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Endogenous Transport Coefficients: Implications for Improving Water Quality from Multi-Contaminants in an Agricultural Watershed

  • Anastasia Lintner

    ()

  • Alfons Weersink

The effectiveness of imperfect pollution control instruments is examined for a diffuse source, multi-contaminant problem in which the transport coefficients for sediment-bound residuals are endogenous. Similar evaluations fix the percentage of sediment deposited and optimize either for a single firm managing the whole watershed or on a firm by firm basis. This study shows that ignoring the dependence of the transport coefficients on intervening land uses creates a positive externality. The filtering potential of activities conducted by firms close to the receptor permits firms further away to undertake more profitable but erosive practices. Optimizing management choices, and consequently endogenizing the transport coefficients, for all firms simultaneously removes the externality. An empirical application combines hydrological simulation models with an economic optimization model for nutrient pollution of surface and ground water within an agricultural watershed. Although firms are homogeneous in abatement costs, differences in spatial location leave uniform instruments unable to achieve the water quality goal efficiently. An ambient tax/subsidy scheme can achieve the water quality goal efficiently but the informational requirements will be excessive in most situations where the transport mechanisms for residuals are dependent upon the practices of independent decision making units. Copyright Kluwer Academic Publishers 1999

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File URL: http://hdl.handle.net/10.1023/A:1008395209939
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Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 14 (1999)
Issue (Month): 2 (September)
Pages: 269-296

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Handle: RePEc:kap:enreec:v:14:y:1999:i:2:p:269-296
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  1. Braden, John B. & Larson, Robert S. & Herricks, Edwin E., 1990. "Impact Targets versus Discharge Standards in Agricultural Pollution Management," 1990 Conference (34th), February 13-15, 1990, Brisbane, Australia 144912, Australian Agricultural and Resource Economics Society.
  2. Jia Hua Pan & Ian Hodge, 1994. "Land Use Permits As An Alternative To Fertiliser And Leaching Taxes For The Control Of Nitrate Pollution," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(1), pages 102-112.
  3. Hanley, Nick, 1990. "The Economics of Nitrate Pollution," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 17(2), pages 129-51.
  4. Segerson, Kathleen, 1988. "Uncertainty and incentives for nonpoint pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 87-98, March.
  5. D. Peter Stonehouse & Martin Bohl, 1990. "Land Degradation Issues in Canadian Agriculture," Canadian Public Policy, University of Toronto Press, vol. 16(4), pages 418-431, December.
  6. Aziz Bouzaher & John B. Braden & Gary V. Johnson, 1990. "A Dynamic Programming Approach to a Class of Nonpoint Source Pollution Control Problems," Management Science, INFORMS, vol. 36(1), pages 1-15, January.
  7. Andrew Moxey & Ben White, 1994. "Efficient Compliance With Agricultural Nitrate Pollution Standards," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(1), pages 27-37.
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