IDEAS home Printed from https://ideas.repec.org/a/eee/agiwat/v104y2012icp10-20.html
   My bibliography  Save this article

Cost-effective policies for improving water quality by reducing nitrate emissions from diverse dairy farms: An abatement–cost perspective

Author

Listed:
  • Doole, Graeme J.

Abstract

A flexible and replicable approach for the appraisal of the cost-effectiveness of various policy instruments for the regulation of nonpoint pollution from heterogeneous farms is presented. The framework is employed to evaluate three regulatory instruments for achieving reductions in nitrate leaching among a large population of dairy farms in the Waikato region of New Zealand. These instruments are (1) a differentiated policy that allows individual abatement effort to vary among farms to satisfy a catchment-wide reduction in leaching load, (2) a uniform policy that requires all farms to reduce emissions by a constant proportion, and (3) a threshold policy that requires all farms to emit beneath a given threshold leaching load. A 30% reduction in leaching will cost around 1.4, 1.96, and 4.41 million dollars across the catchment with a differentiated, uniform, and threshold policy, respectively. In comparison, a 50% reduction in leaching will cost around 7.77, 8.58, and 11.24 million dollars across the catchment with a differentiated, uniform, and threshold policy, respectively. Thus, a differentiated policy achieves required environmental outcomes at least cost. This result highlights the value of modelling heterogeneous farms in policy evaluation for nonpoint pollution control.

