Abatement Cost Heterogeneity and its Impact on Tradable Nitrogen Discharge Permits
AbstractNitrogen discharge into the Waikato River has been identified as the primary source of potential water quality degradation. Rising nitrogen levels in water are attributed to non point source pollution from agricultural activities. Pastoral farming is the predominant agricultural land use in the catchment. Increased nitrogen fertilizer use and higher stocking rates have the potential to increase the nitrogen loading into water. There is a range of best management practices and policies proposed to reduce nitrogen discharge from farming systems. Water quality trading is a policy tool that could improve the cost effectiveness of achieving environmental goals. Economic theory suggests that tradable pollution permit systems encourage polluters to reallocate pollution burdens to take advantage of any differences in marginal abatement costs. This paper develops an analytical frame work to derive nitrogen abatement costs for farms in a Waikato river sub-catchment. Policies and practices are evaluated using a bio-economic model of a typical pastoral farm in the Waikato river sub-catchment. Implications of pollution trading at the farm level are examined using programming simulation models.
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Bibliographic InfoPaper provided by New Zealand Agricultural and Resource Economics Society in its series 2006 Conference, August 24-25, 2006, Nelson, New Zealand with number 31972.
Date of creation: 2006
Date of revision:
Heterogeneity; tradable discharge permits; non-point pollution; marginal abatement cost; Environmental Economics and Policy;
Other versions of this item:
- Ramilan, Thiagarajah & Scrimgeour, Frank G., 2006. "Abatement Cost Heterogeneity and its Impact on Tradable Nitrogen Discharge Permits," 2006 Conference, August 24-25, 2006, Nelson, New Zealand 31972, New Zealand Agricultural and Resource Economics Society.
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