Nonpoint source pollution, space, time, and asymmetric information, a deposit refund approach

The incorporation of space allows the establishment of a more precise relationship between a contaminating input, a contaminating byproduct and emissions that reach the final receptor. However, the presence of asymmetric information impedes the implementation of the first-best policy. As a solution to this problem a site specific deposit refund system for the contaminating input and the contaminating byproduct are proposed. Moreover, the utilization of a successive optimization technique first over space and second over time enables definition of the optimal intertemporal site specific deposit refund system.nonpoint source pollution; spatial economics; deposit refund system; asymmetric information

Land Development and Pigouvian Taxes: The Case of Peatland

In this paper the determination of an optimal Pigouvian tax for a competitive firm when a negative production externality is present concurrent with the development of land for production purposes is analyzed within a dynamic framework. Conditions are established for a convex social net return function where a Pigouvian tax is not required or where the imposition of a Pigouvian tax leads to the decision not to develop the land at all. In the case of a concave social net return function the Pigouvian tax is either a linear or a nonlinear tax on the private net return

The Efficiency of Direct Payments versus Tax Reductions under Uncertainty

This paper analyzes the optimal behavior of farmers in the presence of direct payments and uncertainty. In an empirical analysis for Switzerland, it confirms previously obtained theoretical results and determines the magnitude of the theoretical predicted effects. The results show that direct payments increase agricultural production between 3.7% to 4.8%. Alternatively to direct payments, the production effect of tax reductions is evaluated in order to determine its magnitude. The empirical analysis corroborates the theoretical results of the literature and demonstrates that tax reductions are also distorting, but to a substantially lesser degree if losses are not offset. However, tax reductions, independently whether losses are offset or not, lead to higher government spending than pure direct payments.Uncertainty; Direct Payments; Income Tax; Reductions; Agriculture

Modelling Soil Erosion, Sediment Transport and Closely Related Hydrological Processes (Proceedings of a symposium held at Vienna

Abstract The validity of the EPIC (Erosion/Productivity Impact Calculator) model was tested for a site in the undulating ground moraine region of central Switzerland which has uniform soil and relief conditions (silt loam, 10% slope). The EPIC weather generator was used to generate long sequences of synthetic weather with the characteristics of the present-day. Based on these data, soil losses associated with different crop rotations and cultivation techniques for variable initial soil depths were simulated. The results are employed in an economic decision model where the choice of crops, associated with distinct erosion rates, allows the farmer to control soil loss. A first evaluation of the economic model indicates that the financial losses, attributed to soil erosion, are fairly small and hardly influence the long-term optimal behaviour of the farmer. Thus, there is a strong case for intervention by the government provided that society places a high value on the existence of non-eroded soil

Land Development and Pigouvian Taxes: The Case of Peatland

In this paper the determination of an optimal Pigouvian tax for a competitive firm when a negative production externality is present concurrent with the development of land for production purposes is analyzed within a dynamic framework. Conditions are established for a convex social net return function where a Pigouvian tax is not required or where the imposition of a Pigouvian tax leads to the decision not to develop the land at all. In the case of a concave social net return function the Pigouvian tax is either a linear or a nonlinear tax on the private net returns. Copyright 1997, Oxford University Press.

Book Reviews

ISSN:0165-1587ISSN:1464-361

Diversification in Agricultural Production: A Dynamic Model of Optimal Cropping to Manage Soil Erosion

A dynamic economic model of soil erosion is presented where the intensity of use of inputs and the choice of crops allow the farmer to control soil losses. The results show that it is predominately optimal to approach the singular-path/steady-state equilibrium most rapidly by the cultivation of a single crop. At the steady state, however, a mix of crops is cultivated. The promotion of erosion control practices on only high-erosion crops may reduce the long-run soil stock, whereas a tax on the land cultivated with a particular crop is shown to be effective in increasing the long-run soil stock. Copyright 1997, Oxford University Press.

Methods and Applications of Dynamic Optimization Techniques in Environmental and Resource Economics.

This paper analyzes to which extent dynamic optimization methods widen the range for addressing environmental and resource economic problems and improve the quality of environmental and resource economic policy recommendations. Moreover new fields for the application of these methods in environmental and resource economics are presented which part from the traditional concept of intertemporal optimization. These new applications incorporate beside intertemporal decision problems also the aspect of uncertainty, of space or any other qualitative aspect. The discussed dynamic optimization methods comprise dynamic programming and optimal control as a function of time, or one-dimensional space which is for instance given by a land classification system. Moreover we present two stage optimal control where the control variable is a function of time and space, or a function of time and some other heterogeneous quality aspect, but the state variable depends only on time. Finally we discuss distributed optimal control where both, the control and state variable, depend on time and space or on time and some other heterogeneous quality aspect. These quality aspects could be given for example by the distribution of the age of a population, by the distribution of the size of the tree trunks, or by the distribution of income of the economic agents.Environmental and resource economics, two-stage and distributed optimal control, land economics