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Green Payment Programs For Nonpoint Source Pollution Control: How Important Is Targeting For Cost-Effectiveness?

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  • Baerenklau, Kenneth A.
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    Abstract

    Mechanism design theory is used to examine the case of a cost-minimizing regulator who uses input-reduction subsidies to meet an exogenously imposed ambient standard for nonpoint source pollution. A general result claimed for a welfare-maximizing equilibrium. Numerical results suggest the ability to directly target contracts reduces costs significantly for the regulator. But in the absence of this ability, indirect targeting reduces costs only slightly.

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    Bibliographic Info

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

    Volume (Year): 27 (2002)
    Issue (Month): 02 (December)
    Pages:

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    Handle: RePEc:ags:jlaare:31117

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

    Keywords: Environmental Economics and Policy;

    References

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    1. Wu, JunJie & Babcock, Bruce A., 1995. "Optimal Design of a Voluntary Green Payment Program Under Asymmetric Information," Staff General Research Papers 843, Iowa State University, Department of Economics.
    2. Segerson, Kathleen, 1988. "Uncertainty and incentives for nonpoint pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 87-98, March.
    3. Xepapadeas, A. P., 1991. "Environmental policy under imperfect information: Incentives and moral hazard," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 113-126, March.
    4. Shoemaker, Robbin & Malik, Arun, 1993. "Optimal Cost-Sharing Programs to Reduce Agricultural Pollution," Technical Bulletins 157045, United States Department of Agriculture, Economic Research Service.
    5. Guesnerie, Roger & Seade, Jesus, 1982. "Nonlinear pricing in a finite economy," Journal of Public Economics, Elsevier, vol. 17(2), pages 157-179, March.
    6. Smith, Rodney B.W. & Tomasi, Theodore D., 1995. "Transaction Costs And Agricultural Nonpoint-Source Water Pollution Control Policies," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(02), December.
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    Cited by:
    1. Elofsson, Katarina, 2011. "Contracting Nitrogen Abatement in the Baltic Proper Watershed Under the Risk of Climate Change," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114344, European Association of Agricultural Economists.

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