Water Quality Trading in the Presence of Existing Cost Share Programs PDF Download
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Author: Patrick Fleming
Publisher:
ISBN:
Category :
Languages : en
Pages : 37
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Book Description
Most studies of water quality trading (WQT) analyze the cost effectiveness of reducing nutrient pollution in isolation from other policies. However, the policy landscape to reduce nutrient pollution from agriculture is dominated by existing cost-share (CS) programs, which are likely to persist even after introducing WQT. We investigate empirically how these two programs are likely to interact. Using farmer survey data, we estimate the behavioral responses to a CS program aimed at increasing cover crop adoption using a two-stage simultaneous equation approach to correct for voluntary participation in the CS program. We integrate these econometric results with the Chesapeake Bay Program water quality model to evaluate the profit-maximizing decision for farmers sorting between the existing CS program and proposed WQT program. Our results indicate that farmers with comparative advantage in nitrogen abatement per acre will choose to switch into the WQT program, worsening adverse selection and increasing average payments for nitrogen abatement in the existing CS program. Actual increases in nitrogen abatement from the WQT program depend on incentivizing additional cover crop acreage without inducing slippage for those farmers not currently enrolled in the CS program.
Author: Patrick Fleming
Publisher:
ISBN:
Category :
Languages : en
Pages : 37
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Book Description
Most studies of water quality trading (WQT) analyze the cost effectiveness of reducing nutrient pollution in isolation from other policies. However, the policy landscape to reduce nutrient pollution from agriculture is dominated by existing cost-share (CS) programs, which are likely to persist even after introducing WQT. We investigate empirically how these two programs are likely to interact. Using farmer survey data, we estimate the behavioral responses to a CS program aimed at increasing cover crop adoption using a two-stage simultaneous equation approach to correct for voluntary participation in the CS program. We integrate these econometric results with the Chesapeake Bay Program water quality model to evaluate the profit-maximizing decision for farmers sorting between the existing CS program and proposed WQT program. Our results indicate that farmers with comparative advantage in nitrogen abatement per acre will choose to switch into the WQT program, worsening adverse selection and increasing average payments for nitrogen abatement in the existing CS program. Actual increases in nitrogen abatement from the WQT program depend on incentivizing additional cover crop acreage without inducing slippage for those farmers not currently enrolled in the CS program.
Author: Arthur J. Caplan
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This paper examines how water quality trading interacts with nonpoint-source abatement-cost sharing (e.g., as currently practiced by the National Resource Conservation Service through its Environmental Quality Incentives Program [EQIP]) to promote the participation of nonpoint sources in a water quality market, participation that has thus far been noticeably lacking nationwide. As such, an idealized version of water quality trading is envisioned, where water quality trading and nonpoint cost sharing are treated as complementary policy instruments rather than substitutes. Toward this end, the subgame-perfect equilibrium concept is used to model a “multilateral contracting” relationship between the regulatory authority and nonpoint sources when the regulator has incomplete information about the nonpoint sources' production costs. We characterize ex ante (or second-best) nonpoint abatement levels when the regulator chooses cost-share rates in concert with a water quality market. Numerical analysis indicates that current EQIP cost-share rates would likely be lower and more flexibly determined in the presence of water quality trading.
Author: C. Pharino
Publisher: Springer Science & Business Media
ISBN: 1402058632
Category : Technology & Engineering
Languages : en
Pages : 152
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Book Description
This book presents both general and comprehensive observations of unsuccessful and successful experiences in water pollution trading programs within the U.S. These experiences help in understanding the major environmental, economic and regulatory barriers that prevent the application of pollution trading in water media to become successful. This work combines background information with real experience.
Author: Cy Jones
Publisher: McGraw Hill Professional
ISBN:
Category : Science
Languages : en
Pages : 368
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Book Description
Publisher's Note: Products purchased from Third Party sellers are not guaranteed by the publisher for quality, authenticity, or access to any online entitlements included with the product. Water-quality trading is a market-based approach that allows a facility to meet its regulatory obligations by using the pollutant reductions created by another facility capable of doing it at a much lower cost. This resource is a practical guide for wastewater treatment plants to use in evaluating the potential for water-quality trading and provides the framework for designing and implementing the trade.
Author: James Shortle
Publisher: Springer Nature
ISBN: 3030470873
Category : Business & Economics
Languages : en
Pages : 410
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Book Description
Water pollution control has been a top environmental policy priority of the world’s most developed countries for decades, and the focus of significant regulation and public and private spending. Yet, significant water quality problems remain, and trends for some pollutants are in the wrong direction. This book addresses the economics of water pollution control and water pollution control policy in agriculture, with an aim towards providing students, environmental policy analysts, and other environmental professionals with economic concepts and tools essential to understanding the problem and crafting solutions that can be effective and efficient. The book will also examine existing policies and proposed reforms in the developed world. Although this book addresses and has a general applicability to major water pollutants from agriculture (e.g., pesticides, pharmaceuticals, sediments, nutrients), it will focus on the sediment and nutrient pollution problem. The economic and scientific foundations for pollution management are best developed for these pollutants, and they are currently the top priorities of policy makers. Accordingly, the authors provide both highly salient and informative cases for developing concepts and methods of general applicability, with high profile examples such as the Chesapeake Bay, Lake Erie, and the Gulf of Mexico Dead Zone in the US; the Baltic Sea in Northern Europe; and Lake Taupo in New Zealand.
