Among the green lobby and the general public there is urgency for agriculture to clean up its act on environmental issues. Increased intensification of land use and in particular dairying has led to environmental spill-overs that the public is no longer willing to tolerate. Agriculture is in danger of losing its public license to operate. Polices to ensure degraded waterways are put on a path to improvement are currently being formulated. These have the potential to rob New Zealand of its international competitive advantage in agricultural production if not implemented wisely. This paper uses two case studies to illustrate the costs and the timeframes inherent in environmental improvement for pastoral agriculture and makes recommendation on policies to ensure New Zealand has good environmental outcomes and retains its international competitive advantage.