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The concerns about the contradiction between agricultural production and Agricultural Non-Point (ANPS) pollution has become increased with economic development in China. Government interventions are key to controlling ANPS pollution through the establishment of laws and policies. This paper uses the entropy method to calculate the emissions amount of ANPS pollution and policy strength of 31 provinces from 2010 to 2019 in China. The dynamic panel data model with system generalized moment is used to estimate the impacts of policies with different measures on ANPS pollution emission. According to our findings, China’s policies have been helpful in controlling ANPS pollution though there are important regional differences. Moreover, four types of policy measures all contribute to the reduction in ANPS pollution. These findings improve our understanding of the relationship between policies and ANPS pollution in the analyzed period, thus providing support for the formulation of pollution management strategies in the next stage.

Does environmental quality affect firms’ activities that might improve that quality? In this paper, we use China's public heating policy as a quasi-experiment to investigate the impact of exogenous pollution differences on green innovation behavior. We use a regression discontinuity model, and carry out a suite of robustness tests. We consistently find that firms located in cities with an exogenous source of heavy pollution tend to adopt green innovation at a lower rate while we find no difference in the rate at which they adopt non-green innovation. We find a strong causal effect: being north of the boundary, where pollution levels are higher, leads firms to adopt less green innovation. Firms located in the heating areas report roughly 1 less green innovation per billion RMB of assets, a substantial difference given the average number of green innovations per billion RMB of assets of northern firms is 0.641.

China today has an urgent need to develop low-carbon policies that also address local air pollution. This study uses a difference-in-differences model to estimate the extent to which China's Emissions Trading Scheme (ETS), which directly addresses CO

Information-based policy instruments are some of the most commonly used tools for influencing consumers' water use in the residential sector. However, their ability to change behavior remains an area in need of further research. This study describes the evaluation of an information-based demand management program, rooted in normative comparison, designed to increase the efficiency of households' residential outdoor water use. Results indicate that the program had an impact on water use among households that received persuasive messages regarding their past consumption, compared to estimates of lawn water requirements and the water use of neighbors. Additionally, the results demonstrate that the treatment effect gets stronger over time and varies among message recipients as a function of baseline water use. Unanticipated effects of the administration of the messages show an increase in water use among the lowest consuming households. Top users reduced their water use significantly as a function of the persuasive message. The findings suggest that utilities seeking to augment users' water consumption through persuasion must be cognizant of the way that messages are framed, and who receives them, or potentially face unanticipated side effects, and that message repetition may have some additionality.

Lack of adoption of soil health–promoting practices (SHPPs) leaves soil vulnerable to erosion, exacerbating flooding and contributing to high nutrient and sediment levels in surface waters. To aid in the adoption of SHPPs, changes in soil health need to be measured and related to things that both clearly and directly matter to farmers and stakeholders, yet soil scientists still grapple with which indicators to measure when assessing soil health. Useful indicators of soil health show changes in soil function resulting from changes in soil management, are measurable, and have clear and direct value to their target audience. These “linking indicators” need to be identified in context for successful promotion of SHPPs. We collected data from two focus groups of farmers in the Brazos River Watershed, TX, who had either adopted SHPPs or who had not. Content analysis of focus group transcripts revealed soil health was an important part of a farmer's stewardship ethic. Farmers perceived that water management, organic matter, yield, and biomass were meaningful indicators of soil health that benefited their enterprise. However, using yield and biomass alone has the potential to create a “false positive” for soil health. When farmers chose their management practices, two themes interacted with farmer concerns for soil health: profitability and social interactions. This work provides context and recommended linking indicators for soil scientists to use for communication with farmers. Researchers and policymakers should be aware of these interactions if efforts to promote SHPP adoption are to be successful.

Renewable portfolio standards have been promoted and implemented as market-based incentives for encouraging renewable generation. Markets for RECs in Massachusetts and Connecticut do not consistently behave according to hypothesized fundamentals. Regardless of the reason for this divergence, one must be skeptical that the two state programs have created an efficient, fundamental-driven market.

