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Cac Versus Incentive-Based Instruments in Agriculture: The Case of the Conservation Reserve Program

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  • Feng, Hongli
  • Kling, Catherine L.
  • Kurkalova, Lyubov A.
  • Secchi, Silvia

Abstract

In this paper, we examine command-and-control (CAC) policies and market-based instruments (MBI) in the context of the Conservation Reserve Program (CRP). The CRP, an MBI in the form of subsidies, is by far the largest agro-environmental policy implemented to date. We compare the environmental performance of the CRP as implemented to a few counterfactual CAC polices using EPIC (Environmental Policy Integrated Climate), a bio-physical simulation model. In the context of multiple environmental indicators, no policy alternative emerges as a clear winner. The importance of the choice and design of CAC policies is emphasized. Keywords: command-and-control policy, Conservation Reserve Program, market-based instrument.

Suggested Citation

  • Feng, Hongli & Kling, Catherine L. & Kurkalova, Lyubov A. & Secchi, Silvia, 2007. "Cac Versus Incentive-Based Instruments in Agriculture: The Case of the Conservation Reserve Program," Staff General Research Papers Archive 10796, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:10796
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    Keywords

    command-and-control policy; conservation reserve program; market-based instrument.;
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