Suggested Citation

  • Doole, Graeme J., 2012. "Cost-effective policies for improving water quality by reducing nitrate emissions from diverse dairy farms: An abatement–cost perspective," Agricultural Water Management, Elsevier, vol. 104(C), pages 10-20.
    • Handle: RePEc:eee:agiwat:v:104:y:2012:i:c:p:10-20
    DOI: 10.1016/j.agwat.2011.11.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S037837741100312X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.agwat.2011.11.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Marita Laukkanen & Anni Huhtala, 2008. "Optimal management of a eutrophied coastal ecosystem: balancing agricultural and municipal abatement measures," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 39(2), pages 139-159, February.
    2. Dominic Moran & Michael Macleod & Eileen Wall & Vera Eory & Alistair McVittie & Andrew Barnes & Robert Rees & Cairistiona F. E. Topp & Andrew Moxey, 2011. "Marginal Abatement Cost Curves for UK Agricultural Greenhouse Gas Emissions," Journal of Agricultural Economics, Wiley Blackwell, vol. 62(1), pages 93-118, February.
    3. Wen-yuan Huang & Michael LeBlanc, 1994. "Market-Based Incentives for Addressing Non-Point Water Quality Problems: A Residual Nitrogen Tax Approach," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 16(3), pages 427-440.
    4. Brady, Mark, 2003. "The relative cost-efficiency of arable nitrogen management in Sweden," Ecological Economics, Elsevier, vol. 47(1), pages 53-70, November.
    5. Xepapadeas, A. P., 1995. "Observability and choice of instrument mix in the control of externalities," Journal of Public Economics, Elsevier, vol. 56(3), pages 485-498, March.
    6. Elofsson, Katarina, 2003. "Cost-effective reductions of stochastic agricultural loads to the Baltic Sea," Ecological Economics, Elsevier, vol. 47(1), pages 13-31, November.
    7. Newell, Richard G & Stavins, Robert N, 2003. "Cost Heterogeneity and the Potential Savings from Market-Based Policies," Journal of Regulatory Economics, Springer, vol. 23(1), pages 43-59, January.
    8. Doole, Graeme J., 2005. "Optimal management of the New Zealand longfin eel (Anguilla dieffenbachii)," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(4), pages 1-17.
    9. Hanley, Nick, 1990. "The Economics of Nitrate Pollution," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 17(2), pages 129-151.
    10. Kleijnen, Jack P. C. & Sargent, Robert G., 2000. "A methodology for fitting and validating metamodels in simulation," European Journal of Operational Research, Elsevier, vol. 120(1), pages 14-29, January.
    11. Balana, Bedru Babulo & Vinten, Andy & Slee, Bill, 2011. "A review on cost-effectiveness analysis of agri-environmental measures related to the EU WFD: Key issues, methods, and applications," Ecological Economics, Elsevier, vol. 70(6), pages 1021-1031, April.
    12. Sergey S. Rabotyagov & Manoj Jha & Todd D. Campbell, 2010. "Nonpoint-Source Pollution Reduction for an Iowa Watershed: An Application of Evolutionary Algorithms," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(s1), pages 411-431, December.
    13. Maya, R. S. & Fenhann, Jorgen, 1994. "Methodological lessons and results from UNEP GHG abatement costing studies The case of Zimbabwe," Energy Policy, Elsevier, vol. 22(11), pages 955-963, November.
    14. Zeyuan Qiu, 2005. "Using Multi-Criteria Decision Models to Assess the Economic and Environmental Impacts of Farming Decisions in an Agricultural Watershed," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(2), pages 229-244.
    15. Christoph Bohringer, Andreas Loschel and Thomas F. Rutherford, 2006. "Efficiency Gains from "What"-Flexibility in Climate Policy An Integrated CGE Assessment," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 405-424.
    16. Kingwell, Ross & John, Michele, 2007. "The influence of farm landscape shape on the impact and management of dryland salinity," Agricultural Water Management, Elsevier, vol. 89(1-2), pages 29-38, April.
    17. Andrew Moxey & Ben White, 1994. "Efficient Compliance With Agricultural Nitrate Pollution Standards," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(1), pages 27-37, January.
    18. Yang, Wanhong & Khanna, Madhu & Farnsworth, Richard & Onal, Hayri, 2003. "Integrating economic, environmental and GIS modeling to target cost effective land retirement in multiple watersheds," Ecological Economics, Elsevier, vol. 46(2), pages 249-267, September.
    19. Walter Radermacher & Wolfgang Riege-Wcislo & Angela Heinze, 1999. "A statistical–analytical methodology for the construction of abatement cost curves," International Journal of Sustainable Development, Inderscience Enterprises Ltd, vol. 2(1), pages 59-94.
    20. Nick Hanley, 1990. "The Economics of Nitrate Pollution Control in the UK," Working Papers Series 90/5, University of Stirling, Division of Economics.
    21. James S. Shortle & Richard D. Horan, 2001. "The Economics of Nonpoint Pollution Control," Journal of Economic Surveys, Wiley Blackwell, vol. 15(3), pages 255-289, July.
    22. Stéphane Cara & Martin Houzé & Pierre-Alain Jayet, 2005. "Methane and Nitrous Oxide Emissions from Agriculture in the EU: A Spatial Assessment of Sources and Abatement Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(4), pages 551-583, December.
