (and we would still have this for
those that do offend) whereas these are ex-ante attempts to change behaviour,” he says.

Professor Oxley will be speaking at Fieldays on Friday June 13 at 12:45 – 1:30pm.

Ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Onetai Station: Overseas Investment Office Puts Ceol & Muir On Notice

The Overseas Investment Office (OIO) has issued a formal warning to Ceol & Muir and its owners, Argentinian brothers Rafael and Federico Grozovsky, for failing to provide complete and accurate information when they applied to buy Onetai Station in 2013. More>>

ALSO:

Tomorrow, The UN: Feds President Takes Reins At World Farming Body

Federated Farmers president Dr William Rolleston has been appointed acting president of the World Farmers’ Organisation (WFO) at a meeting in Geneva overnight. More>>

ALSO:

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news