We integrated two existing biological models and a newly developed economic demand model to evaluate the biological and economic performance of alternative policies in the Chesapeake Bay blue crab Callinectes sapidus fishery subject to the requirement that yield and revenue be sustainable. The resulting model was able to compare outcomes of alternative management scenarios considered by policy makers. In order to provide insights into the impacts of relevant policy components in a management scenario, we regressed the sustainable outcomes, sustainable yield, and sustainable revenues on a set of policy components. A short fishing season for female crabs combined with a long fishing season for males appeared to increase sustainable yield and revenue. Among size limit policies, lower minimum limits for males, females, peelers, and soft-shell crabs appeared to reduce sustainable outcomes, while a restrictive maximum size limit for mature females seemed to improve fishery performance with respect to bo...

It is difficult to control agricultural Non-point Source (NPS) pollution, caused by overusing of chemical fertilizer, through laws alone. An agricultural extension program is an alternative way to reduce fertilizer input. This paper estimates the average change in fertilizer use of farmers, which is attributable to their participation in the agricultural extension program. The Inverse-Probability Weighted matching method is used to evaluate the average treatment effect for the farmers who engaged in the program and, to a limited extent, evaluate the impact of individual elements of the program. Surprisingly, we find that farmer-to-farmer training may have had a counterproductive effect while the posters may be the most effective program element in reducing fertilizer use in the context.

This paper provides a broad evaluation of the implications of market-based conservation (MBC) strategies from economic, social and ecological perspectives. After reviewing the economic theory that underlies MBC initiatives, we develop a list of approaches that have been labeled as “market-based”, and categorize them according to the degree to which they are free-standing markets or require the intervention of the state. A multidisciplinary critique reveals the potential problems and pitfalls of MBC are due to a lack of ability to deal with dynamic systems in the real world. The dynamics of these three systems can undermine the intended goals of MBC.

Uncertainties inherent in fisheries motivate a precautionary approach to management, meaning an approach specifically intended to avoid bad outcomes. Stochastic dynamic optimization models, which have been in the fisheries literature for decades, provide a framework for decision making when uncertain outcomes have known probabilities. However, most such models incorporate population dynamics models for which the parameters are assumed known. In this paper, we apply a robust optimization approach to capture a form of uncertainty nearly universal in fisheries, uncertainty regarding the values of model parameters. Our approach, developed by Nilim and El Ghaoui (Oper Res 53(5):780-798, 2005), establishes bounds on parameter values based on the available data and the degree of precaution that the decision maker chooses. To demonstrate the applicability of the method to fisheries management problems, we use a simple example, the Skeena River sockeye salmon fishery. We show that robust optimization offers a structured and computationally tractable approach to formulating precautionary harvest policies. Moreover, as better information about the resource becomes available, less conservative management is possible without reducing the level of precaution.

We use propensity score matching to estimate additionality from enrollment in federal cost-share programs for six practices. We analyze farmer adoption decisions based on farmer survey data in Ohio. We develop a new methodological approach to decompose the average treatment effect on the treated according to relative contributions of voluntary adopters and new adopters. Our results indicate that cost-share programs achieve positive levels of additionality for each practice. But percent additionality varies dramatically between practices. Specifically, percent additionality is highest for hayfield establishment (93.3%), cover crops (90.6%), and filter strips (88.9%), while it is lowest for conservation tillage (19.3%). ( JEL Q24, Q28 )

The 1990 amendments to the Clean Air Act created a trading program in sulfur dioxide (SO2) emissions that has served as the seminal example of how an emissions trading program could be designed. Yet despite its success, the trading program was essentially brought to an end by a series of regulatory and judicial actions. We begin with a brief discussion of the theoretical and historical antecedents to the SO2 trading program. We then describe the events that led to the program’s effective end in 2011. We argue that the SO2 trading program had two key vulnerabilities: SO2 emissions cause multiple environmental impacts, some with local consequences, and internal conflicts within the Clean Air Act. Because of these vulnerabilities, in the end, the program was unsustainable. We close with a discussion of the lessons that can be drawn from this history for future emissions trading programs.

