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Incentive-Based Solutions to Agricultural Environmental Problems: Recent Developments in Theory and Practice

Published online by Cambridge University Press:  28 April 2015

Alan Randall  and
Michael A. Taylor
Alan Randall
Affiliation:
Department of Agricultural, Environmental, and Developmental Economics, The Ohio State University
Michael A. Taylor
Affiliation:
Department of Agricultural, Environmental, and Developmental Economics, The Ohio State University
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Abstract

Theory predicts that incentive-based regulatory instruments reduce compliance costs by encouraging efficient resource allocation and innovation in environmental technology. Cost reductions from pollution permit trading often have exceeded expectations, but the devil is in the details: the rules matter. In recent years, IB instruments of many kinds, from permit trading to various informal voluntary agreements, have been introduced in many countries. Point-nonpoint trading programs have been established in the U.S., but recorded trades have been rare. We speculate about prospects for performance-based monitoring of agricultural nonpoint pollution which, we believe, would encourage trading to the benefit of farmers and society.

Type
Invited Paper Sessions
Information
Journal of Agricultural and Applied Economics , Volume 32 , Issue 2 , August 2000 , pp. 221 - 234
Copyright
Copyright © Southern Agricultural Economics Association 2000

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