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

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news