ECONOMIC INCENTIVES FOR AGRICULTURAL NONPOINT SOURCE POLLUTION CONTROL1

ABSTRACT. The limited success of command-and-control policies for reducing nonpoint source (NPS) water pollution mandated under the Federal Water Pollution Control Act (FWPCA) has prompted increased interest in economic incentive policies as an alternative control mechanism. A variety of measures have been proposed ranging from fairly minor modifications of existing policies to substantial revisions including watershed-wide polices that rely on economic incentives. While greater use of economic incentive policies, such as environmental bonds and point/nonpoint source trading is being advocated in the reauthorization of the CWA, the expected effects of individual proposals will be modest. The characteristics of NPS pollution, namely uncertainty and asymmetrical information, underscores that there is no single, ideal policy instrument for controlling the many types of agricultural NPS water pollution. Some of the usual incentive-based policies, such as effluent taxes, are not well suited to the task. Individual incentive policies proposed for the reauthorized CWA, such as pollution trading or deposit/refund systems, are not broadly applicable for heterogeneous pollution situations. Economic incentive policies may be appropriate in some cases, and command-and-control policies will be preferable in others and may in fact complement incentive policies.     

Where Did the Agricultural Nonpoint Source Trades Go? Lessons from Virginia Water Quality Trading Programs

Governmental agencies, nongovernmental organizations, and agricultural organizations promote water quality trading programs as an innovative policy to engage agricultural producers in conservation activities. Cost analyses suggest regulated sources can reduce compliance costs by purchasing agricultural nonpoint source credits. Yet, such “point‐nonpoint” trades are rare. This article assesses the demand for agricultural nonpoint sources in well‐developed nutrient trading programs in Virginia for industrial and municipal wastewater treatment plants, municipal stormwater programs, and land developers. Evidence suggests nutrient trading programs in Virginia will not stimulate investments in pollutant reduction practices on working agricultural lands. The lack of demand for agricultural nonpoint source credits can be attributed to a substantial degree to the design features and incentives present in multiple overlapping regulatory programs. The legal setting that dampens regulated source demand for nonpoint source credits in Virginia is broadly representative of conditions found elsewhere in the United States.     

OPTIMIZATION PROCEDURE FOR COST EFFECTIVE BMP PLACEMENT AT A WATERSHED SCALE1

ABSTRACT: A combinatorial optimization procedure for best management practice (BMP) placement at the watershed level facilitates selection of cost effective BMP scenarios to control non point source (NFS) pollution. A genetic algorithm (GA) was selected from among several optimization heuristics. The GA combines an optimization component written in the C++ language with spatially variable NFS pollution prediction and economic analysis components written within the Arc View geographic information system. The procedure is modular in design, allowing for component modifications while maintaining the basic conceptual framework. An objective function was developed to lexicographically optimize pollution reduction followed by cost increase. Scenario cost effectiveness is then calculated for scenario comparisons. The NPS pollutant fitness score allows for evaluation of multiple pollutants, based on prioritization of each pollutant. The economic component considers farm level public and private costs, cost distribution, and land area requirements. Development of a sediment transport function, used with the Universal Soil Loss Equation, allows the optimization procedure to run within a reasonable timeframe. The procedure identifies multiple near optimal solutions, providing an indication of which fields have a more critical impact on overall cost effectiveness and flexibility in the final solution selected for implementation. The procedure was demonstrated for a 1,014‐ha watershed in the Ridge and Valley physiographic region of Virginia.     

ECONOMIC IMPLICATIONS OF PHOSPHORUS LOADING POLICIES FOR PASTURE LAND APPLICATIONS OF POULTRY LITTER1

ABSTRACT: Non-point source pollution created by agriculture is one of the major issues of intensive production. Recent studies indicate that the eutrophication from agricultural non-point source pollution, especially from phosphorus, is of growing concern. The objectives of this paper are to measure the economic opportunity costs of a proposed phosphorus management policy that targets soils with elevated phosphorus levels and examine the impacts of alternative policies such as Pigouvian taxes on the optimal use of litter. The study focuses on land applications of poultry litter in the Muddy Fork watershed of the Illinois River in Northwest Arkansas. The analysis indicates that restriction of litter applications on soils with elevated phosphorus levels will significantly reduce the net returns generated from forage production, resulting in an environmental policy with a high opportunity cost for producers. An analysis of alternative Pigouvian tax policies shows that a smaller tax per ton of litter applied can achieve the same litter control as that of a larger tax on a per acre basis.     

