Allocating Nutrient Load Reduction across a Watershed: Implications of Different Principles

Hongli Feng, Manoj K. Jha and Philip Gassman

No 21131, 2006 Annual meeting, July 23-26, Long Beach, CA from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: A watershed based model, the Soil and Water Assessment Tool (SWAT), along with transfer coefficients is used to assess alternative principles of allocating nutrient load reduction in the Raccoon River watershed in central Iowa. Four principles are examined for their cost-effectiveness and impacts on water quality: absolute equity, equity based on ability, critical area targeting, and geographic proximity. Based on SWAT simulation results, transfer coefficients are calculated for the effects of nitrogen application reduction. We find both critical area targeting and downstream focus (an example of geographic proximity) can be more expensive than equal allocation, a manifestation of absolute equity. Unless abatement costs are quite heterogeneous across the subwatersheds, the least-cost allocation (an application of the principle of equity based on ability) have a potential of cost savings of about 10% compared to equal allocation. We also find that the gap between nitrogen loading estimated from transfer coefficients and nitrogen loading predicted by SWAT simulation is small (in general less than 5%). This suggests that transfer coefficients can be a useful tool for watershed nutrient planning. Sensitivity analyses suggest that these results are robust with respect to different degrees of nitrogen reduction and how much other conservation practices are used.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 27
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea06:21131

DOI: 10.22004/ag.econ.21131

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