Economics of Water Quality Protection From Nonpoint Sources: Theory and

Water quality is a major environmental issue. Pollution from nonpoint sources is the single largest remaining source of water quality impairments in the United States. Agriculture is a major source of several nonpoint-source pollutants, including nutrients, sediment, pesticides, and salts. Agricultural nonpoint pollution reduction policies can be designed to induce producers to change their production practices in ways that improve the environmental and related economic consequences of production. The information necessary to design economically efficient pollution control policies is almost always lacking. Instead, policies can be designed to achieve specific environmental or other similarly-related goals at least cost, given transaction costs and any other political, legal, or informational constraints that may exist. This report outlines the economic characteristics of five instruments that can be used to reduce agricultural nonpoint source pollution (economic incentives, standards, education, liability, and research) and discusses empirical research related to the use of these instruments.

[1]  M. Duffy,et al.  Tradeoffs Between Water Quality and Profitability in Iowa Agriculture , 1993 .

[2]  J. Herriges,et al.  The Regulation of Non-Point Sources of Pollution Under Imperfect and Asymmetric Information , 1992 .

[3]  David H Moreau.  Water Pollution Control in the United States: Policies, Planning and Criteria , 1994 .

[4]  C. Russell,et al.  Comparative analysis of alternative policy instruments , 1985 .

[5]  Kathleen Segerson,et al.  Uncertainty And Incentives For Nonpoint Pollution Control , 1988 .

[6]  J. Shortle.  ALLOCATIVE IMPLICATIONS OF COMPARISONS BETWEEN THE MARGINAL COSTS OF POINT AND NONPOINT SOURCE POLLUTION ABATEMENT , 1987 .

[7]  David A. Andow,et al.  Environmental and social costs of pesticides: A preliminary assessment , 1980 .

[8]  An Economic Analysis of the Pre-sidedress Nitrogen Test for Pennsylvania Corn Production , 1995 .

[9]  J. Miranowski,et al.  Investments in Soil Conservation and Land Improvements: Factors Explaining Farmers Decisions , 1989 .

[10]  W. Oates,et al.  Economic competition among jurisdictions: efficiency enhancing or distortion inducing? , 1988 .

[11]  D. Esty.  Revitalizing Environmental Federalism , 1996 .

[12]  A. Malik,et al.  Economic incentives for agricultural nonpoint source pollution control , 1994 .

[13]  Thomas J. Miceli,et al.  Joint liability in torts: Marginal and infra-marginal efficiency , 1991 .

[14]  D. Levy,et al.  Surveillance for waterborne-disease outbreaks--United States, 1997-1998. , 2000, MMWR. CDC surveillance summaries : Morbidity and mortality weekly report. CDC surveillance summaries.

[15]  L. T. Evans.  Nitrogen in crop production: Edited by R.D. Hauck. American Society of Agronomy, Madison, Wisconsin, 1984, 804 pp. US$48.00 ISBN 0-89118-081-8 , 1986 .

[16]  Shunxiang Wu,et al.  Erosion, sediment, and economic effects of conservation compliance in an agricultural watershed , 1991 .

[17]  Darrell J. Bosch,et al.  Economic and Environmental Implications of Soil Nitrogen Testing: A Switching-Regression Analysis , 1995 .

[18]  John M. Reilly,et al.  Agricultural Research and Development: Public and Private Investments Under Alternative Markets and Institutions , 1996 .

[19]  Brian W. Gould,et al.  Conservation Tillage: The Role of Farm and Operator Characteristics and the Perception of Soil Erosion , 1989 .

[20]  M. Ribaudo,et al.  Atrazine: Environmental Characteristics and Economics of Management , 1994 .

[21]  Peter Feather,et al.  The Benefits Of Protecting Rural Water Quality: An Empirical Analysis , 1995 .

[22]  Stephen L. Johnson,et al.  HYPOXIA IN THE NORTHERN GULF OF MEXICO , 2000 .

[23]  W. Battaglin,et al.  Herbicides and their metabolites in rainfall: Origin, transport, and deposition patterns across the midwestern and northeastern United States, 1990-1991 , 1997 .

[24]  D. Helsel,et al.  Nutrients in ground water and surface water of the United States: an analysis of data through 1992 , 1995 .

