Skip to main content
SpringerLink
Log in

Flexible Incentives: A Unifying Framework for Policy Analysis

  • Chapter
Book cover Flexible Incentives for the Adoption of Environmental Technologies in Agriculture

Part of the book series: Natural Resource Management and Policy ((NRMP,volume 17))

Abstract

The difficulties inherent in controlling nonpoint-source pollution (NSP) have led to an interest in the use of flexible incentive mechanisms as a means of reducing agricultural pollution. A framework for analyzing alternative flexible incentive mechanisms is presented in this chapter. The framework includes sole reliance on cost-sharing incentives and mandatory instruments (such as taxes and regulations) as special cases. It also shows how alternative mechanisms, discussed in other chapters in this volume, fit into an overall model of farmer incentives. It demonstrates, however, the potential gains from creating incentives to reduce NSP by using both subsidy and mandatory instruments as complements in a policy package. A brief discussion of recent examples of policies that are based on this approach is presented.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 129.00
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 169.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 169.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Anderson, G.D., A.E. de Bossu, and P.J. Kuch. 1990. “Control of Agricultural Pollution by Regulation, ” in John B. Braden and Stephen B. Lovejoy, eds., Agriculture and Water Quality: International Perspectives.Boulder, CO: Lynne Rienner Publishers.

    Google Scholar 

  • Arora, S. and T.N. Cason. 1995. “An Experiment in Voluntary Environmental Regulation: Participation in EPA’s 33/50 Program.” Journal of Environmental Economics and Management 28(3): 271–286.

    Article  Google Scholar 

  • Babcock, B., P.G. Lakshminarayan, J. Wu, and D. Zilberman. 1996. “Public Fund for Environmental Amenities.” American Journal of Agricultural Economics 78(4): 961–971.

    Article  Google Scholar 

  • Baumol, W.J. and W.E. Oates. 1988. The Theory of Environmental Policy.Cambridge, MA: Cambridge University Press.

    Book  Google Scholar 

  • Bosch, D., Z. Cook, and K. Fuglie. 1995. “Voluntary Versus Mandatory Agricultural Policies to Protect Water Quality: Adoption of Nitrogen Testing in Nebraska.” Review of Agricultural Economics 17(1): 13–24.

    Article  Google Scholar 

  • Braden, J.B. and K. Segerson. 1993. “Information Problems in the Design of Nonpoint-source Pollution, ” in Clifford Russell and Jason Shogren, eds., Theory, Modeling, and Experience in the Management of Nonpoint-source Pollution, pp. 1–35. Boston, MA: Kluwer Academic Publishers.

    Chapter  Google Scholar 

  • Cabe, R. and J.A. Herriges. 1992. “The Regulation of Nonpoint-source Pollution Under Imperfect and Asymmetric Information.” Journal of Environmental Economics and Management 22(2): 134–146.

    Article  Google Scholar 

  • CEC (Commission of the European Communities). 1996. On Environmental Agreements. Communication from the Commission to the Council and the European Parliament, Brussels, Belgium.

    Google Scholar 

  • Cooper, J.C. and R.W. Keim. 1996. “Incentive Payments to Encourage Farmer Adoption of Water Quality Protection Practices.” American Journal of Agricultural Economics 78(1): 54–64.

    Article  Google Scholar 

  • Cooter, R.D. 1984. “Prices and Sanctions.” Columbia Law Review 84: 1523–1560.

    Article  Google Scholar 

  • Davies, T. and J. Mazurek. 1996. “Industry Incentives for Environmental Improvement: Evaluation of U.S. Federal Initiatives.” Global Environmental Management Initiative.Washington, DC: Resources for the Future.

    Google Scholar 

  • Dubgaard, A. 1990. “Programs to Abate Nitrate and Pesticide Pollution in Danish Agriculture,” in J.B. Braden and S.B. Lovejoy, eds., Water Quality and Agriculture: An International Perspective on Policies.Boulder, CO: Lynne Rienner Publishers.

    Google Scholar 

  • EPA (U.S. Environmental Protection Agency). 1992. Managing Nonpoint-source Pollution. Office of Water (WH-553), U.S. Environmental Protection Agency, EPA-506/9-90, Washington, DC.

    Google Scholar 

  • —. 1995. National Water Quality Inventory: 1994 Report to Congress. U.S. Environmental Protection Agency, Report No. 841-R-95-005, Washington, DC.

    Google Scholar 

  • Goodin, R.E. 1986. “The Principle of Voluntary Agreement.” Public Administration 64: 435–444.

