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Tradeoffs in balancing multiple objectives of an integrated agricultural economic and environmental system

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  • Lakshminarayan, P. G.

Abstract

This research, which integrates the economic and environmental processes in a multiobjective framework to find comprehensive solution, is a departure from the traditional approach. The problem is motivated by multiattribute utility and social welfare theory, and the conditions for optimality are derived. Since agricultural nonpoint source pollution (NPS) pollution is a nonmarket externality, a motivation based on public policy and social costs is provided to include environmental quality decisions. A conceptual framework for integrating the multidisciplinary models is presented. The environmental data needs of the integrated system was obtained from spatially simulated predictions of the biogeophysical process model, a mathematical model mimicking the real-life processes. A novel statistical method called metamodeling was used to abstract the process model outputs into reduced form response functions (metamodels). Interfacing a regional resource adjustment model, characterized by a detailed fertilizer use and weed control sub-sector, with the spatially aggregated environmental indicators alternative policies were jointly evaluated;This system was empirically verified for a major watershed in the Midwest United States, where the conflicts from unregulated agricultural economic activity and environmental degradation is a major concern. This region's intensive row cropping system of corn and soybeans requiring heavy doses of commercial fertilizers and herbicides has posed significant threat to soil and water quality and resource use sustainability. A comprehensive biophysical model EPIC (Erosion Productivity Impact Calculator) was used to simulate crop growth, soil erosion, and chemical fate under alternative tillage and conservation practices. A scientific spatial sampling and simulation experiment design produced spatial forecasts and distributions of soil erosion, and runoff/leaching losses of nitrate-N, phosphorous, and atrazine;Results indicate that piecemeal approach emphasizing a single indicator, say soil erosion or surface runoff reduction, will impair groundwater quality and vice versa. Soil conservation policy also reduces surface runoff loadings even though it costs 1.88 per ton of soil loss reduction so as to reach a 2T standard, which is a 21% reduction in net returns from baseline, but the average nitrate-N and atrazine leaching losses increase by 49% and 18%. The multiple objective scenario of protecting soil and groundwater quality simultaneously results in a 43% reduction in net returns for a 50% reduction in soil erosion (2T level) and no increase in surface and groundwater loadings of nitrates and atrazine. (Abstract shortened by UMI.)

Suggested Citation

  • Lakshminarayan, P. G., 1993. "Tradeoffs in balancing multiple objectives of an integrated agricultural economic and environmental system," ISU General Staff Papers 1993010108000011833, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genstf:1993010108000011833
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