Nonpoint source water pollution abatement and the feasibility of voluntary programs

This article details a case study of a voluntary, decentralized institutional arrangement for nonpint source water pollution control used in the Root River watershed in southeastern Wisconsin. This watershed was chosen because of its mix of urban, agricultural, and urbanizing land uses. The project objectives were to monitor and draw conclusions about the effectiveness of a voluntary, decentralized institutional system, to specify deficiencies of the approach and suggest means to correct them, and to use the conclusions to speculate about the need for regulations regarding nonpoint source pollution control or the appropriateness of financial incentives for nonpoint source control. Institutional factors considered include diversity of land uses in the watershed, educational needs, economic conditions, personality, water quality, number of agencies involved, definition of authority, and bureaucratic requirements     

Effects of Riparian Areas,Stream Order,and Land Use Disturbance on Watershed‐Scale Habitat Potential: An Ecohydrologic Approach to Policy1

Abstract: Spatio‐temporal linkages between hydrologic and ecologic dimensions of watersheds play a critical role in conservation policies. Habitat potential is influenced by variation along longitudinal and lateral gradients and land use disturbance. An assessment of these influences provides critical information for protecting watershed ecosystems and in making spatially explicit, conservation decisions. We use an ecohydrologic approach that focuses on interface between hydrological and ecological processes. This study focuses on changes in watershed habitat potentials along lateral (riparian), and longitudinal (stream order) dimensions and disturbance (land use). The habitat potentials were evaluated for amphibians, reptiles, mammals, and birds in the Westfield River Watershed of Massachusetts using geographic information systems and multivariate analysis. We use a polynomial model to study nonlinear effects using robust regression. Various spatial policies were modeled and evaluated for influence on species diversity. All habitat potentials showed a strong influence along spatial dimensions and disturbance. The habitat potential for all vertebrate groups studied decreased as the distance from the riparian zone increased. Headwaters and lower order subwatersheds had higher levels of species diversity compared to higher order subwatersheds. It was observed that locations with the least disturbance also had higher habitat potential. The study identifies three policy criteria that could be used to identify critical areas within a watershed to conserve habitat suitable for various species through management and restoration activities. A spatially variable policy that is based on stream order, riparian distance, and land use can be used to maximize watershed ecological benefits. Wider riparian zones with variable widths, protection of headwaters and lower order subwatersheds, and minimizing disturbance in riparian and headwater areas can be used in watershed policy. These management objectives could be achieved using targeted economic incentives, best management practices, zoning laws, and educational programs using a watershed perspective.     

LAND USE FUNCTION IN WATER QUALITY MANAGEMENT1

ABSTRACT. The Nation has entered a new era of water quality management in which land use policy and regulation must assume an increasingly important role. The benefits of tertiary and advanced waste treatment may be offset by contradictory land use and pollution from land runoff. Unless land use planning and controls are included in water quality management, land-imposed constraints on water quality can be anticipated. Pollution from major types of land runoff are reviewed with respect to sources, effects, and control procedures. Emphasis is given to land use practices and controls. The crucial issue with regard to the latter is lack of land use policies at federal, state, and local levels. State legislation establishing guidelines and minimum standards for land use regulation by local government is required. The dependency of water quality on land use points to the fallacy of attempting to provide for comprehensive water pollution control outside the context of comprehensive land-water resource planning and management.     

Costs and benefits of urban erosion and sediment control: The North Carolina experience

The EPA’s new nonpoint source pollution control requirements will soon institutionalize urban erosion and sediment pollution control practices nationwide. The public and private sector costs and social benefits associated with North Carolina’s program (one of the strongest programs in the country in terms of implementation authority, staffing levels, and comprehensiveness of coverage) are examined to provide general policy guidance on questions relating to the likely burden the new best management practices will have on the development industry, the likely costs and benefits of such a program, and the feasibility of running a program on a cost recovery basis. We found that urban erosion and sediment control requirements were not particularly burdensome to the development industry (adding about 4% on average to development costs). Public-sector program costs ranged between $2.4 and $4.8 million in fiscal year 1989. Our contingent valuation survey suggests that urban households in North Carolina are willing to pay somewhere between $7.1 and $14.2 million a year to maintain current levels of sediment pollution control. Our benefit-cost analysis suggests that the overall ratio is likely to be positive, although a definitive figure is elusive. Lastly, we found that several North Carolina localities have cost recovery fee systems that are at least partially self-financing. This article is based on research by the authors for the North Carolina Department of Environment, Health and Natural Resources (DEHNR). The views are those of the research team and do not necessarily reflect the position of DEHNR.     