This paper analyzes the economic, political and environmental factors that contribute to the consumption and under- or over-use of pesticides. Using unbalanced panel data analysis, we study how pesticide over- or under-use varies for countries with different per capita Gross Domestic Product (GDP) and foreign direct investment (FDI) stock. We begin by controlling for climatic and agricultural variables that should lead to variation in pesticide application rates. The residual from the regression provides an indication of a nation's deviation in pesticide use relative to the mean. The more negative the residual, the more likely it is that that nation is under-using pesticides. The more positive it is, the more likely it is that pesticides are being over-used. We study the correlation of this residual with important economic and political variables. We find that at low levels of per capita GDP, there is evidence of pesticide under-use and that at the highest income levels, there may be increasing over-use. We also look at the correlation of pesticide use with foreign direct investment stock, farm size, mechanization and democracy and, in most cases find significant correlation with these variables.

Newburn, David A. and Richard T. Woodward, 2011. An Ex Post Evaluation of Ohio’s Great Miami Water Quality Trading Program. Journal of the American Water Resources Association (JAWRA) 48(1): 156-169. DOI: 10.1111/j.1752-1688.2011.00601.x Abstract: Market-based approaches to address water quality problems have resulted in only limited success, especially in trading programs involving both point and nonpoint sources. We analyze one of the largest point-nonpoint trading programs – the Great Miami Trading Program in Ohio, administered by the Miami Conservancy District (MCD). Our evaluation focuses on the economic and institutional aspects of the program, including cost effectiveness, efficiency of bidding, transaction costs, trading ratios, and innovation. We use a unique dataset consisting of all bids from agricultural nonpoint sources and interviews of soil and water conservation district (SWCD) agents in the watershed. We find that the MCD’s reliance on county-level SWCD offices to recruit and advise farmers has been essential to achieve relatively high rates of farmer participation. Additionally, the MCD is able to partly free ride on the administrative costs that SWCD offices receive to assist federal conservation programs, which is helpful to lower costs for a fledgling trading program. However, the involvement of SWCD offices reduced the potential cost savings from the reverse auction structure because some agents were able to learn about the threshold price over the six rounds of bidding and help farmers bid strategically. Overall, the program structure serves as an effective model for future trading programs in other regions that seek to involve agricultural nonpoint sources.

In this paper, the authors analyze a wide range of recreational management strategies for their impacts on red snapper yield, economic surplus and the fish stock. Simulating a wide range of policies, the authors find Data Envelopment Analysis (DEA) inspired policy efficiency frontiers that lead to finding those management strategies that offer the greatest level of economic surplus for any biological target, looking at both the east and west Gulf of Mexico fisheries. Red snapper has been declared overfished since 1988 and the 2005 SEDAR 7 stock assessment declared red snapper were overfished and undergoing overfishing. In November 2009, the update of the assessment declared that overfishing was no longer occurring but that the red snapper stocks needed to be rebuilt. In this analysis, it was found that red snapper are neither overfished or undergoing overfishing. The main difference between the present model and the SEDAR 7 model is that the latest model uses a higher mortality rate for juveniles and a density dependent model. The authors also suggest that the east and west should be managed as separate units.

There is an increasing tendency to use markets to induce the provision of environmental services. As such markets increase in scope, potential market participants might sell multiple environmental services. The question we consider here is whether participants in such markets should be allowed to sell credits in more than one market simultaneously. Some have argued in favor of such “double-dipping”, because it would make the provision of environmental services more profitable. In practice however, most programs do not allow double-dipping. We show that if the optimal level of pollution abatement is sought, then double-dipping maximizes societal net benefits. However, if pollution policies are set in a piecemeal fashion, then the caps for each market are unlikely to be optimal and, in this second-best setting, a policy prohibiting double-dipping can lead to greater social net benefits. We explore conditions under which a single-market policy is preferred, or equivalently, where piecemeal policies are likely to yield particularly inefficient outcomes.

