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Best Management Practices and Nutrient Reduction: An Integrated Economic-Hydrological Model of the Western Lake Erie Basin

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  • Liu, Hongxing
  • Zhang, Wendong
  • Irwin, Elena G.
  • Kast, Jeffrey
  • Aloysius, Noel
  • Martin, Jay
  • Kalcic, Margaret

Abstract

We develop the first spatially integrated economic-hydrological model of the western Lake Erie basin explicitly linking economic models of farmers' field-level Best Management Practice (BMP) adoption choices with the Soil and Water Assessment Tool (SWAT) model to evaluate nutrient management policy cost-effectiveness. We quantify tradeoffs among phosphorus reduction policies and find that a hybrid policy coupling a fertilizer tax with cost-share payments for subsurface placement is the most cost-effective, and when implemented with a 200% tax can achieve the stated policy goal of 40% reduction in nutrient loadings. We also find economic adoption models alone can overstate the potential for BMPs to reduce nutrient loadings by ignoring biophysical complexities.
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  • Liu, Hongxing & Zhang, Wendong & Irwin, Elena G. & Kast, Jeffrey & Aloysius, Noel & Martin, Jay & Kalcic, Margaret, 2018. "Best Management Practices and Nutrient Reduction: An Integrated Economic-Hydrological Model of the Western Lake Erie Basin," 2018 Annual Meeting, August 5-7, Washington, D.C. 274426, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea18:274426
    DOI: 10.22004/ag.econ.274426
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    Cited by:

    1. Gregory Howard & Wendong Zhang & Adriana Valcu‐Lisman & Philip W. Gassman, 2024. "Evaluating the tradeoff between cost effectiveness and participation in agricultural conservation programs," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(2), pages 712-738, March.
    2. Liu, Yanan & Klaiber, Allen, 2022. "The Impact of Harmful Algal Blooms on Household Averting Expenditure," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322117, Agricultural and Applied Economics Association.
    3. Yanan Liu & H. Allen Klaiber, 2023. "Don’t Drink the Water! The Impact of Harmful Algal Blooms on Household Averting Expenditure," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 86(1), pages 29-55, October.
    4. David Wolf & Sathya Gopalakrishnan & H. Allen Klaiber, 2022. "Staying afloat: The effect of algae contamination on Lake Erie housing prices," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(5), pages 1701-1723, October.
    5. Shr, Yau-Huo (Jimmy) & Zhang, Wendong, 2021. "Does Omitting Downstream Water Quality Change the Economic Benefits of Nutrient Reduction? Evidence from a Discrete Choice Experiment," ISU General Staff Papers 202101010800001067, Iowa State University, Department of Economics.
    6. Howard, Gregory E. & Zhang, Wendong & Valcu-Lisman, Adriana M., 2021. "Evaluating the Efficiency-Participation Tradeoff in Agricultural Conservation Programs: The Effect of Reverse Auctions, Spatial Targeting, and Higher Offered Payments," 2021 Annual Meeting, August 1-3, Austin, Texas 313926, Agricultural and Applied Economics Association.
    7. Souto, Augusto & Carriquiry, Miguel A. & Rosas, Juan Francisco, 2021. "Assessing the Impact of Agricultural Intensification on Water Pollution: An Integrated Model Assessment of the San Salvador Basin in Uruguay," 2021 Annual Meeting, August 1-3, Austin, Texas 314037, Agricultural and Applied Economics Association.
    8. Ancev, Tihomir & Carriquiry, Miguel A. & Frabasile, Franco & Saracho, Andres & Rosas, Juan Francisco, 2023. "The assessment of economic and environmental impacts of water use efficiency and farm practices through an economic and biophysical integrated model," 2023 Annual Meeting, July 23-25, Washington D.C. 335895, Agricultural and Applied Economics Association.
    9. Yau-Huo Shr & Wendong Zhang, 2021. "Do Iowa Residents and Farmers Care about Improving Water Quality and Reducing Harmful Algal Blooms? Results from Two Household Surveys," Center for Agricultural and Rural Development (CARD) Publications 21-pb32, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    10. Madhu Khanna, 2022. "Breakthroughs at the disciplinary nexus: Rewards and challenges for applied economists," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(2), pages 475-492, March.

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    More about this item

    Keywords

    Resource and Environmental Policy Analysis; Environmental and Nonmarket Valuation; Food and Agricultural Policy Analysis;
    All these keywords.

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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