    Article  Google Scholar 

  • Govindasamy, R., J.A. Herriges, and J.F. Shogren. 1994. “Nonpoint Tournaments,” in C. Dosi and T. Tomasi, eds., Nonpoint Source Pollution Regulation: Issues and Analysis.Boston, MA: Kluwer Academic Publishers.

    Google Scholar 

  • Griffin, R. and D.W. Bromley. 1982. “Agricultural Run Off as a Nonpoint Externality.” American Journal of Agricultural Economics 64(3): 547–552.

    Article  Google Scholar 

  • Hansen, L.G. 1998. “A Damage Based Tax Mechanism for Regulation of Nonpoint Emissions.” Environmental and Resource Economics 12(1): 99–112.

    Article  Google Scholar 

  • Hardie, I.W. and P.J. Parks. 1996. “Reforestation Cost-sharing Programs.” Land Economics 72(2): 248–260.

    Article  Google Scholar 

  • Helfand, G.E. and B.W. House. 1995. “Regulating Nonpoint-source Pollution Under Heterogeneous Conditions.” American Journal of Agricultural Economics 77(4): 1024–1032.

    Article  Google Scholar 

  • Herriges, J.A., R. Govindasamy, and J.F. Shogren. 1994. “Budget-balancing Incentive Mechanisms.” Journal of Environmental Economics and Management 27(3): 275–285.

    Article  Google Scholar 

  • Just, R.E. and N. Bockstael, eds. 1991. Commodity and Resource Policies in Agricultural Systems.Berlin, Germany: Springer-Verlag.

    Google Scholar 

  • Kumm, K. 1990. “Incentive Policies in Sweden to Reduce Agricultural Water Pollution,” in J.B. Braden and S.B. Lovejoy, eds., Water Quality and Agriculture: International Perspectives.Boulder, CO: Lynne Rienner Publishers.

    Google Scholar 

  • Laffont, J. 1994.“Regulation of Pollution with Asymmetric Information,” in C. Dosi and T. Tomasi, eds., Nonpoint Source Pollution Regulation: Issues and Analysis.Boston, MA: Kluwer Academic Publishers.

    Google Scholar 

  • Lohr, L. and T. Park. 1995. “Utility-consistent Discrete-continuous Choices in Soil Conservation.” Land Economics 71(4): 474–490.

    Article  Google Scholar 

  • Norton, N.A., T.T. Phipps, and J.J. Fletcher. 1994. “Role of Voluntary Programs in Agricultural Nonpoint Pollution Policy.” Contemporary Economic Policy 12(1): 113–121.

    Article  Google Scholar 

  • Reichelderfer, K.H. 1990. “National Agro-environmental Incentive Programs: The U.S. Experience,” in J.B. Braden and S.B. Lovejoy, eds., Water Quality and Agriculture: International Perspectives.Boulder, CO: Lynne Rienner Publishers.

    Google Scholar 

  • Ribaudo, M.O. 1998. “Lessons Learned about the Performance of USDA Agricultural Nonpoint Source Pollution Programs.” Journal of Soil and Water Conservation 53(1): 4–10.

    Google Scholar 

  • Segerson, K. 1988. “Uncertainty and Incentives for Nonpoint Pollution Control.” Journal of Environmental Economics and Management 15(1): 87–98.

    Article  Google Scholar 

  • —. 1990a. “Incentive Policies for Control of Agricultural Water Pollution,” in J.B. Braden and S.B. Lovejoy, eds., Agriculture and Water Quality: International Perspectives.Boulder, CO: Lynne Rienner Publishers.

    Google Scholar 

  • —. 1990b. “Liability for Groundwater Contamination from Pesticides.” Journal of Environmental Economics and Management 19(3): 227–243.

    Article  Google Scholar 

  • —. 1995. “Liability and Penalty Structures in Policy Design,” in D. W. Bromley, ed., The Handbook of Environmental Economics.Cambridge, MA: Basil Blackwell.

    Google Scholar 

  • —. 1998. “Voluntary vs. Mandatory Approaches to Nonpoint-pollution Control: Complements or Substitutes?” Working Paper, Department of Economics, University of Connecticut, Storrs, CT (November).

    Google Scholar 

  • Segerson, K. and T.J. Miceli. 1998. “Voluntary Environmental Agreements: Good or Bad News for Environmental Protection.” Journal of Environmental Economics and Management 36(2): 109–130.

