Niven Winchester

The Impact of Regulatory Heterogeneity on Agri-food Trade

We estimate the impact of regulatory heterogeneity on agri-food trade using a gravity analysis that relies on detailed data on non-tariff measures (NTMs) collected by the NTM-Impact project. The data cover a broad range of import requirements for agricultural and food products for the EU and nine of its major trade partners. We find that trade is significantly reduced when importing countries have stricter maximum residue limits (MRLs) for plant products than exporting countries. For most other measures, due to their qualitative nature, we were unable to infer whether the importer has stricter standards relative to the exporter, and we do not find a robust relationship between these measures and trade. Our findings suggest that, at least for some import standards, harmonising regulations will increase trade. We also conclude that tariff reductions remain an effective means to increase trade even when NTMs abound.

Will Border Carbon Adjustments Work

Abstract The potential for greenhouse gas (GHG) restrictions in some nations to increased emissions in other nations, or leakage, is a contentious issue in climate change negotiations. We evaluate the impact of border carbon adjustments (BCAs) outlined in the American Clean Energy and Security Act of 2009 (H.R. 2454), using an economy-wide model. For 2025, we find that BCAs reduce leakage by up to two-thirds, but result in only modest reductions in global emissions and significantly reduce welfare. In contrast, BCA-equivalent leakage reductions can be achieved by very small emission charges or efficiency improvements in nations targeted by BCAs, which have negligible welfare effects. We conclude that BCAs are a costly method to reduce leakage, but may be an effective coercion strategy.

Contribution of anaerobic digesters to emissions mitigation and electricity generation under U.S. climate policy.

Livestock husbandry in the U.S. significantly contributes to many environmental problems, including the release of methane, a potent greenhouse gas (GHG). Anaerobic digesters (ADs) break down organic wastes using bacteria that produce methane, which can be collected and combusted to generate electricity. ADs also reduce odors and pathogens that are common with manure storage and the digested manure can be used as a fertilizer. There are relatively few ADs in the U.S., mainly due to their high capital costs. We use the MIT Emissions Prediction and Policy Analysis (EPPA) model to test the effects of a representative U.S. climate stabilization policy on the adoption of ADs which sell electricity and generate methane mitigation credits. Under such policy, ADs become competitive at producing electricity in 2025, when they receive methane reduction credits and electricity from fossil fuels becomes more expensive. We find that ADs have the potential to generate 5.5% of U.S. electricity.

WHAT TO EXPECT FROM SECTORAL TRADING: A US-CHINA EXAMPLE

In the recent United Nations Framework Convention on Climate Change (UNFCCC) negotiations, sectoral trading was proposed to encourage early action and spur investment in low carbon technologies in developing countries. This mechanism involves including a sector from one or more nations in an international cap-and-trade system. We analyze trade in carbon permits between the Chinese electricity sector and a US economy-wide cap-and-trade program using the MIT Emissions Prediction and Policy Analysis (EPPA) model. In 2030, the US purchases permits valued at

Food Miles: Starving the Poor?

42 billion from China, which represents 46% of its capped emissions. In China, sectoral trading increases the price of electricity and reduces aggregate electricity generation, especially from coal. However, sectoral trading induces only moderate increases in generation from nuclear and renewables. We also observe increases in emission from other sectors. In the US, the availability of cheap emissions permits reduces the cost of climate policy and increases electricity generation.

Dairy Disaggregation and Joint Production in an Economy-Wide Model

Food miles measure the distance food travels to reach consumers’ plates. Although substituting local food for imported produce will not necessarily reduce greenhouse gas (GHG) emissions, the food miles movement is widely supported by consumers and import-competing producers, especially in some parts of Western Europe. We investigate the economic implications of food miles preference changes in the UK, France and Germany on other nations using an economy-wide model. Among the regions we consider, New Zealand is the most distant from Western Europe and Madagascar and Malawi export the most agro-food products relative to GDP, so food miles movements have the largest impacts on these regions. When there is a linear relationship between distance and preference changes, food miles campaigns decrease welfare in New Zealand, Madagascar and Malawi by 0.30, 0.12 and 0.28 per cent, respectively. When there is a preference shift away from imported food unrelated to distance, proportional welfare losses in the three countries are, respectively, 0.11, 0.08 and 0.24 per cent. With the exception of New Zealand, these findings indicate that some of the world’s poorest nations will suffer the most from European food miles lobbying. We conclude that food miles campaigns will increase global inequality without necessarily improving environmental outcomes.

Shifting the 'Goal Posts': Optimizing the Allocation of Competition Points for Sporting Contests

We examine the impact of dairy disaggregation and joint production on trade liberalisation outcomes in an economy-wide model. Depending on parameterisation, our model includes either (i) a single dairy commodity, (ii) several dairy commodities without joint production or (iii) several dairy commodities with joint production. In a numerical application, we consider the removal of US tariffs on dairy exports from New Zealand (the world’s largest dairy exporter). We show that failing to account for joint production when dairy commodities are disaggregated leads to misleading results. Our preferred dairy production function differs from those used in other applied trade models. Our analysis can be used to determine when accounting for joint production in other sectors is important.

Secondary Behavioural Incentives: Bonus Points and Rugby Professionals

Competition points are awarded in sports tournaments to determine which participants qualify for the playoffs or to identify a champion. We use competition points to measure strength in a prediction model and choose points to maximize prediction accuracy. This allows us to determine the allocation of competition points that most appropriately rewards strong teams. Our analysis focuses on Super Rugby, as the characteristics of this competition closely match our modelling assumptions. We find that the current allocation of competition points does not ensure that the strongest teams qualify for the playoffs and suggest an alternative. Our findings have implications for other competitions.

Liberating middle earth: How will changes in the global trading system affect New Zealand?

We examine the impact of secondary incentives by evaluating agent behaviour in a professional sport that rewards multiple outcomes. Our analysis focuses on the Super Rugby competition, which awards four points for a win and bonus points for scoring four or more tries and/or losing by seven or fewer points. Using binary response models, we find that significantly more tries are scored by teams late in matches when they can earn the try bonus point with one more try, but only when the match result itself is already likely decided. This result offers important evidence on multitasking by professionals.

Trade and Rising Wage Inequality: What Can We Learn from a Decade of Computable General Equilibrium Analysis?

Trade liberalisation has gained momentum in recent decades due to the increased popularity of free trade areas and the continued progress of multilateral liberalisation via the World Trade Organisation (WTO). We analyse how likely changes in the global trading environment will influence New Zealand — a small, relatively open economy with a comparative advantage in the worlds most protected sector ‐ using a computable general equilibrium (CGE) model of global production and trade. We find that most bilateral free trade agreements have a small but positive impact on New Zealand welfare and multilateral trade liberalisation generates significant benefits for New Zealand.