Simulated Trading for Maryland's Nitrogen Loadings in the Chesapeake Bay

James C. Hanson and Kenneth Mcconnell ()

Agricultural and Resource Economics Review, 2008, vol. 37, issue 2

Abstract: We investigate nutrient trading for point and non-point sources for the Bay Restoration Fund in Maryland. We demonstrate how to use the proceeds from the tax revenue to mimic a market by trading high-cost upgrades of sewage treatment plants for low-cost winter cover crops. Under an optimistic assumption about costs for non-point sources and naïve assumptions about the lag from planting cover crops to changes in nitrogen load, we calculate that 100 percent of abatement could be achieved at 56 percent of total costs, while in a pessimistic scenario, 100 percent of abatement could be could be achieved at 83 percent of total costs.

Keywords: Chesapeake Bay; cover crops; nitrogen abatement; nutrient trading; sewage treatment plants; trading ratios; water pollution; Environmental Economics and Policy (search for similar items in EconPapers)
Date: 2008
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Persistent link: http://EconPapers.repec.org/RePEc:ags:arerjl:45669

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