    Article  Google Scholar 

  • Shortle, J.S. and D.G. Abler. 1994. “Incentives for Nonpoint Pollution Control,” in C. Dosi and T. Tomasi, eds., Nonpoint-source Pollution Regulation: Issues and Analysis.Boston, MA: Kluwer Academic Publishers.

    Google Scholar 

  • Shortle, J. and J. Dunn. 1986. “The Relative Efficiency of Agricultural Source Water Pollution Control Policies.” American Journal of Agricultural Economics 68(3): 668–677.

    Article  Google Scholar 

  • Smith R.B.W. and T.D. Tomasi. 1995. “Transaction Costs and Agricultural Nonpoint-source Water Pollution Control Policies.” Journal of Agricultural and Resource Economics 20(2): 277–290.

    Google Scholar 

  • Stranlund, J.K. 1995. “Public Mechanisms to Support Compliance to an Environmental Norm.” Journal of Environmental Economics and Management 28(2): 205–222.

    Article  Google Scholar 

  • Tomasi, T., K. Segerson, and J. Braden. 1994. “Issues in the Design of Incentive Schemes for Nonpoint Source Pollution Control,” in C. Dosi and T. Tomasi, eds., Nonpoint Source Pollution Regulation: Issues and Analysis.Boston, MA: Kluwer Academic Publishers.

    Google Scholar 

  • Weitzman, M.L. 1974. “Prices vs. Quantities.” Review of Economic Studies 41(4): 477–491.

    Article  Google Scholar 

  • Wiebe, K., A. Tegene, and B. Kuhn. 1996. Partial Interests in Land: Policy Tools for Resource Use and Conservation. Agricultural Economic Report No. 744, U.S. Department of Agriculture, Washington, DC.

    Google Scholar 

  • Wu, J. and B.A. Babcock. 1995. “Optimal Design of a Voluntary Green Payment Program under Asymmetric Information.” Journal of Agricultural and Resource Economics 20(2): 316–327.

    Google Scholar 

  • —. 1996a. “Purchase of Environmental Goods From Agriculture.” American Journal of Agricultural Economics 78(4): 935–945.

    Article  Google Scholar 

  • —. Forthcoming. “The Relative Efficiency of Voluntary vs. Mandatory Environmental Regulations.” Journal of Environmental Economics and Management.

    Google Scholar 

  • —. 1996b. “Spatial Heterogeneity and the Choice of Instruments to Control Nonpoint Pollution. ” Center for Agricultural and Rural Development, Working Paper No. 96-WP 164, Iowa State University, Ames, IA (September).

    Google Scholar 

  • Wu, J., M.L. Teague, H.P. Mapp, and D.J. Bernardo. 1995. “An Empirical Analysis of the Relative Efficiency of Policy Instruments to Reduce Nitrate Water Pollution in the U.S. Southern High Plains.” Canadian Journal of Agricultural Economics 43(3): 403–420.

    Article  Google Scholar 

  • Xepapadeas, A.P. 1991. “Environmental Policy under Imperfect Information: Incentives and Moral Hazard.” Journal of Environmental Economics and Management 20(2): 113–126.

    Article  Google Scholar 

  • Xepapadeas, A.P. 1992. “Environmental Policy Design and Dynamic Nonpoint-source Pollution.” Journal of Environmental Economics and Management 23(1): 22–39.

    Article  Google Scholar 

  • Xepapadeas, A.P. 1995. “Observability and Choice of Instrument Mix in the Control of Externalities.” Journal of Public Economics 56(3): 485–498.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. University of Connecticut, Storrs, CT, USA

    Kathleen Segerson

Authors
  1. Kathleen Segerson
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Frank Casey Andrew Schmitz Scott Swinton David Zilberman

Rights and permissions

Reprints and permissions

Copyright information

© 1999 Springer Science+Business Media New York

About this chapter

Cite this chapter

Segerson, K. (1999). Flexible Incentives: A Unifying Framework for Policy Analysis. In: Casey, F., Schmitz, A., Swinton, S., Zilberman, D. (eds) Flexible Incentives for the Adoption of Environmental Technologies in Agriculture. Natural Resource Management and Policy, vol 17. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-4395-0_6

Download citation

  • DOI: https://doi.org/10.1007/978-94-011-4395-0_6

  • Publisher Name: Springer, Dordrecht

  • Print ISBN: 978-94-010-5888-9

  • Online ISBN: 978-94-011-4395-0

  • eBook Packages: Springer Book Archive

Publish with us

Policies and ethics

Search

Navigation