Combinación de instrumentos económicos para el control de la contaminación difusa en el sector porcino de Aragón

Resumen:La contaminación por nitratos derivada de la actividad ganadera es un problema de gran relevancia social en muchas zonas de Aragón, donde la elevada concentración de explotaciones porcinas supone una amenaza para la calidad de los cursos de agua. El objetivo de este trabajo es diseñar una combinación de instrumentos económicos eficientes que pueden reducir las exigencias de información y control respecto al basado en un impuesto pigouviano sobre las emisiones contaminantes. El análisis teórico se completa con una aplicación numérica, para la cual se utilizan datos de una explotación típica de la región de estudio.Abstract:Nonpoint source pollution from livestock activities is a relevant economic and social problem in many areas of Aragon, a Spanish region where the high concentration of pig firms is a potential threat for water resources quality. Designing an environmental policy to control nonpoint pollution is very difficult in practice. Due to the lack of powerful instruments, regulation in European Union member states is concentrated on command and control instruments (like technology related standards and best management practices). But these instruments often do not introduce economic incentive and farmers do not act voluntarily. In addition, since information problems prevent the use of first-best instruments, a theoretical rationale for combining instruments may exist. In this paper a combination of incentives to reduce nitrate emissions due to pig slurry management is proposed. The aim of this study is to obtain the combination of taxes and subsidies that attain the social optimum conditions and reduce the need for monitoring and enforcement. The theoretical approach of this work is based in a partial equilibrium model where a central regulator that maximizes social benefits of the region exists. In the private problem we assume the existence of a fixed number of perfectly competitive farmers that produce swine and use pig slurry as a fertilizer to cultivate crops. There are two decision variables in the maximization model: nitrogen and land use. In our analysis we aim to determine the first order conditions for the social and private maximization problems separately and then to design the policy instruments that can induce the social optimum. Five alternative situations have been considered: 1) the regulator have perfect information on emissions, 2) The regulator can only observe outputs of both production activities, 3) and 4) The regulator can observe only one output and one input, 5) The regulator can observe all inputs of agrarian activity. The results show that social optimum can be attained through several combinations of taxes and subsidies. Specifically, we obtain that the pigouvian tax on nitrate emissions can be substituted by taxes on pigs and crop yield, taxes on pigs and land use, taxes on crop yield and land use or taxes on nitrogen input and land use. Moreover, we discuss the influence of the particular specification of emissions function on the sign of alternative instruments. In the case of strictly convex pollution function, we obtain that in situations 4 and 5, the taxes on land use become negative (subsidies) while the sign of instruments in situations 2 and 3 cannot be determined a priori. In the case of strictly concave function, the taxes on land use become positive (true taxes) in situation 4 and 5. Finally, a linear emissions function imply that the taxes on land use in situations 4 and 5 and the tax on crop yield in situation 2 become zero, meaning that regulator can substitute the emission tax by a unique tax on polluting productive activity (pigs), on polluting input related with productive activity (nitrogen) or a combination of a non polluting activity tax (yield crop production) and a non polluting input subsidy (land use). From the perspective of the information needs of the two-part instruments designed, their advantage is they can partially avoid the obstacle for the regulation of nonpoint pollution since emissions are either not observable or cannot be observed at a reasonable cost. The design of these instruments requires that the regulator can monitor the amount of outputs and inputs used by farmers, which in principle would expect it easier to obtain than emissions. Moreover, the regulator should know the value of the marginal damage of pollution and the first derivative of pollution function (portion of the total nitrogen used emitted for the case of linear function). The numerical illustration of our study requires the functions and parameters of the theoretical model to be specified. Our study is based in real data from a typical farm located in Aragon, an autonomous community in Northeast Spain which is one of the main areas of intensive pig farming in the country and also in the European Union. Spain has the second largest swine population in the European Union, with 18% of the total production and Aragon accounts for 22 % of the total Spanish swine production. For our numerical analysis we consider the operational costs of an average farm located in the study area. The farm model reproduces the typical conditions of the region with respect to the farm size and biophysical data. The crop production is a strictly concave function of applied nitrogen and the emissions function follows a linear specification. In the results section the social and private values for all the outputs and inputs considered in the model are calculated and also we obtain the private benefit for farmer. Moreover, in order to analyse the current legislation in the European Union, we also consider the effects of an upper limit for swine manure application of 250 kg/ha on social and private values. The results show that the social optimum requires a reduction of 7.5 % in nitrate emissions with respect to private solution implying a reduction of 19.5 % in private benefits for the farmer. The calculation of taxes for the case of linear pollution function shows positive values for crop production (proper tax) and negative value for land use (subsidy) in situation III and positive values for swine production and nitrogen input for the rest of situations as expected. We conclude that the particular specification of emission function is a crucial aspect of the instruments design thus our findings highlight the importance of environmental regulators to invest in systems that provide greater information on nonpoint pollution problems by undertaking its own research to gather data, building long-term institutional relationships with regulated farmers and creating reward structures that give farmers incentives to reveal information truthfully to the regulator. Our results aim to contribute to the literature with respect to the design of specific control measures for the case of nonpoint pollution problems derived from livestock production.