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

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.Environmental Economics and Policy,

UNCERTAINTY AND THE REGULATION OF NITRATE POLLUTION FROM AGRICULTURE

A simulation of U.S. corn production compares four environmental policies for controlling agricultural nitrate pollution. Public uncertainty about key economic parameters are considered. Results indicate that policy choice is sensitive to commodity programs and the public information structure. Agricultural research benefits are also sensitive to agricultural environmental policy choices.environmental policy, nonpoint pollution, uncertainty, value of information, Environmental Economics and Policy,

UNCERTAINTY AND THE REGULATION OF NITRATE POLLUTION FROM AGRICULTURE

A simulation of U.S. corn production compares four environmental policies for controlling agricultural nitrate pollution. Public uncertainty about key economic parameters are considered. Results indicate that policy choice is sensitive to commodity programs and the public information structure. Agricultural research benefits are also sensitive to agricultural environmental policy choices

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

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