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Endogenous Transport Coefficients: Implications for Improving Water Quality from Multi-Contaminants in an Agricultural Watershed


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  • Anastasia Lintner


  • Alfons Weersink


The effectiveness of imperfect pollution control instruments is examined for a diffuse source, multi-contaminant problem in which the transport coefficients for sediment-bound residuals are endogenous. Similar evaluations fix the percentage of sediment deposited and optimize either for a single firm managing the whole watershed or on a firm by firm basis. This study shows that ignoring the dependence of the transport coefficients on intervening land uses creates a positive externality. The filtering potential of activities conducted by firms close to the receptor permits firms further away to undertake more profitable but erosive practices. Optimizing management choices, and consequently endogenizing the transport coefficients, for all firms simultaneously removes the externality. An empirical application combines hydrological simulation models with an economic optimization model for nutrient pollution of surface and ground water within an agricultural watershed. Although firms are homogeneous in abatement costs, differences in spatial location leave uniform instruments unable to achieve the water quality goal efficiently. An ambient tax/subsidy scheme can achieve the water quality goal efficiently but the informational requirements will be excessive in most situations where the transport mechanisms for residuals are dependent upon the practices of independent decision making units. Copyright Kluwer Academic Publishers 1999

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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 14 (1999)
Issue (Month): 2 (September)
Pages: 269-296

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Handle: RePEc:kap:enreec:v:14:y:1999:i:2:p:269-296

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Keywords: transport coefficients; multiple pollutants; JEL classification: Q2;

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  1. Hanley, Nick, 1990. "The Economics of Nitrate Pollution," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 17(2), pages 129-51.
  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. Jia Hua Pan & Ian Hodge, 1994. "Land Use Permits As An Alternative To Fertiliser And Leaching Taxes For The Control Of Nitrate Pollution," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(1), pages 102-112.
  4. Aziz Bouzaher & John B. Braden & Gary V. Johnson, 1990. "A Dynamic Programming Approach to a Class of Nonpoint Source Pollution Control Problems," Management Science, INFORMS, vol. 36(1), pages 1-15, January.
  5. Braden, John B. & Larson, Robert S. & Herricks, Edwin E., 1990. "Impact Targets versus Discharge Standards in Agricultural Pollution Management," 1990 Conference (34th), February 13-15, 1990, Brisbane, Australia 144912, Australian Agricultural and Resource Economics Society.
  6. Andrew Moxey & Ben White, 1994. "Efficient Compliance With Agricultural Nitrate Pollution Standards," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(1), pages 27-37.
  7. D. Peter Stonehouse & Martin Bohl, 1990. "Land Degradation Issues in Canadian Agriculture," Canadian Public Policy, University of Toronto Press, vol. 16(4), pages 418-431, December.
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Cited by:
  1. Yang, Wanhong & Khanna, Madhu & Farnsworth, Richard L. & Onal, Hayri, 2000. "Optimal Targeting Of Crep To Improve Water Quality: Determining Land Rental Offers With Endogenous Sediment Deposition Coefficients," 2000 Annual meeting, July 30-August 2, Tampa, FL 21807, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Ancev, Tihomir & Stoecker, Arthur L. & Storm, Daniel E. & White, Michael J., 2006. "The Economics of Efficient Phosphorus Abatement in a Watershed," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 31(03), December.
  3. Werner Hediger, 2003. "Alternative policy measures and farmers' participation to improve rural landscapes and water quality: A conceptual framework," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 139(III), pages 333-350, September.
  4. Yang, Wanhong & Khanna, Madhu & Farnsworth, Richard L. & Onal, Hayri, 2001. "Cost Effective Targeting Of Land Retirement To Improve Water Quality: A Multi-Watershed Analysis," 2001 Annual meeting, August 5-8, Chicago, IL 20687, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. 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.
  6. Y. Farzin & Jonathan Kaplan, 2004. "Nonpoint Source Pollution Control under Incomplete and Costly Information," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 28(4), pages 489-506, August.
  7. Khanna, Madhu & Yang, Wanhong & Farnsworth, Richard L. & Onal, Hayri, 2002. "Evaluating The Cost Effectiveness Of Land Retirement Programs," 2002 Annual meeting, July 28-31, Long Beach, CA 19740, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  8. Sergey Rabotyagov & Adriana Valcu & Catherine L. Kling, 2012. "Reversing the Property Rights: Practice-Based Approaches for Controlling Agricultural Nonpoint-Source Water Pollution When Emissions Aggregate Nonlinearly," Center for Agricultural and Rural Development (CARD) Publications 12-wp533, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  9. Horan, Richard D. & Claassen, Roger & Cooper, Joseph C., 2000. "Environmental Risk And Agri-Environmental Policy Design," 2000 Annual meeting, July 30-August 2, Tampa, FL 21827, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  10. van Wenum, J. H. & Wossink, G. A. A. & Renkema, J. A., 2004. "Location-specific modeling for optimizing wildlife management on crop farms," Ecological Economics, Elsevier, vol. 48(4), pages 395-407, April.


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