IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Reversing the Property Rights: Practice-Based Approaches for Controlling Agricultural Nonpoint-Source Water Pollution When Emissions Aggregate Nonlinearly

Nonpoint-source pollution remains a troubling source of water quality problems despite decades of economics research on the matter. Among the chief difficulties for addressing the issue are the property rights assignments implicit in the current policy environment that favor agricultural nonpoint-source pollution, the unobservability of field-level emissions, and complex fate and transport relationships linking them to ambient water quality. Theoretical and practical considerations lead to the focus on observable abatement actions (conservation practices). Biophysical models are increasingly more capable of linking abatement actions to policy-relevant water quality outcomes. If costs of abatement actions are known, finding the least-cost mix of abatement actions is possible, while incorporating the nonlinearity of the pollution process. When costs are not known or information is incomplete, regulators can rely on flexible incentive-based programs, but the design of such programs is complicated by the complexities of emission aggregation. In this work, we focus on the regulator capable of focusing on nonpoint-source emitters. We address the design and performance of three practice-based approaches, ranging from the command-and-control approach mandating practices, to the more flexible performance standard approach where farmers are free to select the optimal mix of on-farm conservation practices, to a fully flexible approach where credits for conservation practices are freely tradable. We do so by utilizing the representation of the nonlinear emission aggregation (fate and transport) process (the Soil and Water Assessment Tool model), and consider cases ranging from the regulator having perfect information on the costs of conservation practices to no information at all. We show how workable programs utilizing the biophysical models and simulation-optimization approaches can be designed, and assess their performance relative to the efficient case. We find that flexible programs perform well both in terms of cost and water quality goals attainment. In particular, a trading program designed around an approximation of the nonlinear pollution process performs well, relative to first-best under no information on the cost of conservation practices.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: Full Text
Download Restriction: no

File URL:
File Function: Online Synopsis
Download Restriction: no

Paper provided by Center for Agricultural and Rural Development (CARD) at Iowa State University in its series Center for Agricultural and Rural Development (CARD) Publications with number 12-wp533.

in new window

Date of creation: Sep 2012
Handle: RePEc:ias:cpaper:12-wp533
Contact details of provider: Postal:
578 Heady Hall, Ames, Iowa 50011-1070

Phone: (515) 294-1183
Fax: (515) 294-6336
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. JunJie Wu & Bruce A. Babcock, 1996. "Contract Design for the Purchase of Environmental Goods from Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 935-945.
  2. Anastasia Lintner & Alfons Weersink, 1999. "Endogenous Transport Coefficients: Implications for Improving Water Quality from Multi-Contaminants in an Agricultural Watershed," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 14(2), pages 269-296, September.
  3. Horan, Richard D. & Shortle, James S. & Abler, David G., 1998. "Ambient Taxes When Polluters Have Multiple Choices," Journal of Environmental Economics and Management, Elsevier, vol. 36(2), pages 186-199, September.
  4. Segerson, Kathleen, 1988. "Uncertainty and incentives for nonpoint pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 87-98, March.
  5. Morgan, Cynthia L. & Coggins, Jay S. & Eidman, Vernon R., 2000. "Tradable Permits for Controlling Nitrates in Groundwater at the Farm Level: A Conceptual Model," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 32(02), pages 249-258, August.
  6. Morgan, Cynthia L. & Coggins, Jay S. & Eidman, Vernon R., 2000. "Tradable Permits For Controlling Nitrates In Groundwater At The Farm Level: A Conceptual Model," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(02), August.
  7. Hung, Ming-Feng & Shaw, Daigee, 2005. "A trading-ratio system for trading water pollution discharge permits," Journal of Environmental Economics and Management, Elsevier, vol. 49(1), pages 83-102, January.
  8. Cabe, Richard & Herriges, Joseph A., 1992. "The regulation of non-point-source pollution under imperfect and asymmetric information," Journal of Environmental Economics and Management, Elsevier, vol. 22(2), pages 134-146, March.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ias:cpaper:12-wp533. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.