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Efficiency of Nonpoint Source Pollution Instruments : An Experimental Study

Author

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  • Francois Cochard

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique, LERNA - Economie des Ressources Naturelles - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - INRA - Institut National de la Recherche Agronomique - CEA - Commissariat à l'énergie atomique et aux énergies alternatives)

  • Marc Willinger

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

  • Anastasios Xepapadeas

    (UOC - University of Crete [Heraklion])

Abstract

In nonpoint source pollution problems, the regulator does not observe each polluter's individual emission, which prevents him from using the conventional policy instruments. Therefore, new instruments have been designed to regulate this type of pollution. In an experiment, we compare the efficiency of some of these instruments: an input-based tax, an ambient tax/subsidy, an ambient tax, and a group fine. We assume that polluters themselves are affected by environmental damages. A control session without any regulation is also carried out in order to study the "status quo" situation. Our experimental data show that the input tax and the ambient tax are very efficient and reliable, and the group fine is fairly efficient and reliable. These instruments improve social welfare with respect to the status quo. On the contrary, the ambient tax/subsidy decreases social welfare with respect to the status quo, and its effect is very unreliable.

Suggested Citation

  • Francois Cochard & Marc Willinger & Anastasios Xepapadeas, 2005. "Efficiency of Nonpoint Source Pollution Instruments : An Experimental Study," Post-Print hal-00279148, HAL.
    • Handle: RePEc:hal:journl:hal-00279148
    DOI: 10.1007/s10640-004-5986-y
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