Fisheries managers use licenses as a method of capping the size of a fishing industry, but as management goals change and the size of fishery stocks fluctuate, managers may be faced with the decision to buy back licenses. The vast majority of economic literature on license buyback programs focuses on the changes to economic efficiency of the fleet, often citing changes to the composition of fleet size. However, managers have little guidance in deciding how to structure a buyback auction, despite the fact that the auction structure plays a key role in determining which licenses are retired and in the composition of the remaining fleet. With the Texas Park and Wildlife Department's Inshore Shrimp License Buyback Program as a basis for auction design, this research uses three experimental treatments to analyze how individuals respond to various reverse auction structures. In terms of the quickest license expiration, our experiments suggest that fisheries managers should select a binding auction with...

National government-funded payments for environmental services (PES) programs often lack sustainable financing and fail to target payments to providers of important environmental services. In principle, these problems can be mitigated by supplementing government financing with contributions from leading environmental service users. We use original survey data and official statistics to analyze user financing in Costa Rica’s renowned national PES program, focusing on the amounts and sources of user financing, the drivers of contributions, and contributors’ perceptions of the PES program. We find that user financing has supported less than three percent of the acres enrolled in the program and that hydroelectric plants are the largest private sector contributors. Large hydroelectric plants tend to contribute while small ones do not. The weight of evidence suggests that in addition to ensuring the provision of forest environmental services, hydroelectric plants’ motives for contributing to the PES program include improving relations with local communities and government regulators — common drivers of participation in all manner of voluntary environmental programs. These findings raise questions about the potential of user financing to improve the efficiency and financial sustainability of national PES programs.

Using stated choice survey data we report on subjects’ perceptions of the risks of hurricanes and intended relocation decisions when faced with such risks. All of the subjects were displaced by either Hurricane Katrina or Rita, in New Orleans and other Gulf Coast areas in 2005. Results here suggest that subjective perceptions of risk are quite high as compared to scientific estimates of risk, and relocation decisions revealed from a discrete choice experiment are significantly determined by levels of hurricane strike risks.

Using a quasi‐field experiment, we report on subjects' perceptions of the risks of hurricanes. All experimental subjects were displaced by either Hurricane Katrina or Rita, in New Orleans and other Gulf Coast areas, except for a small control group consisting of people who live in central Texas. We examine their perceptions of risks just after the hurricanes occurred, and over one year later to evaluate the change in subjective risk perceptions over time. A latent risk model is estimated in which subjective probabilities of hurricane strike risk are represented as a function of respondents' demographic characteristics and experiences following the storms.

NutrientNet is an Internet-based environment in which a class can simulate a market-based approach for improving water quality. In NutrientNet, each student receives a role as either a point source or a nonpoint source polluter, and then the participants are allowed to trade water quality credits to cost-effectively reduce pollution in a watershed. The authors provide an overview of the content and structure of this Web site. They focus on the features that make NutrientNet an effective teaching tool for instructors and a rich learning environment for students.

Instream flows may be essential in protecting aquatic species that are threatened or endangered. An economic model of the optimal allocation of water under pure uncertainty is developed, with particular attention paid to the situation when a species characterized by critical depensation is affected by instream flows. We adopt the notion of pure uncertainty that Frank Knight and Daniel Ellsberg intended, which applies when decision makers cannot reduce their uncertainty to a unique probability distribution. Following recent work by Hansen, Sargent, and others, we employ robust control as a way to deal with this problem. Copyright 2008, Oxford University Press.

In this paper we consider the meaning of sustainable resource management in multi-dimensional resources. Based on the principle of intergenerational fairness, we define fisheries management as sustainable if it does not lead to a decline in the net present value of the fishery. If sustainability, or intergenerational fairness, were held as an obligation by fishery managers, then the traditional present-value maximization objective would be constrained. Using numerical solutions to a simple predator-prey model, we explore how the optimal-sustainable management of this fishery would differ from management that seeks to maximize the present value of the benefits. General lessons regarding the meaning of sustainable fishery management are discussed.

