Nutrient Allowances Market and Wetland Abatement

Natacha Fauvet () and Jean-Christophe Pereau
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Natacha Fauvet: GREThA

No 2014.06, Working Papers from FAERE - French Association of Environmental and Resource Economists

Abstract: The buffering function of wetlands is one of the most efficient mechanisms for regulating agricultural runoffs and water pollution. The aim of this paper is to show how farmers could use wetland abatement as a way to achieve pollution targets set by a regulator in a nutrient allowance market. The introduction of allowances into farmers’ maximisation programs creates an incentive to either reduce fertilizer use per hectare of crops, or to restore wetlands on agricultural land. Comparative statics results express a negative correlation between the quantity of allowances per farmer and the fertilizer use. Furthermore, the quantity of allowances per farmer is negatively correlated to the wetland surface area.

Keywords: Nutrients; Wetlands; Agriculture; Permit market; Regulation; Allowances; Runoffs (search for similar items in EconPapers)
JEL-codes: Q15 Q28 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2014-05
New Economics Papers: this item is included in nep-agr and nep-env
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http://www.faere.fr/pub/WorkingPapers/Fauvet_Pereau_FAERE_WP2014.06.pdf First version, 2014 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:fae:wpaper:2014.06

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