    23. Khanna, Madhu & Zilberman, David, 1997. "Incentives, precision technology and environmental protection," Ecological Economics, Elsevier, vol. 23(1), pages 25-43, October.
    24. Richard E. Howitt, 1995. "Positive Mathematical Programming," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(2), pages 329-342.
    25. Sergey S. Rabotyagov & Manoj Jha & Todd D. Campbell, 2010. "Nonpoint‐Source Pollution Reduction for an Iowa Watershed: An Application of Evolutionary Algorithms," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(4), pages 411-431, December.
    26. Hart, Rob, 2003. "Dynamic pollution control--time lags and optimal restoration of marine ecosystems," Ecological Economics, Elsevier, vol. 47(1), pages 79-93, November.
    27. Nordblom, T.L. & Christy, B.P. & Finlayson, J.D. & Roberts, A.M. & Kelly, J.A., 2010. "Least cost land-use changes for targeted catchment salt load and water yield impacts in south eastern Australia," Agricultural Water Management, Elsevier, vol. 97(6), pages 811-823, June.
    28. Zeyuan Qiu, 2005. "Using Multi-Criteria Decision Models to Assess the Economic and Environmental Impacts of Farming Decisions in an Agricultural Watershed," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(2), pages 229-244.
    29. Kruseman, Gideon & Blokland, Pieter-Willem & Bouma, Foppe & Luesink, Harry H. & Mokveld, Lennard J. & Vrolijk, Hans C.J., 2008. "Micro-simulation as a tool to assess policy concerning non-point source pollution: the case of ammonia in Dutch agriculture," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6661, European Association of Agricultural Economists.
    30. Nordblom, Thomas L. & Hume, Iain H. & Bathgate, Andrew D. & Reynolds, Michael, 2006. "Mathematical optimisation of drainage and economic land use for target water and salt yields," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(3), pages 1-22, September.
    31. Tom Nordblom & Iain Hume & Andrew Bathgate & Michael Reynolds, 2006. "Mathematical optimisation of drainage and economic land use for target water and salt yields ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(3), pages 381-402, September.
    32. Athanasios Kampas & Ben White, 2004. "Administrative Costs and Instrument Choice for Stochastic Non-point Source Pollutants," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 27(2), pages 109-133, February.
    33. Bathgate, Andrew & Pannell, David J., 2002. "Economics of deep-rooted perennials in western Australia," Agricultural Water Management, Elsevier, vol. 53(1-3), pages 117-132, February.
    34. Koikkalainen, Kauko & Laukkanen, Marita & Helin, Janne, 2006. "Abatement costs for agricultural nitrogen and phosphorus loads: a case study of South-Western Finland," Discussion Papers 11867, MTT Agrifood Research Finland.
    35. Vijay, Samudra & DeCarolis, Joseph F. & Srivastava, Ravi K., 2010. "A bottom-up method to develop pollution abatement cost curves for coal-fired utility boilers," Energy Policy, Elsevier, vol. 38(5), pages 2255-2261, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Holland, Luke M. & Doole, Graeme J., 2014. "Implications of fairness for the design of nitrate leaching policy for heterogeneous New Zealand dairy farms," Agricultural Water Management, Elsevier, vol. 132(C), pages 79-88.
    2. Chyzheuskaya, Aksana & O'Donoghue, Cathal & O'Neill, Stephen, 2014. "Using a farm micro-simulation model to evaluate the impact of the nitrogen reduct," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 3(4), pages 1-11.
    3. Doole, Graeme J. & Romera, Alvaro J., 2014. "Implications of a nitrogen leaching efficiency metric for pasture-based dairy farms," Agricultural Water Management, Elsevier, vol. 142(C), pages 10-18.
    4. Doole, Graeme J. & Romera, Alvaro J., 2015. "Trade-offs between profit, production, and environmental footprint on pasture-based dairy farms in the Waikato region of New Zealand," Agricultural Systems, Elsevier, vol. 141(C), pages 14-23.
    5. Paragahawewa, Upananda H. & Doole, Graeme J. & Bower, Bob, 2015. "Is dilution the solution for water pollution? An economic analysis," 2015 Conference (59th), February 10-13, 2015, Rotorua, New Zealand 202984, Australian Agricultural and Resource Economics Society.
    6. Doole, Graeme J. & Kingwell, Ross, 2015. "Efficient economic and environmental management of pastoral systems: Theory and application," Agricultural Systems, Elsevier, vol. 133(C), pages 73-84.
    7. Mack, Gabriele & Huber, Robert, 2017. "On-farm compliance costs and N surplus reduction of mixed dairy farms under grassland-based feeding systems," Agricultural Systems, Elsevier, vol. 154(C), pages 34-44.
    8. Julio Cesar Pascale Palhares & Esther R. Afonso & Augusto H. Gameiro, 2019. "Reducing the water cost in livestock with adoption of best practices," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 21(4), pages 2013-2023, August.
    9. Jo Hendy & Levente Timar & Dominic White, 2018. "Land-use modelling in New Zealand: current practice and future needs," Working Papers 18_16, Motu Economic and Public Policy Research.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. George HALKOS & Georgia GALANI, 2014. "Cost Effectiveness Analysis in Reducing Nutrient Loading in Baltic and Black Seas A Review," Journal of Advanced Research in Management, ASERS Publishing, vol. 5(1), pages 28-51.
