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Green Payment Programs For Nonpoint Source Pollution Control: How Important Is Targeting For Cost-Effectiveness?

  • Baerenklau, Kenneth A.
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    Mechanism design theory is used to examine the case of a cost-minimizing regulator who uses input-reduction subsidies to meet an exogenously imposed ambient standard for nonpoint source pollution. A general result claimed for a welfare-maximizing equilibrium. Numerical results suggest the ability to directly target contracts reduces costs significantly for the regulator. But in the absence of this ability, indirect targeting reduces costs only slightly.

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    File URL: http://purl.umn.edu/31117
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    Article provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.

    Volume (Year): 27 (2002)
    Issue (Month): 02 (December)
    Pages:

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    Handle: RePEc:ags:jlaare:31117
    Contact details of provider: Web page: http://waeaonline.org/

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    1. Guesnerie, Roger & Seade, Jesus, 1982. "Nonlinear pricing in a finite economy," Journal of Public Economics, Elsevier, vol. 17(2), pages 157-179, March.
    2. Wu, JunJie & Babcock, Bruce A., 1995. "Optimal Design Of A Voluntary Green Payment Program Under Asymmetric Information," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(02), December.
    3. Segerson, Kathleen, 1988. "Uncertainty and incentives for nonpoint pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 87-98, March.
    4. Smith, Rodney B.W. & Tomasi, Theodore D., 1995. "Transaction Costs And Agricultural Nonpoint-Source Water Pollution Control Policies," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(02), December.
    5. Shoemaker, Robbin & Malik, Arun, 1993. "Optimal Cost-Sharing Programs to Reduce Agricultural Pollution," Technical Bulletins 157045, United States Department of Agriculture, Economic Research Service.
    6. 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.
    7. Shortle, James S., 1987. "Allocative Implications Of Comparisons Between The Marginal Costs Of Point And Nonpoint Source Pollution Abatement," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 16(1), April.
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