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Analyzing Environmental Policy With Pollution Abatement Versus Output Analyzing Environmental Reduction: An Application To U.S. Agriculture

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  • Schamel, Guenter
  • de Gorter, Harry

Abstract

A model is developed that derives optimal pollution levels and determines the welfare economics of pollution reduction, differentiating between abatement and output reduction. It is suitable to analyze alternative policy instruments aimed to reduce external costs of agricultural production. The model is applied to the U.S. corn sector and we simulate the effects of stylized environmental policies for pesticide use on social welfare and environmental quality. The simulation results indicate that across policy scenarios, fairly modest reductions in output may induce significant gains in social welfare and environmental quality.

Suggested Citation

  • Schamel, Guenter & de Gorter, Harry, 1996. "Analyzing Environmental Policy With Pollution Abatement Versus Output Analyzing Environmental Reduction: An Application To U.S. Agriculture," Working Papers 6853, Cornell University, Department of Applied Economics and Management.
    • Handle: RePEc:ags:cudawp:6853
    DOI: 10.22004/ag.econ.6853
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    References listed on IDEAS

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    1. Buchanan, James M & Tullock, Gordon, 1975. "Polluters' Profits and Political Response: Direct Controls Versus Taxes," American Economic Review, American Economic Association, vol. 65(1), pages 139-147, March.
    2. Lichtenberg, Erik & Zilberman, David, 1986. "The Welfare Economics of Price Supports in U.S. Agriculture," American Economic Review, American Economic Association, vol. 76(5), pages 1135-1141, December.
    3. Krutilla, Kerry, 1991. "Environmental regulation in an open economy," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 127-142, March.
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