TITLE

Green Payment Programs for Nonpoint Source Pollution Control: How Important Is Targeting for Cost-Effectiveness?

AUTHOR(S)
Baerenklau, Kenneth A.
PUB. DATE
December 2002
SOURCE
Journal of Agricultural & Resource Economics;2002, Vol. 27 Issue 2, p406
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Mechanism design theory is used to examine the case of a cost-minimizing regulator who uses input-reduction subsidies to meet an exogenously imposed ambient standard for nonpoint source pollution. A general result claimed for a welfare-maximizing regulator is clarified to show that an optimal contract scheme may involve a pooling equilibrium. Numerical results suggest the ability to directly target contracts reduces costs significantly for the regulator. But in the absence of this ability, indirect targeting reduces costs only slightly.
ACCESSION #
23871072

 

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