Efficient Management of Coastal Marine Nutrient Loads with Multiple Sources of Abatement Instruments

Kimberly Burnett (), James Roumasset and Christopher Wada

No 2011-3, Working Papers from University of Hawaii Economic Research Organization, University of Hawaii at Manoa

Abstract: Pollution management based on marginal abatement costs is optimal only if those abatement costs are specified correctly. Using the example of nitrogen pollution in groundwater, we show that the marginal abatement cost function for any given pollution source can be directly derived from a social-welfare maximization problem, wherein controls include both abatement instruments and inputs to pollution-generating production of a good or service. The solution to the optimization model reveals that abatement instruments for each source should be used in order of least marginal abatement cost, and the sources should in turn abate in order of least cost. The least-cost result remains optimal, even when the abatement target is exogenously determined.

Keywords: Abatement costs; groundwater pollution; nutrient loading (search for similar items in EconPapers)
JEL-codes: Q10 Q25 Q53 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2011-07
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Persistent link: https://EconPapers.repec.org/RePEc:hae:wpaper:2011-3

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