浦东新区骨干河道非点源污染及防治对策

根据上海浦东新区骨干河道污染源调查及研究,指出新区骨干河道的主要非点污染源,提出具体的污染防治对策。     

A VSA-Based Strategy for Placing Conservation Buffers in Agricultural Watersheds

Conservation buffers have the potential to reduce agricultural nonpoint source pollution and improve terrestrial wildlife habitat, landscape biodiversity, flood control, recreation, and aesthetics. Conservation buffers, streamside areas and riparian wetlands are being used or have been proposed to control agricultural nonpoint source pollution. This paper proposes an innovative strategy for placing conservation buffers based on the variable source area (VSA) hydrology. VSAs are small, variable but predictable portion of a watershed that regularly contributes to runoff generation. The VSA-based strategy involves the following three steps: first, identifying VSAs in landscapes based on natural characteristics such as hydrology, land use/cover, topography and soils; second, targeting areas within VSAs for conservation buffers; third, refining the size and location of conservation buffers based on other factors such as weather, environmental objectives, available funding and other best management practices. Building conservation buffers in VSAs allows agricultural runoff to more uniformly enter buffers and stay there longer, which increases the buffers capacity to remove sediments and nutrients. A field-scale example is presented to demonstrate the effectiveness and cost-effectiveness of the within-VSA conservation buffer scenario relative to a typical edge-of-field buffer scenario. The results enhance the understanding of hydrological processes and interactions between agricultural lands and conservation buffers in agricultural landscapes, and provide practical guidance for land resource managers and conservationists who use conservation buffers to improve water quality and amenity values of agricultural landscape.     

GOAL-ORIENTED AGRICULTURAL WATER QUALITY LEGISLATION1

ABSTRACT: While significant nonpoint source (NIPS) pollution control progress has been made since passage of Section 319 in the 1987 Water Quality Act, existing federal legislation does not provide for the most timely and cost-effective NIPS pollution reduction. In this paper, we use findings from the Rural Clean Water Program and other nationwide agricultural NIPS pollution control programs, building on legislative history to recommend a coordinated and efficient direction for agricultural water quality legislation. A collaborative framework should be established to accomplish the goals of the Clean Water Act (CWA), Coastal Zone Management Act (CZMA), and the Conservation Title of the Farm Bill. Valuable elements of the 1990 CZMA amendments that created a coastal NIPS program should be subsumed into the CWA. The CWA should reemphasize use of receiving water quality criteria and standards and should allow states flexibility to tailor basin-scale NPS program implementation to local needs. Implementation should involve targeting of NIPS pollution control efforts to critical land treatment areas and use of systems of best management practices to address these targeted water quality problems. The 1995 Farm Bill should reorient production incentives toward water quality to support the collaborative framework, implementing ecologically sound source reduction principles. The Farm Bill and the CWA should contain interrelated provisions for voluntary, incentive-assisted producer participation and fallback regulatory measures. Such coordinated national water quality and Farm Bill legislation that recognizes the need for flexibility in state implementation is supported as the most rational and cost-effective means of attaining water quality goals.     

Reducing Air Pollution from Urban Passenger Transport: A Framework for Policy Analysis

Air quality is declining in urban areas, in part because of the rapid motorization of societies world-wide. To combat the problem, various pollution control strategies have been used or proposed for urban passenger transport. This paper develops a simple framework to analyse the impact of these strategies. The paper examines the point of impact of different policy levers and categorizes different instruments in a way that should help policy makers choose between them. The framework explicitly recognizes behavioural incentives, especially the fact that offsetting changes in consumer behaviour can often undermine the original intent of particular policies. The paper concludes that policies aimed at improving transport efficiency often improve air quality at the same time. However, supply side policies to relieve traffic congestion can conflict with the objective of controlling air pollution. It is hence vital that policy makers are aware of the incentives created by different interventions and weigh the impact of these incentives on subsidiary objectives before adoption of particular policies.     