    2. Sergey Rabotyagov & Catherine L. Kling & Philip W. Gassman & Nancy N. Rabalais & R. Eugene Turner, 2012. "Economics of Dead Zones: Linking Externalities from the Land to their Consequences in the Sea, The," Center for Agricultural and Rural Development (CARD) Publications 12-wp534, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    3. Kari Hyytiäinen & Anni Huhtala, 2014. "Combating eutrophication in coastal areas at risk for oil spills," Annals of Operations Research, Springer, vol. 219(1), pages 101-121, August.
    4. Doole, Graeme J. & Marsh, Dan K., 2014. "Methodological limitations in the evaluation of policies to reduce nitrate leaching from New Zealand agriculture," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(1), January.
    5. Petsakos, Athanasios & Jayet, Pierre-Alain, 2010. "Evaluating the efficiency of a N-input tax under different policy scenarios at different scales," 120th Seminar, September 2-4, 2010, Chania, Crete 109397, European Association of Agricultural Economists.
    6. Holland, Luke M. & Doole, Graeme J., 2014. "Implications of fairness for the design of nitrate leaching policy for heterogeneous New Zealand dairy farms," Agricultural Water Management, Elsevier, vol. 132(C), pages 79-88.
    7. Hyytiainen, Kari & Ahtiainen, Heini & Heikkila, Jaakko & Helin, Janne & Huhtala, Anni & Iho, Antti & Koikkalainen, Kauko & Miettinen, Antti & Pouta, Eija & Vesterinen, Janne, 2009. "An integrated simulation model to evaluate national policies for the abatement of agricultural nutrients in the Baltic Sea," Discussion Papers 49896, MTT Agrifood Research Finland.
    8. Aftab, Ashar & Hanley, Nick & Baiocchi, Giovanni, 2010. "Integrated regulation of nonpoint pollution: Combining managerial controls and economic instruments under multiple environmental targets," Ecological Economics, Elsevier, vol. 70(1), pages 24-33, November.
    9. Aftab, Ashar & Hanley, Nick & Baiocchi, Giovanni, 2017. "Transferability of Policies to Control Agricultural Nonpoint Pollution in Relatively Similar Catchments," Ecological Economics, Elsevier, vol. 134(C), pages 11-21.
    10. Kahil, Mohamed Taher & Albiac, José, 2013. "Greenhouse gases mitigation policies in the agriculture of Aragon, Spain," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 2(1), pages 1-24, April.
    11. Cyril Bourgeois & Nosra Ben-Fradj & Mélissa Clodic & Pierre-Alain Jayet, 2011. "How cost-effective is a mixed policy targeting the management of three pollutants from N-fertilizers," Working Papers 2011/03, INRA, Economie Publique.
    12. Balana, Bedru Babulo & Vinten, Andy & Slee, Bill, 2011. "A review on cost-effectiveness analysis of agri-environmental measures related to the EU WFD: Key issues, methods, and applications," Ecological Economics, Elsevier, vol. 70(6), pages 1021-1031, April.
    13. Graeme J. Doole & David J. Pannell, 2012. "Empirical evaluation of nonpoint pollution policies under agent heterogeneity: regulating intensive dairy production in the Waikato region of New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(1), pages 82-101, January.
    14. Reeling, Carson J. & Gramig, Benjamin M., 2011. "Using Carbon Offsets to Fund Agricultural Conservation Practices in a Working-Lands Setting," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103577, Agricultural and Applied Economics Association.
    15. Nordblom, T.L. & Hume, I.H. & Finlayson, J.D. & Pannell, D.J. & Holland, J.E. & McClintock, A.J., 2015. "Distributional consequences of upstream tree plantations on downstream water users in a Public–Private Benefit Framework," Agricultural Systems, Elsevier, vol. 139(C), pages 271-281.
    16. Marita Laukkanen & Anni Huhtala, 2008. "Optimal management of a eutrophied coastal ecosystem: balancing agricultural and municipal abatement measures," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 39(2), pages 139-159, February.
    17. Picazo-Tadeo, Andres J. & Reig-Martinez, Ernest, 2007. "Farmers' costs of environmental regulation: Reducing the consumption of nitrogen in citrus farming," Economic Modelling, Elsevier, vol. 24(2), pages 312-328, March.
    18. Garnache, Cloe & Merel, Pierre R., 2012. "Carbon market policy design: Investigating the role of payments aggregation," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124960, Agricultural and Applied Economics Association.
    19. Sergey S. Rabotyagov & Adriana M. Valcu-Lisman & Catherine L. Kling, 2016. "Resilient Provision of Ecosystem Services from Agricultural Landscapes: Trade-offs Involving Means and Variances of Water Quality Improvements," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(5), pages 1295-1313.
    20. Zhen, Chen & Zheng, Xiaoyong, 2015. "Measuring the Informational Value of Interpretive Shelf Nutrition Labels to Shoppers," 2016 Allied Social Sciences Association (ASSA) Annual Meeting, January 3-5, 2016, San Francisco, California 212812, Agricultural and Applied Economics Association.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:agiwat:v:104:y:2012:i:c:p:10-20. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/agwat .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.