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Designing Regulatory Policies for Complex Externalities: The Case of Agricultural Pollution

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  • Kampas, Athanasios
  • Melfou, Katerina
  • Aftab, Ashar

Abstract

The paper examines the issue of designing and implementing policy measures to control complex agricultural externalities. Complex externalities refer to the situation where a production (firm on firm) externality coexists with a detrimental (firm on society) externality. The paper identifies the optimal solution for complex externalities, which is a combination of spatially differentiated taxes. However, severe information requirements render the first-best policy infeasible. Finally, a likely voluntary scheme based on firm self-report is examined which may enforce firm compliance with the optimal policy.

Suggested Citation

  • Kampas, Athanasios & Melfou, Katerina & Aftab, Ashar, 2013. "Designing Regulatory Policies for Complex Externalities: The Case of Agricultural Pollution," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 14(2), pages 1-14.
    • Handle: RePEc:ags:aergaa:253546
    DOI: 10.22004/ag.econ.253546
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    Cited by:

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    More about this item

    Keywords

    Agricultural and Food Policy; Financial Economics;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q19 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Other
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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