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Incentive-Based Solutions To Agricultural Environmental Problems: Recent Developments In Theory And Practice

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  • Randall, Alan
  • Taylor, Michael A.

Abstract

Theory predicts that incentive-based regulatory instruments reduce compliance costs by encouraging efficient resource allocation and innovation in environmental technology. Cost reductions from pollution permit trading often have exceeded expectations, but the devil is in the detail: the rules matter. In recent years, IB instruments of many kinds, from permit trading to various informal voluntary agreements, have been introduced in many countries. Point-nonpoint trading programs have been established in the U.S., but recorded trades have been rare. We speculate about prospects for performance-based monitoring of agricultural nonpojnt pollution which, we believe, would encourage trading to the benefit of farmers and society.

Suggested Citation

  • Randall, Alan & Taylor, Michael A., 2000. "Incentive-Based Solutions To Agricultural Environmental Problems: Recent Developments In Theory And Practice," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(2), pages 1-14, August.
    • Handle: RePEc:ags:joaaec:15503
    DOI: 10.22004/ag.econ.15503
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    References listed on IDEAS

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    Cited by:

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    2. Thomas Spencer & Tihomir Ancev & Jeff Connor, 2009. "Improving Cost Effectiveness of Irrigation Zoning for Salinity Mitigation by Introducing Offsets," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 23(10), pages 2085-2100, August.
    3. Spencer, Thomas & Ancev, Tihomir, 2006. "Offsetting with Salinity Credits: An Alternative to Irrigation Zoning," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25517, International Association of Agricultural Economists.
    4. Murtough, Greg & Aretino, Barbara & Matysek, Anna, 2002. "Creating Markets for Ecosystem Services," Staff Research Papers 31912, Productivity Commission.
    5. Woodward, Richard T., 2001. "The Environmentally Optimal Trading Ratio," 2001 Annual meeting, August 5-8, Chicago, IL 20491, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Huber, Matthew C. & Willis, David B. & Hayes, John C. & Privette, Charles V., III, 2010. "Price Endogeneity and Marginal Cost Effects on Incentive Compatible Stormwater Management Policies," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61859, Agricultural and Applied Economics Association.
    7. Melstrom, Richard T. & Malone, Trey, 2023. "Voter evaluations regarding the tradeoffs between agricultural production and water quality in Lake Erie," Agricultural Water Management, Elsevier, vol. 287(C).
    8. Greenhalgh, Suzie, 2008. "Bundled Ecosystem Markets – Are They The Future?," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6166, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Catharina Druckenbrod & Volker Beckmann, 2018. "Production-Integrated Compensation in Environmental Offsets—A Review of a German Offset Practice," Sustainability, MDPI, vol. 10(11), pages 1-22, November.
    10. Stephenson, Kurt & Bosch, Darrell J., 2003. "Nonpoint Source And Carbon Sequestration Credit Trading: What Can The Two Learn From Each Other?," 2003 Annual meeting, July 27-30, Montreal, Canada 22229, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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