[25]  Jorge Fernandez-Cornejo,et al.  Issues in the Economics of Pesticide Use in Agriculture: A Review of the Empirical Evidence , 1998 .

[26]  D. Hoag,et al.  Theory and Practice of Pollution Credit Trading in Water Quality Management , 1997 .

[27]  Martin Walker,et al.  Achieving environmental standards with stochastic discharges , 1983 .

[28]  Beneath the bottom line: agricultural approaches to reduce agrichemical contamination of groundwater , 1989 .

[29]  Soil Conservation or Commodity Programs: Trade Offs During the Transition to Dryland Crop Production , 1991, Journal of Agricultural and Applied Economics.

[30]  R. Carson,et al.  The Value of clean water: The public's willingness to pay for boatable, fishable, and swimmable quality water , 1993 .

[31]  Y. Hayami,et al.  Agricultural Development: An International Perspective. , 1972 .

[32]  Carol M. Browner,et al.  National Water Quality Inventory: 1994 Report to Congress , 1995 .

[33]  E. Clark,et al.  Eroding Soils: The Off-Farm Impacts , 1985 .

[34]  B. Hicks,et al.  Atmospheric nutrient input to coastal areas : reducing the uncertainties , 1996 .

[35]  K. Fuglie,et al.  Voluntary versus Mandatory Agricultural Policies to Protect Water Quality: Adoption of Nitrogen Testing in Nebraska , 1995 .

[36]  S. Kraft,et al.  WQIP : An assessment of its chances for acceptance by farmers , 1996 .

[37]  E. Thurman,et al.  Herbicides and nitrate in near-surface aquifers in the midcontinental United States, 1991 , 1994 .

[38]  D. Hellerstein,et al.  Estimating Water Quality Benefits: Theoretical and Methodological Issues , 1992 .

[39]  J. W. Dunn,et al.  The Relative Efficiency of Agricultural Source Water Pollution Control Policies , 1986 .

[40]  D. Ervin.  A New Era of Water Quality Management in Agriculture: From Best Management Practices to Watershed-based Whole Farm Approaches , 1995 .

[41]  Environmental policy design and dynamic nonpoint-source pollution , 1992 .

[42]  Gary D. Schnitkey,et al.  Impacts of Nitrogen Control Policies on Crop and Livestock Farms at Two Ohio Farm Sites , 1996 .

[43]  K. Easter.  Differences In The Transaction Costs Of Strategies To Control Agricultural Chemical Offsite And Undersite Damages , 1993 .

[44]  David Zilberman,et al.  Targeting Tools for the Purchase of Environmental Amenities , 1997 .

[45]  M. Ollinger,et al.  Innovation and Regulation in the Pesticide Industry , 1998, Agricultural and Resource Economics Review.

[46]  Gary D. Lynne,et al.  Attitudes and Farmer Conservation Behavior , 1988 .

[47]  M. Weitzman.  Prices vs. Quantities , 1974 .

[48]  J. Shortle,et al.  THE POLITICAL ECONOMY OF WATER QUALITY PROTECTION FROM AGRICULTURAL CHEMICALS , 1991 .

[49]  David L. Sunding,et al.  Measuring the Marginal Cost of Nonuniform Environmental Regulations , 1996 .

[50]  Warren M. Lee.  National Resources Conservation Service , 1997 .

[51]  T. L. Napier,et al.  Use of conventional and conservation practices among farmers in the Scioto River Basin of Ohio , 1993 .

[52]  David Zilberman,et al.  Agricultural and environmental resource economics. , 1993 .

[53]  E. Lichtenberg,et al.  Subsidizing Agricultural Nonpoint-Source Pollution Control: Targeting Cost Sharing and Technical Assistance , 1993 .

[54]  David E. Ervin,et al.  Factors Affecting the Use of Soil Conservation Practices: Hypotheses, Evidence, and Policy Implications , 1982 .

[55]  James M. Malcomson,et al.  Prices vs. Quantities: A Critical Note on the Use of Approximations , 1978 .

[56]  David Letson,et al.  Livestock and Poultry Waste-Control Costs , 1995 .

[57]  E. Douglas Beach,et al.  A Hedonic Analysis of Herbicides: Do User Safety and Water Quality Matter? , 1993 .

