CONTRACTING FOR NON-POINT-SOURCE POLLUTION ABATEMENT

Olof Bystrom and Daniel Bromley

No 12620, Staff Papers from University of Wisconsin-Madison, Department of Agricultural and Applied Economics

Abstract: This paper presents an incentive scheme to control agricultural non-point-source pollution. The analysis is based on a nested agent framework with three parties; farmers, a country's government, and the governments of all countries that affect each other's environmental quality. Unlike previous analysis of incentive schemes to control agricultural pollution, we suggest non-individual contracts between farmers and a regulating authority as a solution to the domestic pollution problem. Our incentive scheme proposes collective penalties as a way to control pollution. To solve the international problem of pollution management of a common (water) resource, we propose an international agency with authority to write and enforce contracts in each of its member countries. We show that the information requirement on a country's government can be substantially reduced if contracts can be made non-individual.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 31
Date: 1996
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: CONTRACTING FOR NONPOINT-SOURCE POLLUTION ABATEMENT (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:wisagr:12620

DOI: 10.22004/ag.econ.12620

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