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The Allocation of Nutrient Load Reduction Across a Watershed: Assessing Delivery Coefficients As an Implementation Tool

  • Feng, Hongli
  • Jha, Manoj
  • Gassman, Philip W.

Delivery coefficients have long been used in economic analysis of policies that seek to address environmental problems like water pollution (Montgomery, 1972). However, the derivation and validity of delivery coefficients have not been examined carefully by empirical analyses. In this study, we derived estimates of delivery coefficients and then evaluated them as a bridge between complex biophysical models and economic policies. Specifically, delivery coefficients were first derived for the effects of nitrogen application reduction based on the simulation results of a watershed based model, the Soil and Water Assessment Tool (SWAT). Nutrient load reduction responsibilities were then allocated to subwatersheds based on the delivery coefficients using four different allocation principles. We found that the allocations based on delivery coefficients achieved results that differed from the water quality goals by only a few percentage points in general. Moreover, our results indicated that potential cost savings, measured in percentages, outweighed the deviation from water quality goals.

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File URL: http://www.econ.iastate.edu/sites/default/files/publications/papers/p5355-2006-03-24.pdf
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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12554.

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Date of creation: 24 Mar 2006
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Publication status: Published in Review of Agricultural Economics, Spring 2009, vol. 31, pp. 183-204
Handle: RePEc:isu:genres:12554
Contact details of provider: Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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  1. 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.
  2. Babcock, Bruce A., 1992. "Effects of Uncertainty on Optimal Nitrogen Applications (The)," Staff General Research Papers 10588, Iowa State University, Department of Economics.
  3. Stavins, Robert & Newell, Richard, 2000. "Cost Heterogeneity and the Potential Savings from Market-Based Policies," Discussion Papers dp-00-10-rev, Resources For the Future.
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