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The Performance of Compliance Measures and Instruments for Nitrate Nonpoint Pollution Control Under Uncertainty and Alternative Agricultural Commodity Policy Regimes

Published online by Cambridge University Press:  15 September 2016

Nii Adote Abrahams  and
James S. Shortle
Nii Adote Abrahams
Affiliation:
School of Business Administration, Missouri Southern State College, Joplin, MO
James S. Shortle
Affiliation:
Department of Agricultural Economics and Rural Sociology, Pennsylvania State University, University Park, PA
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Abstract

Following Weitzman (1974), there is ample theoretical literature indicating that choice of pollution control instruments under conditions of uncertainty will affect the expected net benefits that can be realized from environmental protection. However, there is little empirical research on the ex ante efficiency of alternative instruments for controlling water, or other types of pollution, under uncertainty about costs and benefits. Using a simulation model that incorporates various sources of uncertainty, the ex ante efficiency of price and quantity controls applied to two alternative policy targets, fertilizer application rates and estimated excess nitrogen applications, are examined under varying assumptions about agricultural income support policies. Results indicate price instruments outperform quantity instruments. A tax on excess nitrogen substantially outperforms a fertilizer tax in the scenario with support programs, while the ranking is reversed in the scenario without support programs.

Keywords

nonpoint pollution policypolicy coordinationuncertainty
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 33 , Issue 1 , April 2004 , pp. 79 - 90
Copyright
Copyright © 2004 Northeastern Agricultural and Resource Economics Association 

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