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Economic Instruments For Nonpoint Source Water Pollution: Options For The Swan-Canning River System

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  • Gordon, Simon
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    Abstract

    The management of nonpoint source water pollution presents an immense challenge to economists and policy makers alike. A complex array of physical, economic, political and institutional barriers lie between theoretically appealing textbook prescriptions and their transition into successful real-world solutions. Underlying beliefs about property rights, interest group politics and the transaction costs associated with designing and implementing successful measures have all played a particularly critical role. Building on the theoretical literature and the lessons provided by the practical use of economic instruments for nonpoint source water pollution management around the world, this paper considers these issues in the context of the Swan-Canning river system in Perth. Four innovative economic instruments for the management of nonpoint source nutrient pollution in that system are discussed: auctioned best management practice payments; best management practice incentive charges; an urban nonpoint source emissions offset bank; and a catchment based licensing/trading program.

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    Bibliographic Info

    Paper provided by Australian Agricultural and Resource Economics Society in its series 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia with number 57873.

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    Date of creation: Feb 2003
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    Handle: RePEc:ags:aare03:57873

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    Related research

    Keywords: Environmental Economics and Policy; Land Economics/Use;

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    1. Stavins, Robert, 2004. "Environmental Economics," Working Paper Series rwp04-051, Harvard University, John F. Kennedy School of Government.
    2. 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.
    3. Ekins, Paul, 1999. "European environmental taxes and charges: recent experience, issues and trends," Ecological Economics, Elsevier, vol. 31(1), pages 39-62, October.
    4. Segerson, Kathleen, 1988. "Uncertainty and incentives for nonpoint pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 87-98, March.
    5. Ribaudo, Marc O. & Heimlich, Ralph & Claassen, Roger & Peters, Mark, 2001. "Least-cost management of nonpoint source pollution: source reduction versus interception strategies for controlling nitrogen loss in the Mississippi Basin," Ecological Economics, Elsevier, vol. 37(2), pages 183-197, May.
    6. Portney, Paul & Oates, Wallace, 2001. "The Political Economy of Environmental Policy," Discussion Papers dp-01-55, Resources For the Future.
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    8. Randhir, Timothy O. & Lee, John G., 1997. "Economic And Water Quality Impacts Of Reducing Nitrogen And Pesticide Use In Agriculture," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 26(1), April.
    9. Stavins, Robert, 2001. "Lessons from the American Experiment with Market-Based Environmental Policies," Working Paper Series rwp01-032, Harvard University, John F. Kennedy School of Government.
    10. Uwe Latacz-Lohmann & Carel Van der Hamsvoort, 1997. "Auctioning Conservation Contracts: A Theoretical Analysis and an Application," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 407-418.
    11. Herath, Deepananda P.B. & Weersink, Alfons, 1999. "Transaction Costs, Economic Instruments And Environmental Policies," 1999 Annual meeting, August 8-11, Nashville, TN 21588, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Alfons Weersink & John R. Livernois & Jason F. Shogren & James S. Shortle, 1998. "Economic Instruments and Environmental Policy in Agriculture," Canadian Public Policy, University of Toronto Press, vol. 24(3), pages 309-327, September.
    13. Hahn, Robert W, 1989. "Economic Prescriptions for Environmental Problems: How the Patient Followed the Doctor's Orders," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 95-114, Spring.
    14. Stavins, Robert & Keohane, Nathaniel & Revesz, Richard, 1997. "The Positive Political Economy of Instrument Choice in Environmental Policy," Discussion Papers dp-97-25, Resources For the Future.
    15. Woerdman, Edwin, 2001. "Emissions trading and transaction costs: analyzing the flaws in the discussion," Ecological Economics, Elsevier, vol. 38(2), pages 293-304, August.
    16. Laura McCann & K. William Easter, 1999. "Transaction Costs of Policies to Reduce Agricultural Phosphorous Pollution in the Minnesota River," Land Economics, University of Wisconsin Press, vol. 75(3), pages 402-414.
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