[58]  Lars Gårn Hansen,et al.  A Damage Based Tax Mechanism for Regulation of Non-Point Emissions , 1998 .

[59]  D. Hoag,et al.  Farm Production Decisions Under Cross and Conservation Compliance , 1991 .

[60]  J. Braden,et al.  STANDARDS VERSUS PRICES REVISITED: THE CASE OF AGRICULTURAL NON‐POINT SOURCE POLLUTION , 1988 .

[61]  Binsheng Li.  The measurement of environmental and resource values: Theory and methods: A Myrick Freeman III Resources for the Future, Washington, DC, 1994, 515 pp , 1994 .

[62]  J. Richter,et al.  Managing Nitrogen for groundwater quality and farm profitability , 1992 .

[63]  THE USE OF ESTIMATED POLLUTION FLOWS IN AGRICULTURAL POLLUTION CONTROL POLICY: IMPLICATIONS FOR ABATEMENT AND POLICY INSTRUMENTS , 1984 .

[64]  Cesare Dosi,et al.  Nonpoint source pollution regulation : issues and analysis , 1994 .

[65]  K. Reichelderfer,et al.  Environmental protection and agricultural support: are trade-offs necessary? , 1990 .

[66]  A. Xepapadeas.  Controlling Environmental Externalities: Observability and Optimal Policy Rules , 1994 .

[67]  David Pimentel,et al.  CRC handbook of pest management in agriculture , 1990 .

[68]  J. Shortle,et al.  Technology as an Agricultural Pollution Control Policy , 1995 .

[69]  Confined Animal Production and the Manure Problem , 1996 .

[70]  J. Chavas.  Applied Welfare Economics and Public Policy , 1981 .

[71]  L. Puckett.  Nonpoint and Point Sources of Nitrogen in Major Watersheds of the United States , 1994 .

[72]  S. Batie,et al.  Virginia Farmers' Soil Conservation Decisions: An Application of Tobit Analysis , 1987, Journal of Agricultural and Applied Economics.

[73]  Dennis P. Lettenmaier,et al.  Trends in stream quality in the continental United States, 1978–1987 , 1991 .

[74]  D. Anderson,et al.  Harmful algal blooms in coastal waters: options for prevention, control and mitigation , 1997 .

[75]  J. Shogren,et al.  Theory, Modeling and Experience in the Management of Nonpoint-Source Pollution , 1993 .

[76]  Michael E. Kraft,et al.  Environmental Policy in the 1990s: Toward a New Agenda , 1990 .

[77]  D. Goolsby,et al.  Selected papers on agricultural chemicals in water resources of the Midcontinental United States , 1993 .

[78]  Thomas F. Speth,et al.  Treatment of seasonal pesticides in surface waters , 1989 .

[79]  Denise D. Fort.  Federalism and the Prevention of Groundwater Contamination , 1991 .

[80]  J. Antle,et al.  Agricultural Productivity : Measurement and Explanation , 1989 .

[81]  Erik Lichtenberg,et al.  ALTERNATIVE APPROACHES TO PESTICIDE REGULATION , 1992 .

[82]  A. Xepapadeas.  Environmental policy under imperfect information: Incentives and moral hazard , 1991 .

[83]  The allocative efficiency implications of water pollution abatement cost comparisons , 1990 .

[84]  R. Horan,et al.  Research Issues in Nonpoint Pollution Control , 1998 .

[85]  J. P. Davis,et al.  A massive outbreak in Milwaukee of cryptosporidium infection transmitted through the public water supply. , 1994, The New England journal of medicine.

[86]  D. Bromley.  Handbook of environmental economics , 1995 .

[87]  D D Juranek,et al.  Cryptosporidiosis: sources of infection and guidelines for prevention. , 1995, Clinical infectious diseases : an official publication of the Infectious Diseases Society of America.

[88]  Debra S. Knopman,et al.  20 years of the Clean Wather Act has U.S. Water Quality Improved , 1993 .

[89]  C. Russell,et al.  The national recreational fishing benefits of water pollution control , 1982 .

[90]  Freeman A. Myrick.  Air and water pollution control: a benefit-cost assessment. , 1982 .

