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Two Birds, One Stone: Responses of Agriculture to Water Pollution Regulation

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  • Gong, Binlei
  • Li, Haoyang
  • Lin, Liguo
  • Ling, Hanxiang

Abstract

This paper exploits China’s Water Quality Control Assessment Plan as a natural experiment to examine the impact of environmental regulation on fertilizer use and food security. Leveraging variation in enforcement incentives across counties determined by their locations relative to water quality monitoring stations, we document a 5.9 % fertilizer application reduction in upstream counties, driven by reduction in public financial support for agriculture. Salience of information highlighting agriculture as a major pollution source reinforces enforcement incentives in curbing fertilizer use. Agricultural output remained stable, reflecting both prior overuse of fertilizer and slight productivity gains likely associated with improved water quality.
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Suggested Citation

  • Gong, Binlei & Li, Haoyang & Lin, Liguo & Ling, Hanxiang, 2024. "Two Birds, One Stone: Responses of Agriculture to Water Pollution Regulation," 2024 Annual Meeting, July 28-30, New Orleans, LA 343700, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea24:343700
    DOI: 10.22004/ag.econ.343700
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    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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