Author: United States. Congress. House. Committee on Transportation and Infrastructure. Subcommittee on Water Resources and Environment
Publisher:
ISBN:
Category : Nutrient pollution of water
Languages : en
Pages : 110
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Book Description
Author:
Publisher:
ISBN:
Category : Water
Languages : en
Pages : 120
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Book Description
Author: National Research Council
Publisher: National Academies Press
ISBN: 0309069483
Category : Science
Languages : en
Pages : 422
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Book Description
Environmental problems in coastal ecosystems can sometimes be attributed to excess nutrients flowing from upstream watersheds into estuarine settings. This nutrient over-enrichment can result in toxic algal blooms, shellfish poisoning, coral reef destruction, and other harmful outcomes. All U.S. coasts show signs of nutrient over-enrichment, and scientists predict worsening problems in the years ahead. Clean Coastal Waters explains technical aspects of nutrient over-enrichment and proposes both immediate local action by coastal managers and a longer-term national strategy incorporating policy design, classification of affected sites, law and regulation, coordination, and communication. Highlighting the Gulf of Mexico's "Dead Zone," the Pfiesteria outbreak in a tributary of Chesapeake Bay, and other cases, the book explains how nutrients work in the environment, why nitrogen is important, how enrichment turns into over-enrichment, and why some environments are especially susceptible. Economic as well as ecological impacts are examined. In addressing abatement strategies, the committee discusses the importance of monitoring sites, developing useful models of over-enrichment, and setting water quality goals. The book also reviews voluntary programs, mandatory controls, tax incentives, and other policy options for reducing the flow of nutrients from agricultural operations and other sources.
Author: Naomi Zeitouni
Publisher: Routledge
ISBN: 135189093X
Category : Nature
Languages : en
Pages : 620
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Book Description
This volume brings together a number of prominent economic studies all of which deal with key water quality issues. The studies focus on the economic aspects of water quality including identifying the polluters' actions and incentives, designing and comparing control mechanisms, analyzing the costs and benefits of water quality programmes, and finally managing transboundary water quality. They all make recommendations for improving water quality through changing incentives, programmes and/or policies.
Author: Tianli Zhao
Publisher:
ISBN:
Category :
Languages : en
Pages : 199
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Book Description
The lack of widespread success in existing water quality trading programs may be attributed, in part, to a limited correspondence between the institutional and hydrologic circumstances in "typical" watersheds and the open-market trading system envisioned in standard economics presentations of pollution trading. This thesis explores two aspects of the disparity between the theory and practice of water quality trading programs using modeling results from a case study of the Non-Tidal Passaic River Basin phosphorus emissions trading program. First, recognizing that hydrological systems and Total Maximum Daily Load (TMDL) objectives for a particular watershed may be quite complex, the Hung and Shaw (2005) Trading Ratio System (TRS) is broadly interpreted to enable firms to trade allowances upstream and across tributaries within a specified multi-zone management area. Specifically, the possibility of upstream and cross-tributary trading is investigated by modeling a "Management Area" (MA) policy proposed for the Upper -Passaic River Basin TMDL (Obrupta, Niazi, and Kardos, 2008). Second this study raises concern that the canonical theoretical presentation of tradable pollution allowances, in which firms buy and sell pollution allowances based on marginal abatement costs relative to the market determined price, is inappropriate for cost-effectively meeting a TMDL in a typical watershed. Such open-market exchange programs have been effective in settings, such as the U.S. Acid Rain Trading program that are characterized by large numbers of potential traders with heterogeneous abatement technologies across firms, and heterogeneous present capacity to meet standards. However this type of a trading mechanism is less amenable to point-source-to-point- source trading programs characterized by a small number of potential traders in a watershed, with discrete and homogeneous abatement technologies across firms, and most, if not all, firms not having the present capacity to meet the specified standard. In such settings, managers may be reluctant to not upgrade (and buy permits) or to develop excess treatment capacity (and sell permits) because of the relative lack of buyers and sellers in a thin market. Using the Non-Tidal Passaic River Basin phosphorus emissions trading program as a case study, I simulate trading scenarios under different market mechanisms. Based on the simulations of Marginal Cost Trading, cost savings accomplished under an open market mechanism range from 0.59% to 1.04% of total costs relative to the no-trade baseline. Given positive transactions costs, it is unlikely that a vibrant trading market would result in such circumstances, consistent with the disappointing level of water quality trading observed to date. On the other hand, the simulation results of Optimal Trading results suggest that if WWTPs are able to jointly optimize their capital investment levels, the costs savings can increase dramatically (up to 13.10% of the baseline total cost). This cost-saving potential leads to the argument that a structured bilateral trade system in which profitable trading opportunities are identified and implemented with multiyear contracts between firms, would more likely approximate cost-effective outcomes than an open-market, price directed system.
