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Site-Specific Simulation of Nutrient Control Policies: Integrating Economic and Water Quality Effects

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  • Burkhart, Christopher S.
  • Jha, Manoj K.
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    Abstract

    A watershed-based modeling system is developed to assess alternative nutrient abatement policies, including fertilizer taxes, application caps, and uniform reductions. A microeconometric model of nutrient use is estimated using farm-level data, prices, and spatially detailed soil and land characteristics. Results are interfaced with a physical watershed model to predict water quality changes. Simulations demonstrate differences in water quality effects across policies. For nitrate loads at the watershed outlet, an application cap provides slightly superior performance for small reductions, but a tax is more efficient under larger reductions. Phosphorus reductions at the subwatershed level vary but provide information about policy tradeoffs.

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    File URL: http://purl.umn.edu/122307
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    Bibliographic Info

    Article provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.

    Volume (Year): 37 (2012)
    Issue (Month): 1 (April)
    Pages:

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    Handle: RePEc:ags:jlaare:122307

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    Web page: http://waeaonline.org/
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    Related research

    Keywords: nitrogen; nutrient policy; phosphorus; water quality; Environmental Economics and Policy; Farm Management; Resource /Energy Economics and Policy;

    References

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    1. Predrag Rajsic & Alfons Weersink & Markus Gandorfer, 2009. "Risk and Nitrogen Application Levels," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(2), pages 223-239, 06.
    2. Attwood, J. D. & McCarl, B. & Chen, Chi-Chung & Eddleman, B. R. & Nayda, B. & Srinivasan, R., 2000. "Assessing regional impacts of change: linking economic and environmental models," Agricultural Systems, Elsevier, vol. 63(3), pages 147-159, March.
    3. Babcock, Bruce A., 1992. "Effects of Uncertainty on Optimal Nitrogen Applications (The)," Staff General Research Papers 10588, Iowa State University, Department of Economics.
    4. Glenn Sheriff, 2005. "Efficient Waste? Why Farmers Over-Apply Nutrients and the Implications for Policy Design," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(4), pages 542-557.
    5. Burkart, Christopher & Jha, Manoj K., 2007. "Nitrate Reduction Approaches," Choices, Agricultural and Applied Economics Association, vol. 22(2).
    6. Satya Yadav & Willis Peterson & K. Easter, 1997. "Do farmers overuse nitrogen fertilizer to the detriment of the environment?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 9(3), pages 323-340, April.
    7. Amemiya, Takeshi, 1977. "The Maximum Likelihood and the Nonlinear Three-Stage Least Squares Estimator in the General Nonlinear Simultaneous Equation Model," Econometrica, Econometric Society, vol. 45(4), pages 955-68, May.
    8. Gallant, A. Ronald & Jorgenson, Dale W., 1979. "Statistical inference for a system of simultaneous, non-linear, implicit equations in the context of instrumental variable estimation," Journal of Econometrics, Elsevier, vol. 11(2-3), pages 275-302.
    9. Abrahams, Nii Adote & Shortle, James S., 2004. "The Performance of Compliance Measures and Instruments for Nitrate Nonpoint Pollution Control Under Uncertainty and Alternative Agricultural Commodity Policy Regimes," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 33(1), April.
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