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The Gains from Differentiated Policies to Control Stock Pollution when Producers Are Heterogeneous

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  • David Zilberman

Abstract

We derive optimal input taxes to control stock pollution problems generated by heterogeneous agents. The taxes vary over time and in response to differences of asset quality and technology choice. We also derive second-best policies and compare them to the efficient policy and also among themselves. Different policies will affect the timing for when, and the extent to which, conservation technologies are adopted. A numerical example, based on the California drainage problem, shows significant efficiency gains from the optimal policy compared to no intervention, but much of the gains are lost with second-best interventions. The gains from optimal policies do not always increase with the degree of heterogeneity. Copyright 2008, Oxford University Press.

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  • David Zilberman, 2008. "The Gains from Differentiated Policies to Control Stock Pollution when Producers Are Heterogeneous," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(4), pages 1059-1073.
  • Handle: RePEc:oup:ajagec:v:90:y:2008:i:4:p:1059-1073
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2008.01168.x
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    Cited by:

    1. Anna Lungarska & Pierre-Alain Jayet, 2018. "Impact of Spatial Differentiation of Nitrogen Taxes on French Farms’ Compliance Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(1), pages 1-21, January.
    2. Fenichel, Eli P. & Abbott, Joshua K., 2014. "Heterogeneity and the fragility of the first best: Putting the “micro” in bioeconomic models of recreational resources," Resource and Energy Economics, Elsevier, vol. 36(2), pages 351-369.
    3. Hongxing Liu & Wendong Zhang & Elena Irwin & Jeffrey Kast & Noel Aloysius & Jay Martin & Margaret Kalcic, 2020. "Best Management Practices and Nutrient Reduction: An Integrated Economic-Hydrologic Model of the Western Lake Erie Basin," Land Economics, University of Wisconsin Press, vol. 96(4), pages 510-530.
    4. Gopalakrishnan, Sathya & Liu, Hongxing, 2018. "Land-lake Dynamics: Are there Welfare Gains from Targeted Policies in a Heterogeneous Landscape," 2018 Annual Meeting, August 5-7, Washington, D.C. 274310, Agricultural and Applied Economics Association.
    5. Catherine L. Kling & Raymond W. Arritt & Gray Calhoun & David A. Keiser, 2016. "Research Needs and Challenges in the FEW System: Coupling Economic Models with Agronomic, Hydrologic, and Bioenergy Models for Sustainable Food, Energy, and Water Systems," Center for Agricultural and Rural Development (CARD) Publications 16-wp563, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    6. Martín-Herrán, Guiomar & Rubio, Santiago J., 2016. "The Strategic Use of Abatement by a Polluting Monopoly," ETA: Economic Theory and Applications 244532, Fondazione Eni Enrico Mattei (FEEM).
    7. Anastasios Xepapadeas, 2022. "On the optimal management of environmental stock externalities," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 119(24), pages 2202679119-, June.
    8. Gries, Thomas, 2011. "Climate and Industrial Policy in an Asymmetric World," WIDER Working Paper Series 079, World Institute for Development Economic Research (UNU-WIDER).
    9. Catherine L. Kling & Raymond W. Arritt & Gray Calhoun & David A. Keiser, 2017. "Integrated Assessment Models of the Food, Energy, and Water Nexus: A Review and an Outline of Research Needs," Annual Review of Resource Economics, Annual Reviews, vol. 9(1), pages 143-163, October.
    10. James Shortle & Richard D. Horan, 2017. "Nutrient Pollution: A Wicked Challenge for Economic Instruments," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(02), pages 1-39, April.
    11. William Brock & Anastasios Xepapadeas, 2020. "Spatial Environmental and Resource Economics," DEOS Working Papers 2002, Athens University of Economics and Business.
    12. Iho, Antti & Laukkanen, Marita, 2012. "Precision phosphorus management and agricultural phosphorus loading," Ecological Economics, Elsevier, vol. 77(C), pages 91-102.
    13. Iho, Antti & Laukkanen, Marita, 2009. "Dynamically Optimal Phosphorus Management and Agricultural Water Protection," Discussion Papers 54285, MTT Agrifood Research Finland.
    14. Guiomar Martín-Herrán & Santiago J. Rubio, 2016. "The Strategic Use of Abatement by a Polluting Monopoly," Working Papers 2016.58, Fondazione Eni Enrico Mattei.
    15. Zilberman, David & Segerson, Kathleen, 2012. "Top Ten Design Elements to Achieve More Efficient Conservation Programs," C-FARE Reports 156623, Council on Food, Agricultural, and Resource Economics (C-FARE).
    16. Arguedas, Carmen & Cabo, Francisco & Martín-Herrán, Guiomar, 2020. "Enforcing regulatory standards in stock pollution problems," Journal of Environmental Economics and Management, Elsevier, vol. 100(C).
    17. Anne-Sarah Chiambretto & Elsa Martin, 2020. "Water Quantity Management in a Heterogeneous Landscape with Farsighted Farmers," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(3), pages 593-613, November.

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