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Nutrient Allowances Market and Wetland Abatement

Author

Listed:
  • Natacha Fauvet

    (GREThA)

  • Jean-Christophe Pereau

    (GREThA)

Abstract

The buffering function of wetlands is one of the most efficient mechanisms for regulating agricultural runoffs and water pollution. The aim of this paper is to show how farmers could use wetland abatement as a way to achieve pollution targets set by a regulator in a nutrient allowance market. The introduction of allowances into farmers’ maximisation programs creates an incentive to either reduce fertilizer use per hectare of crops, or to restore wetlands on agricultural land. Comparative statics results express a negative correlation between the quantity of allowances per farmer and the fertilizer use. Furthermore, the quantity of allowances per farmer is negatively correlated to the wetland surface area.

Suggested Citation

  • Natacha Fauvet & Jean-Christophe Pereau, 2014. "Nutrient Allowances Market and Wetland Abatement," Working Papers 2014.06, FAERE - French Association of Environmental and Resource Economists.
    • Handle: RePEc:fae:wpaper:2014.06
    as

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    File URL: http://www.faere.fr/pub/WorkingPapers/Fauvet_Pereau_FAERE_WP2014.06.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Nutrients; Wetlands; Agriculture; Permit market; Regulation; Allowances; Runoffs;
    All these keywords.

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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