Nutrient Trading, the Flush Tax, and Maryland's Nitrogen Emissions to the Chesapeake Bay

James C. Hanson and Kenneth McConnell ()

No 7343, Working Papers from University of Maryland, Department of Agricultural and Resource Economics

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 trading high-cost upgrades of sewage treatment plants for low-cost winter cover crops. Under an optimistic assumption about costs for non-point sources, we calculate that abatement could be increased by more than 50%, while in a pessimistic scenario, abatement could be increased by 2%. We also explore the role of uncertainty in determining the appropriate trading ratio between point and non-point sources of pollution, showing that the higher uncertainty associated with non-point sources should induce a lower trading ratio.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 19
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:ags:umdrwp:7343

DOI: 10.22004/ag.econ.7343

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