Rural land values will likely fall once an emissions trading scheme (ETS) is in place, warns a leading climate change policy commentator. PricewaterhouseCoopers (PWC) climate change team partner Chris Taylor told Rural News some land values will increase, while others will fall. Excluding forestry, he says any fall in land value will be tied to a drop in yield. "˜But it's more than likely that an ETS will reduce returns because yields will be lower and this reduction will flow through to land value. "˜The purpose of a price-based measure, such as an ETS, is to create a financial incentive for emission reductions by allowing the market to impose a cost. In New Zealand, this will impact on all sectors.' Taylor says as a result, all households and businesses will face the flow-on costs of carbon to the economy, regardless of whether they are participants in the scheme. "˜While there has been significant debate over the potential economic impacts, it is clear that everyone will be affected.' Taylor says farmers with forests on their land face a different set of challenges, although they have the opportunity to offset costs or create another revenue stream.
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