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Stringency of environmental targets in animal agriculture: shedding light on policy with shadow prices

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  • Anni Huhtala
  • Per-Olov Marklund

Abstract

We present a framework for deriving shadow prices for regulations on manure-spreading in animal agriculture and demonstrate that these prices can be used as indicators of the stringency of environmental regulation. We illustrate our approach with the case of water protection measures implemented in Finland to restrict the use of phosphorus on livestock farms. The estimated shadow price of the nutrient limit lies in the range €60--125 per kilogram of bioavailable phosphorus in manure, assuming that output reduction is the only option for decreasing the amount of manure in manure-dense areas. However, instead of cutting output, farms may be able to avoid these high abatement costs by more efficient input use or alternative abatement methods. Oxford University Press and Foundation for the European Review of Agricultural Economics 2008; all rights reserved. For permissions, please email journals.permissions@oxfordjournals.org, Oxford University Press.

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  • Anni Huhtala & Per-Olov Marklund, 2008. "Stringency of environmental targets in animal agriculture: shedding light on policy with shadow prices," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 35(2), pages 193-217, June.
    • Handle: RePEc:oup:erevae:v:35:y:2008:i:2:p:193-217
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    File URL: http://hdl.handle.net/10.1093/erae/jbn025
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    Cited by:

    1. Erik Hille & Patrick Möbius, 2019. "Environmental Policy, Innovation, and Productivity Growth: Controlling the Effects of Regulation and Endogeneity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 1315-1355, August.
    2. Timo Sipiläinen & Anni Huhtala, 2013. "Opportunity costs of providing crop diversity in organic and conventional farming: would targeted environmental policies make economic sense?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 40(3), pages 441-462, July.
    3. Mamardashvili, Phatima & Emvalomatis, Grigorios & Jan, Pierrick, 2016. "Environmental Performance and Shadow Value of Polluting on Swiss Dairy Farms," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(2), May.
    4. Sipilainen, Timo & Huhtala, Anni, 2012. "Opportunity Costs of Providing Crop Diversity in Organic and Conventional Farming," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126652, International Association of Agricultural Economists.
    5. Abayateye, F. & Skolrud, T. & Galinato, G., 2018. "Environmental Regulation Stringency and U.S. Agriculture," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277138, International Association of Agricultural Economists.
    6. Hille, Erik & Shahbaz, Muhammad, 2019. "Sources of emission reductions: Market and policy-stringency effects," Energy Economics, Elsevier, vol. 78(C), pages 29-43.
    7. Wilhelm Althammer & Erik Hille, 2016. "Measuring climate policy stringency: a shadow price approach," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(4), pages 607-639, August.
    8. Theodoros Skevas & Teresa Serra, 2017. "Derivation of netput shadow prices under different levels of pest pressure," Journal of Productivity Analysis, Springer, vol. 48(1), pages 25-34, August.
    9. Sinyagin, Yury (Синягин, Юрий) & Sheburakov, Ilya (Шебураков, Илья), 2018. "Rationale and development of a model for increasing the efficiency and effectiveness of public civil servants on the basis of a person-centered approach to management [Обоснование И Разработка Моде," Working Papers 061819, Russian Presidential Academy of National Economy and Public Administration.

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