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The Allocation of Nutrient Load Reduction across a Watershed: Assessing Delivery Coefficients as an Implementation Tool

  • Hongli Feng
  • Manoj Jha
  • Phil Gassman

Delivery coefficients have long been used in economic analysis of policies that seek to address environmental problems like water pollution. However, the derivation and validity of delivery coefficients have not been examined carefully by empirical analyses. We derived estimates of delivery coefficients and then evaluated them as a bridge between complex simulation models and economic policies like water quality trading. We found that the allocations achieved outcomes that differed from intended water quality targets by less than 10% in most cases. For the least-cost allocation with heterogeneous costs, cost savings significantly outweighed deviations from water quality targets. Copyright 2009, Oxford University Press.

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File URL: http://hdl.handle.net/10.1111/j.1467-9353.2008.01432.x
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Article provided by Agricultural and Applied Economics Association in its journal Review of Agricultural Economics.

Volume (Year): 31 (2009)
Issue (Month): 1 ()
Pages: 183-204

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Handle: RePEc:oup:revage:v:31:y:2009:i:1:p:183-204
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  1. Hung, Ming-Feng & Shaw, Daigee, 2005. "A trading-ratio system for trading water pollution discharge permits," Journal of Environmental Economics and Management, Elsevier, vol. 49(1), pages 83-102, January.
  2. Stavins, Robert & Newell, Richard, 2000. "Cost Heterogeneity and the Potential Savings from Market-Based Policies," Discussion Papers dp-00-10-rev, Resources For the Future.
  3. Babcock, Bruce A., 1992. "Effects of Uncertainty on Optimal Nitrogen Applications (The)," Staff General Research Papers Archive 10588, Iowa State University, Department of Economics.
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