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Tradable Permits Under Threat to Manage Nonpoint Source Pollution

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  • Ali, M.
  • Le Grusse, P.
  • Rio, Patrick
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    Abstract

    In this article we treat the problem of nonpoint source pollution as a problem of moral hazard in group. To solve this kind of problem we consider a group performance based tax coupled to tradable permits market. The tax is activated if the group fails to meet the ambient standard. So the role of the tax is to provide an incitation to ensure that the agents provide the abatement level necessary to achieve the standard. The role of the tradable permits market is to distribute effectively this abatement level through the price of the permits which rises with the exchange of the permits.

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    File URL: http://purl.umn.edu/44414
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    Bibliographic Info

    Paper provided by European Association of Agricultural Economists in its series 2008 International Congress, August 26-29, 2008, Ghent, Belgium with number 44414.

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    Date of creation: 2008
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    Handle: RePEc:ags:eaae08:44414

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    Related research

    Keywords: nonpoint source pollution; ambient tax; tradable permits market; Environmental Economics and Policy;

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    1. Gregory L. Poe & William D. Schulze & Kathleen Segerson & Jordan F. Suter & Christian A. Vossler, 2004. "Exploring the Performance of Ambient-Based Policy Instruments When Nonpoint Source Polluters Can Cooperate," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(5), pages 1203-1210.
    2. Segerson, Kathleen & Wu, JunJie, 2006. "Nonpoint pollution control: Inducing first-best outcomes through the use of threats," Journal of Environmental Economics and Management, Elsevier, vol. 51(2), pages 165-184, March.
    3. François Cochard & Marc Willinger & Anastasios Xepapadeas, 2005. "Efficiency of nonpoint source pollution instruments: an experimental study," Working Papers 23298, Institut National de la Recherche Agronomique, France.
    4. Spraggon, John, 2004. "Testing ambient pollution instruments with heterogeneous agents," Journal of Environmental Economics and Management, Elsevier, vol. 48(2), pages 837-856, September.
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