Regional Socioeconomic Impacts of Livestock Regulation - an Integrated Modelling Approach

This paper addresses the combination of environmental regulation and rural development using an integrated economic modelling approach. Specifically, the regional impacts of regulating livestock density at the farm level are analysed in a projected 2010 setting. This scenario is motivated by a concern for nitrogen loads on ground and surface water. The applied model framework includes a macroeconomic CGE-model, an econometric agricultural sector model and a local economic model, and consistent links have been established between these models. The analyses show that the largest relative economic impacts occur in the western parts of Denmark. This occurs in the agricultural sector, because the highest livestock densities are found in the western regions, but also at the general economic level, because agriculture is relatively important for the regional economy in these regions. However, the maximum absolute economic impact on the regional economies in terms of regional GDP is only around one per cent in the most affected region.