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The Economics of Nonpoint Source Pollution

  • Anastasios Xepapadeas

Nonpoint source (NPS) pollution refers to the form of pollution where neither the source nor the size of specific emissions can be observed and identified with sufficient accuracy. In NPS pollution the ambient concentration of pollutants associated with the individually unobserved emissions is typically observed. NPS pollution due to agricultural run-off is a major source of water pollution, eutrophication and hypoxia. Due to informational asymmetries and stochastic effects, the use of traditional environmental policy instruments such as emission taxes or tradable quotas to regulate NPS pollution is very difficult. This chapter reviews the main theoretical approaches, up to the present, to the regulation of NPS pollution � input-based schemes, ambient schemes, and endogenous monitoring � and discusses issues associated with NPS pollution regulation and their relation to the theoretically proposed instruments.

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Paper provided by Athens University of Economics and Business in its series DEOS Working Papers with number 1233.

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