OPTIMAL PROFITS UNDER ENVIRONMENTAL CONSTRAINTS: IMPLICATIONS OF NUTRIENT AND SEDIMENT STANDARDS1

To reduce nonpoint source pollution from nutrient, chemical, and sediment runoff, a number of environmental policy standards have been proposed. Such standards could be used to reduce nonpoint source pollution from nutrient, chemical, and sediment runoff to impaired water bodies. State governments can use voluntary approaches to meet nonpoint source pollution reduction goals. However, the practices that lower net returns will not be voluntarily adopted by farmers. Crop rotations and tillage practices may help producers to comply with the environmental standards while minimizing losses in farm profits. This study compares runoff from crop rotation practices and conventional continuous row cropping systems in Mississippi. The results are compared for different tillage systems in order to examine robustness of results. Nutrient runoff and sediment runoff are simulated using the Erosion Productivity Impact Calculator (EPIC). Sensitivity analysis of the sediment and nitrate reductions at 15 percent, 25 percent, and 35 percent are conducted. Under these scenarios, net returns are optimized under environmental constraints, and the marginal cost of sediment reduction ranges from US$1.61 to US$9.63 per ton depending on soil conditions, while the corresponding nitrate and phosphorus reductions costs range from US$1.21 to US$7.08 per kg and from US$0.09 to US$31.91, respectively. The empirical results from this study indicate that a nitrate reduction policy is relatively less costly than a sediment reduction policy. The results also demonstrate the importance of geophysical conditions and policy costs, which vary across regions.     

WATERSHEDSS: A DECISION SUPPORT SYSTEM FOR WATERSHED-SCALE NONPOINT SOURCE WATER QUALITY PROBLEMS1

ABSTRACT: A significant portion of all pollutants entering surface waters (streams, lakes, estuaries, and wetlands) derives from non-point source (NPS) pollution and, in particular, agricultural activities. The first step in restoring a water resource is to focus on the primary water quality problem in the watershed. The most appropriate NPS control measures, which include best management practices (BMPs) and landscape features, such as wetlands and riparian areas, can then be selected and positioned to minimize or mitigate the identified pollutant(s). A computer-based decision sup. port and educational software system, WATERSHEDSS (WATER, Soil, and Hydro-Environmental Decision Support System), has been developed to aid managers in defining their water quality problems and selecting appropriate NPS control measures. The three primary objectives of WATERSHEDSS are (1) to transfer water quality and land treatment information to watershed managers in order to assist them with appropriate land management/land treatment decisions; (2) to assess NPS pollution in a watershed based on user-supplied information and decisions; and (3) to evaluate, through geographical information systems-assisted modeling, the water quality effects of alternative land treatment scenarios. WATERSHEDSS is available on the World Wide Web (Web) at http://h2osparc.wq.ncsu.edu .     

A decision support process to compare riparian revegetation options in Scheu Creek catchment in north Queensland

While riparin vegetation can play a major role in protecting land, water and natural habitat in catchments, there are high costs associated with tree planting and establishment and in diverting land from cropping. The distribution of costs and benefits of riparian revegetation creates conflicts in the objectives of various stakeholder groups. Multicriteria analysis provides an appropriate tool to evaluate alternative riparian revegetation options, and to accommodate the conflicting views of various stakeholder groups. This paper discusses an application of multicriteria analysis in an evaluation of riparian revegetation policy options for Scheu Creek, a small sub-catchment in the Johnstone River catchment in north Queensland, Australia. Clear differences are found in the rankings of revegetation options for different stakeholder groups with respect to environmental, social and economic impacts. Implementation of a revegetation option will involve considerable cost for landholders for the benefits of society. Queensland legislation does not provide a means to require farmers to implement riparian revegetation, hence the need for subsidies, tax incentives and moral suasion.     

Policy Strategies to Reduce Nutrient Leaching from Agriculture and Forestry and their Local Implementation: A Case Study of the Laholm Bay,Sweden

This paper examines the use of policy instruments to reduce nutrient loading to water systems. A case study is made in the Laholm Bay on the west coast of Sweden, where an action programme was launched in 1986. However, while point sources have now largely been dealt with, diffuse pollution is still increasing. We apply implementation theory to discuss how public and private actors use regulative, market and communicative policy strategies in an attempt to combat this pollution. Despite consensus between the actors on the policy problem per se, disputes remain on the means for implementation and how the costs should be borne.     