[91]  M. Wetzstein,et al.  Regulating agricultural contamination of groundwater through strict liability and negligence legislation , 1992 .

[92]  Darrell J. Bosch,et al.  An Economic Comparison of Subsurface Microirrigation with Center Pivot Sprinkler Irrigation , 1992 .

[93]  William J. Baumol,et al.  Economics, Environmental Policy, and the Quality of Life , 1979 .

[94]  Richard A. Smith,et al.  Water-Quality Trends in the Nation's Rivers , 1987, Science.

[95]  J. Cooper,et al.  Incentive Payments to Encourage Farmer Adoption of Water Quality Protection Practices , 1996 .

[96]  Gloria E. Helfand,et al.  Regulating Nonpoint Source Pollution Under Heterogeneous Conditions , 1995 .

[97]  D. Hellerstein,et al.  Calibrating Benefit Function Transfer to Assess the Conservation Reserve Program , 1997 .

[98]  National Water Quality Assessment Program (NAWQA) , 1992 .

[99]  K. Segerson.  Liability for groundwater contamination from pesticides , 1990 .

[100]  A. E. Souza,et al.  Agricultural pesticide use in coastal areas: A national summary. Final report , 1992 .

[101]  G. Helfand,et al.  Second‐Best Tax Policies to Reduce Nonpoint Source Pollution , 1996 .

[102]  C. Russeli.  A note on the efficiency ranking of two second-best policy instruments for pollution control , 1986 .

[103]  D. Zilberman,et al.  Technological innovation, agricultural productivity, and environmental quality. , 1993 .

[104]  G. Craun,et al.  Surveillance for waterborne-disease outbreaks--United States, 1993-1994. , 1996, MMWR. CDC surveillance summaries : Morbidity and mortality weekly report. CDC surveillance summaries.

[105]  Robert N. Stavins,et al.  Correlated Uncertainty and Policy Instrument Choice , 1996 .

[106]  T. L. Napier,et al.  Factors affecting attitudes toward groundwater pollution among Ohio farmers , 1993 .

[107]  W. H. Wischmeier,et al.  Predicting rainfall erosion losses : a guide to conservation planning , 1978 .

[108]  FEDERALISM AND ENVIRONMENTAL PROTECTION: CASE STUDIES FOR DRINKING WATER AND GROUND-LEVEL OZONE , 1997 .

[109]  Pete Nowak,et al.  Why farmers adopt production technology Overcoming impediments to adoption of crop residue management techniques will be crucial to implementation of conservation compliance plans , 1992 .

[110]  B. C. Pass,et al.  Council for Agricultural Science and Technology (CAST) , 1979 .

[111]  M. Leblanc,et al.  Accounting for the Environment in Agriculture , 1995 .

[112]  Brian Beavis,et al.  Firm behaviour under regulatory control of stochastic environmental wastes by probabilistic constraints , 1987 .

[113]  M. Ribaudo,et al.  The Effect of Feedgrain Program Participation on Chemical Use , 1995, Agricultural and Resource Economics Review.

[114]  Stanley F. Miller,et al.  Farm level response to agricultural effluent control strategies : the case of the Willamette Valley , 1992 .

[115]  G. Moschini,et al.  Intellectual Property Rights and the Welfare Effects of Agricultural R…D , 1997 .

[116]  P. A. Kemme,et al.  Improvement of phosphorus availability by microbial phytase in broilers and pigs , 1990, British Journal of Nutrition.

[117]  Ramu Govindasamy,et al.  Budget Balancing Incentive Mechanisms , 1994 .

[118]  Mark E. Eiswerth.  Regulatory/Economic Instruments for Agricultural Pollution: Accounting for Input Substitution , 1993 .

[119]  Kathleen Segerson,et al.  Information Problems in the Design of Nonpoint-Source Pollution Policy , 1993 .

[120]  P. Portney.  The theory of environmental policy , 1976 .

[121]  J. Braden,et al.  Issues in the Design of Incentive Schemes for Nonpoint Source Pollution Control , 1994 .

[122]  A. Weersink,et al.  COMPARATIVE ECONOMICS OF ALTERNATIVE AGRICULTURAL PRODUCTION SYSTEMS: A REVIEW , 1991 .