This study applies functional Benefit Transfer via Meta-Regression Modeling to derive valuation estimates for wetlands in an actual policy setting of proposed groundwater transfers in Eastern Nevada. We illustrate how Bayesian estimation techniques can be used to overcome small sample problems notoriously present in Meta-functional Benefit Transfer. The highlights of our methodology are: (i) The hierarchical modeling of heteroskedasticity; (ii) The ability to incorporate additional information via refined priors; and (ii) The derivation of measures of model performance with the corresponding option of model-averaged Benefit Transfer predictions. Our results indicate that economic losses associated with the disappearance of these wetlands can be substantial and that primary valuation studies are warranted.

Experimental and theoretical analysis has shown that the conventional expected utility (EU) and subjective expected utility (SEU) models, which are linear in probabilities, have serious limitations in certain situations. We argue here that these limitations are often highly relevant to the work that environmental and natural resource economists do. We discuss some of the experimental evidence and alternatives to the SEU. We consider the theory used, the problems studied, and the methods employed by resource economists. Finally, we highlight some recent work that has begun to use some of the alternatives to the EU and SEU frameworks and discuss areas where much future work is needed. # 2007 Elsevier B.V. All rights reserved.

In this manuscript we explore the consequences to different income groups of various policies to reduce overfishing in the Gulf marine recreational fishery. To do so we estimate a discrete choice model of marine recreational fishing demand allowing for incomplete data and a non-constant marginal utility of income. By allowing the marginal utility of income to vary across three categorical income groups, our model allows us to explore the distributional consequences of various fee schemes and other policy programs that would change catch in the fishery. We find that flat fees have a strong proportional effect on the participation of shore fishermen, where low-income anglers predominate, and a relatively small impact on the expensive charter fishing mode. We also find that the welfare consequences of declining catch rates would fall disproportionately on low-income anglers. (JEL Q51, Q22)

Using data from a 1992 survey of Maine hunters, we estimate the willingness to pay for a program that would eliminate the risk of non-participation in an otherwise lottery-rationed moose hunting system. We develop an empirical model to estimate the option price (OP) hunters have for eliminating this risk, based on survey data. We find an estimated OP to eliminate the non-participation risk associated with the lottery system of over $380. The estimated results are compared with the results of 12 years of management experience. We also provide a modest ex-post analysis and overview of an auction of a small number of licenses occurring since 1998. Based on the estimates from the model and survey data, we believe that moose management strategies in recent years would pass a benefit-cost test.

This paper focuses on estimating willingness to pay for reducing risk of getting foodborne illness using a nonhypothetical field experiment utilizing real food products (i.e., ground beef ), real cash, and actual exchange in a market setting. Respondents were given information about the nature of food irradiation. Single-bounded and one and one-half bounded models are developed using dichotomous choice experiments. Our results indicate that individuals are willing to pay for a reduction in the risk of foodborne illness once informed about the nature of food irradiation. Our respondents are willing to pay a premium of about $0.77 for a pound of irradiated ground beef, which is higher than the cost to irradiate the product. Le present article porte sur l'estimation de la volonte de payer des consommateurs pour diminuer le risque de contracter une maladie d'origine alimentaire. L'etude a ete realisee en effectuant une experience sur le terrain a l'aide de vrais produits alimentaires (a savoir du bœuf hache), d'argent reel et d'echange reel en situation de marche. Les repondants avaient recu de l'information sur l'irradiation des aliments. Nous avons mis au point des modeles a une limite et a une limite et demie utilisant la methode des choix dichotomiques. Nos resultats ont montre que les consommateurs etaient prets a payer pour diminuer le risque de contracter une maladie d'origine alimentaire, une fois informes sur l'irradiation des aliments. Nos repondants etaient prets a payer une prime d'environ 0,77$ la livre pour obtenir du bœuf hache irradie, soit une somme supplementaire superieure au cout de l'irradiation du produit.

