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Cost-effective policies for improving water quality by reducing nitrate emissions from diverse dairy farms: An abatement–cost perspective

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  • Doole, Graeme J.

Abstract

A flexible and replicable approach for the appraisal of the cost-effectiveness of various policy instruments for the regulation of nonpoint pollution from heterogeneous farms is presented. The framework is employed to evaluate three regulatory instruments for achieving reductions in nitrate leaching among a large population of dairy farms in the Waikato region of New Zealand. These instruments are (1) a differentiated policy that allows individual abatement effort to vary among farms to satisfy a catchment-wide reduction in leaching load, (2) a uniform policy that requires all farms to reduce emissions by a constant proportion, and (3) a threshold policy that requires all farms to emit beneath a given threshold leaching load. A 30% reduction in leaching will cost around 1.4, 1.96, and 4.41 million dollars across the catchment with a differentiated, uniform, and threshold policy, respectively. In comparison, a 50% reduction in leaching will cost around 7.77, 8.58, and 11.24 million dollars across the catchment with a differentiated, uniform, and threshold policy, respectively. Thus, a differentiated policy achieves required environmental outcomes at least cost. This result highlights the value of modelling heterogeneous farms in policy evaluation for nonpoint pollution control.

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  • Doole, Graeme J., 2012. "Cost-effective policies for improving water quality by reducing nitrate emissions from diverse dairy farms: An abatement–cost perspective," Agricultural Water Management, Elsevier, vol. 104(C), pages 10-20.
  • Handle: RePEc:eee:agiwat:v:104:y:2012:i:c:p:10-20
    DOI: 10.1016/j.agwat.2011.11.007
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    Cited by:

    1. Holland, Luke M. & Doole, Graeme J., 2014. "Implications of fairness for the design of nitrate leaching policy for heterogeneous New Zealand dairy farms," Agricultural Water Management, Elsevier, vol. 132(C), pages 79-88.
    2. Paragahawewa, Upananda H. & Doole, Graeme J. & Bower, Bob, 2015. "Is dilution the solution for water pollution? An economic analysis," 2015 Conference (59th), February 10-13, 2015, Rotorua, New Zealand 202984, Australian Agricultural and Resource Economics Society.
    3. Doole, Graeme J. & Kingwell, Ross, 2015. "Efficient economic and environmental management of pastoral systems: Theory and application," Agricultural Systems, Elsevier, vol. 133(C), pages 73-84.
    4. Chyzheuskaya, Aksana & O'Donoghue, Cathal & O'Neill, Stephen, 2014. "Using a farm micro-simulation model to evaluate the impact of the nitrogen reduct," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 3(4), pages 1-11.
    5. Jo Hendy & Levente Timar & Dominic White, 2018. "Land-use modelling in New Zealand: current practice and future needs," Working Papers 18_16, Motu Economic and Public Policy Research.
    6. Doole, Graeme J. & Romera, Alvaro J., 2014. "Implications of a nitrogen leaching efficiency metric for pasture-based dairy farms," Agricultural Water Management, Elsevier, vol. 142(C), pages 10-18.
    7. Doole, Graeme J. & Romera, Alvaro J., 2015. "Trade-offs between profit, production, and environmental footprint on pasture-based dairy farms in the Waikato region of New Zealand," Agricultural Systems, Elsevier, vol. 141(C), pages 14-23.
    8. repec:eee:agisys:v:154:y:2017:i:c:p:34-44 is not listed on IDEAS

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