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The Allocation of Nutrient Load Reduction across a Watershed: Assessing Delivery Coefficients as an Implementation Tool

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  • Feng, Hongli
  • Jha, Manoj
  • Gassman, Phil

Abstract

Delivery coefficients have long been used in economic analysis of policies that seek to address environmental problems like water pollution (Montgomery, 1972). However, the derivation and validity of delivery coefficients have not been examined carefully by empirical analyses. In this study, we derived estimates of delivery coefficients and then evaluated them as a bridge between complex biophysical models and economic policies. Specifically, delivery coefficients were first derived for the effects of nitrogen application reduction based on the simulation results of a watershed based model, the Soil and Water Assessment Tool (SWAT). Nutrient load reduction responsibilities were then allocated to subwatersheds based on the delivery coefficients using four different allocation principles. We found that the allocations based on delivery coefficients achieved results that differed from the water quality goals by only a few percentage points in general. Moreover, our results indicated that potential cost savings, measured in percentages, outweighed the deviation from water quality goals.

Suggested Citation

  • Feng, Hongli & Jha, Manoj & Gassman, Phil, 2009. "The Allocation of Nutrient Load Reduction across a Watershed: Assessing Delivery Coefficients as an Implementation Tool," ISU General Staff Papers 200903010800001263, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:200903010800001263
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    References listed on IDEAS

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    1. Bruce A. Babcock, 1992. "The Effects of Uncertainty on Optimal Nitrogen Applications," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 14(2), pages 271-280.
    2. Newell, Richard G & Stavins, Robert N, 2003. "Cost Heterogeneity and the Potential Savings from Market-Based Policies," Journal of Regulatory Economics, Springer, vol. 23(1), pages 43-59, January.
    3. Hung, Ming-Feng & Shaw, Daigee, 2005. "A trading-ratio system for trading water pollution discharge permits," Journal of Environmental Economics and Management, Elsevier, vol. 49(1), pages 83-102, January.
    4. Gassman, Philip W. & Reyes, Manuel R. & Green, Colleen H. & Arnold, Jeffrey G., 2007. "The Soil and Water Assessment Tool: Historical Development, Applications, and Future Research Directions," ISU General Staff Papers 200701010800001027, Iowa State University, Department of Economics.
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    1. Qianwen Yu & Zehao Sun & Junyuan Shen & Xia Xu & Xiangnan Chen, 2023. "Interactive Allocation of Water Pollutant Initial Emission Rights in a Basin under Total Amount Control: A Leader-Follower Hierarchical Decision Model," IJERPH, MDPI, vol. 20(2), pages 1-25, January.
    2. Konrad, Maria Theresia & Hansen, Line Block & Levin, Gregor & Blicher-Mathiesen, Gitte & Andersen, Hans Estrup & Martinsen, Louise & Hasler, Berit, 2022. "Targeted regulation of nitrogen loads: A national, cross-sectoral analysis," Ecological Economics, Elsevier, vol. 193(C).
    3. Valcu, Adriana & Rabotyagov, Sergey S. & Kling, Catherine L., 2013. "Flexible Practice-Based Approaches For Controlling Multiple Agricultural Nonpoint-Source Water Pollution," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150450, Agricultural and Applied Economics Association.

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