Facilitated by remarkable increases in computational speed, simulation models are becoming more and more complex and are being increasingly used in applied economic analysis. However, computational limitations remain a major barrier to the study of dynamically optimal policies. We study the problem of carrying out dynamic optimization in conjunction with large simulation models and propose a method for working around the computational difficulties that arise in such problems. Our methods are applied to a model of the Gulf of Mexico's red snapper fishery to study the dynamically optimal total allowable catch. Copyright 2005, Oxford University Press.

This paper evaluates income variable specification and functional form issues in contingent-valuation studies using the utility-theoretic approach. Applying data from a study of willingness to pay for irradiated beef, results suggest that functional form does affect the estimates, but variable specification does not introduce statistically significant differences.

Despite many years of existence, programs that allow transferable discharge permits to control water pollution have had quite limited success. This paper discusses a single trade that recently took place in the Lake Dillon drainage basin between point and nonpoint pollution sources. This trade demonstrates many of the challenges that are faced in effluent trading but also highlights the potential efficiency gains that can be achieved through such programs. Copyright 2003, Oxford University Press.

Despite two decades of debate, there remains little consensus about what sustainability is, and how it should be achieved. Economists primarily portray sustainability as a macro-level concern, but there has been less attention on the implications of this social objective for policies related to the management of individual resources. This paper derives guidance for sector-level planning and project analysis from a macro-level norm of intergenerational fairness. Optimal sustainable management involves making tradeoffs between sectors. We derive a criteria for sector-level planning and project analysis that help make those tradeoffs without losing site of the sustainability goal.

Size and bag limits are among the most common forms of regulations for recreational fisheries. In this paper, we theoretically study and compare the short- and long-term impacts of these policies on individual anglers and fish stocks. Particular attention is paid to the issue of release mortality, which can have important consequences for policy effectiveness. Theoretically, we show the conditions under which these policies will be successful in achieving biological objectives. Implications for recreation demand analysis are discussed. We also study these policies using a simulation model of various policy combinations for the Gulf of Mexico red snapper fishery.

“Imagine a threat of substantial but uncertain harm. What should we do? If we wait until we are sure about the threat, the best opportunities for effective remedies already may be lost. If we act p...

The use of transferable discharge permits as a water pollution control policy is rapidly increasing in the United States. Drawing on evidence from existing water quality trading programs, this paper provides a taxonomy of the forms that such markets take. Four main structures are identified: exchanges, bilateral negotiations, clearinghouses, and sole-source offsets. Each of these structures has its own strengths and weaknesses; none is optimal for all scenarios. Since market structure is largely determined by a program's rules, policy makers should be aware of the differences between these structures and the conditions under which each comes to be. Copyright 2002, Oxford University Press.

The use of transferable discharge permits in water pollution, what we will call water quality trading (WQT), is rapidly growing in the U.S. This paper reviews the current status of WQT nationally and discusses the structures of the markets that have been formed. Four main structures are observed in such markets: exchanges, bilateral negotiations, clearinghouses, and sole source offsets. The goals of a WQT program are environmental quality and cost effectiveness. In designing a WQT market, policy makers are constrained by legal restrictions and the physical characteristics of the pollution problem. The choices that must be made include how trading will be authorized, monitored and enforced. How these questions are answered will help determine both the extent to which these goals are achieved, and the market structures that can arise. After discussing the characteristics of different market structures, we evaluate how this framework applies in the case of California's Grassland Drainage Area Tradable Loads Program.

This paper uses an analysis of the Gulf of Mexico's recreational red snapper fishery to demonstrate the importance of theoretical behavioral model choice. Although travel cost models are frequently used in assessing the impact of policy changes on consumer's surplus, this study shows that the standard use of consumer's surplus per trip can be inappropriate when the policy change leads to a partial closure of the resource, depending on the theoretical behavior model underlying the analysis.

The number of studies quantify the value of wetlands and the services provided by these ecosystems is rapidly expanding. The time is ripe for an assessment of what has been learned from this literature. Using results from 39 studies, we evaluate the relative value of different wetland services, the sources of bias in wetland valuation and the returns to scale exhibited in wetland values. While some general trends are beginning to emerge, the prediction of a wetland's value based on previous studies remains highly uncertain and the need for site-specific valuation efforts remains large.