Economic instruments for sustainable community development

Abstract

In recent years there has been increasing interest in the use of so‐called ‘economic instruments’ in environmental policy. Economic instruments influence the behaviour of economic agents by providing financial incentives for environmentally improved behaviour, or disincentives for damaging behaviour. This paper explores the use of economic instruments in the field of sustainable community planning and development. It does so in the wider context of how environmental economic policy is made. The focus of this paper is to examine the role of policy instruments in community planning, and to review the different types of instruments that are available to policy‐makers. Numerous examples of the various instruments at the community level are described. It is widely believed that policy making should occur at the lowest or most local level possible while maintaining effectiveness. A system of government that does not give adequate legal power to local governments, and does not allow local governments considerable flexibility in the use of funds, cannot be expected to achieve all community objectives. Central governments must give local governments permission to take measures towards sustainable community planning, even though that requires giving them power to address broader issues. At the same time, when issues that should be addressed at national and international levels are not addressed, local governments may be able to take action individually. Given the general reluctance (and perhaps inability) of governments at all levels today to consider non‐economic and, particularly, non‐market policy instruments, it is pragmatic as well as timely to improve our understanding of economic instruments for sustainable community development.     

River Basin Export Reduction Optimization Support Tool; a tool to screen options for reducing nutrient loads while minimizing cost

Excess loading of nitrogen and phosphorus to river networks causes environmental harm, but reducing loads from large river basins is difficult and expensive. We developed a new tool, the River Basin Export Reduction Optimization Support Tool (RBEROST) to identify the least-cost combinations of management practices that will reduce nutrient loading to target levels in downstream and mid-network waterbodies. We demonstrate the utility of the tool in a case study in the Upper Connecticut River Basin in New England, USA. The total project cost of optimized lowest-cost plans ranged from $18.0 million to $41.0 million per year over 15 years depending on user specifications. Plans include both point source and non-point source management practices, and most costs are associated with urban stormwater practices. Adding a 2% margin of safety to loading targets improved the estimated probability of success from 37.5% to 99%. The large spatial scale of RBEROST, and the consideration of both point and non-point source contributions of nutrients, make it well suited as an initial screening tool in watershed planning.     

The limitations of environmental management systems in Australian agriculture

The efficacy of government-supported programs to encourage improved management of land and water systems associated with agricultural land in Australia has been mixed. The broad approach of Australian governments is reviewed briefly. Evidence is presented from case assessments of a program to promote adoption of environmental management systems (EMSs) to improve environmental outcomes from agricultural practices. EMSs are systems implemented to manage the environmental impacts and ameliorate environmental risk associated with business activity. Data are presented on reported EMS activity and experience of four selected groups of farmers in Victoria, south-eastern Australia, representing broad-acre cropping, beef and dairy farming. The pro-environmental behaviours of farmers were mediated through voluntary adoption of government and industry sponsored EMSs, often with financial incentives and other support. Findings from the study were that adoption of EMS practices with sufficient public benefits is unlikely to occur at sufficient scale for significant environmental impact. Farmers more readily adopted practices which were financially beneficial than those which had a positive environmental impact. Although the focus on voluntary market-based instrument (MBI) type programs is popular in western countries, enforcing regulation is an important, but usually politically unpopular, component of land use policy. The comparative advantage of EMSs differed for the industries studied, but overall there were insufficient market drivers for widespread EMS adoption in Australia. Environmental outcomes could be more effectively achieved by directly funding land management practices which have highest public net benefits. Having a clear and unambiguous management objective for a particular land management policy is more likely to achieve outcomes than having multiple objectives as occurs in a number of international programs currently.     

STATE POLLUTION CONTROL PROGRAMS - A REVIEW1

ABSTRACT: This review of state pollution control programs suggests that states have brought imaginative thought to environmental programs. While manpower and funds have been concentrated in such traditional areas of concern as air and water quality enforcement, many states have attempted to defray the industrial costs of pollution control by increasing public waste treatment facilities, providing tax incentives for pollution control equipment and authorizing pollution control revenue bond financing.