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The Use of Markets To Increase Private Investment in Environmental Stewardship

  • Ribaudo, Marc
  • Hansen, LeRoy T.
  • Hellerstein, Daniel
  • Greene, Catherine R.

U.S. farmers and ranchers produce a wide variety of commodities for food, fuel, and fiber in response to market signals. Farms also contain significant amounts of natural resources that can provide a host of environmental services, including cleaner air and water, flood control, and improved wildlife habitat. Environmental services are often valued by society, but because they are a public good—that is, people can obtain them without paying for them—farmers and ranchers may not benefit financially from producing them. As a result, farmers and ranchers under-provide these services. This report explores the use of market mechanisms, such as emissions trading and eco-labels, to increase private investment in environmental stewardship. Such investments could complement or even replace public investments in traditional conservation programs. The report also defines roles for government in the creation and function of markets for environmental services.

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File URL: http://purl.umn.edu/56473
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Paper provided by United States Department of Agriculture, Economic Research Service in its series Economic Research Report with number 56473.

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Date of creation: Sep 2008
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Handle: RePEc:ags:uersrr:56473
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  1. Boyd, James & Banzhaf, H. Spencer, 2006. "What Are Ecosystem Services?," Discussion Papers dp-06-02, Resources For the Future.
  2. Lohr, Luanne & Salomonsson, Lennart, 2000. "Conversion subsidies for organic production: results from Sweden and lessons for the United States," Agricultural Economics, Blackwell, vol. 22(2), pages 133-146, March.
  3. Shabman, Leonard & Scodari, Paul, 2004. "Past, Present, and Future of Wetlands Credit Sales," Discussion Papers dp-04-48, Resources For the Future.
  4. Robert D. Weaver & David J. Evans & A. E. Luloff, 1992. "Pesticide use in tomato production: Consumer concerns and willingness-to-pay," Agribusiness, John Wiley & Sons, Ltd., vol. 8(2), pages 131-142.
  5. John M. Antle, 1999. "The New Economics of Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 993-1010.
  6. Stavins Robert N., 1995. "Transaction Costs and Tradeable Permits," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 133-148, September.
  7. Cason, T.N. & Gangadharan, L., 1999. "Environmental Labeling and Incomplete Consumer Information in Laboratory Markets," Department of Economics - Working Papers Series 708, The University of Melbourne.
  8. Greene, Catherine R., 2001. "U.S. Organic Farming Emerges in the 1990s: Adoption of Certified Systems," Agricultural Information Bulletins 33777, United States Department of Agriculture, Economic Research Service.
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