The Performance of Compliance Measures and Instruments for Nitrate Nonpoint Pollution Control under Uncertainty and Alternative Agricultural Commodity Policy Regimes

By Abrahams, Nii Adote; Shortle, James S. | Agricultural and Resource Economics Review, April 2004 | Go to article overview

The Performance of Compliance Measures and Instruments for Nitrate Nonpoint Pollution Control under Uncertainty and Alternative Agricultural Commodity Policy Regimes


Abrahams, Nii Adote, Shortle, James S., Agricultural and Resource Economics Review


Following Weitzman (1974), there is ample theoretical literature indicating that choice of pollution control instruments under conditions of uncertainty will affect the expected net benefits that can be realized from environmental protection. However, there is little empirical research on the ex ante efficiency of alternative instruments for controlling water, or other types of pollution, under uncertainty about costs and benefits. Using a simulation model that incorporates various sources of uncertainty, the ex ante efficiency of price and quantity controls applied to two alternative policy targets, fertilizer application rates and estimated excess nitrogen applications, are examined under varying assumptions about agricultural income support policies. Results indicate price instruments outperform quantity instruments. A tax on excess nitrogen substantially outperforms a fertilizer tax in the scenario with support programs, while the ranking is reversed in the scenario without support programs.

Key Words: nonpoint pollution policy, policy coordination, uncertainty

Building on the seminal work of Weitzman (1974), a small but important literature has emerged on the choice between environmental policy instruments when there is uncertainty on the part of environmental authorities about the costs and benefits of pollution control. Much of the literature (e.g., Adar and Griffin, 1976; Yohe, 1978; Stavins, 1996) is focused on the choice between emissions-based price and quantity controls. Standard results include the finding that the expected net benefits of optimally designed emissions price and quantity controls will generally differ when policy makers are uncertain about pollution control costs, with the difference depending on the relative slopes of the marginal benefits and costs, and sign and size of the covariance between marginal benefits and costs.

The emissions-based focus of this research limits its direct relevance to nonpoint source pollution problems since a defining characteristic of nonpoint pollution is that emissions from individual sources cannot be metered at reasonable cost. With unobservable pollutant flows, other constructs must generally be used to monitor performance and as a basis for the application of policy instruments (Griffin and Bromley, 1982; Shortle and Dunn, 1986; Segerson, 1988; Xepapadeas, 1995). Options for nonpoint bases include inputs or techniques that are correlated with pollution flows (e.g., use of polluting inputs such as fertilizers), emissions proxies constructed from observations of inputs or techniques that influence the distribution of pollution flows (e.g., estimates of field losses of fertilizer residuals to surface or ground waters), and ambient environmental conditions (e.g., nutrient concentrations in ground or surface waters) (Braden and Segerson, 1993). With these options, the choice of instruments for nonpoint pollution control involves not only a choice between price or quantity mechanisms (or a mixture), but also a choice between target or bases to which they can be applied.

In this paper, we examine the choice between alternative instruments for reducing nitrate pollution from agricultural nonpoint sources. Reducing nitrates in ground and surface waters from agriculture has emerged as a major water pollution control policy objective (U.S. Environmental Protection Agency, 2000). The instruments considered are differentiated according to compliance measures (nitrate inputs, proxies for nitrate losses to the environment) and the types of regulations applied (prices, quantity controls). Each of these instruments is of practical interest, with instances of their use in the United States and Europe (Ribaudo, 2001; Horan and Shortle, 2001; Hanley, 2001).

In addition to our interest in the implications of uncertainty for the choice of instruments, we examine the sensitivity of environmental policy performance to other societal choices that affect welfare effects and producer responses. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Performance of Compliance Measures and Instruments for Nitrate Nonpoint Pollution Control under Uncertainty and Alternative Agricultural Commodity Policy Regimes
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.