Economic and Environmental Impacts of Limiting Nitrogen Use to Protect Water Quality: A Stochastic Regional Analysis

Abstract

Potential economic and environmental effects of broad versus targeted nitrogen use policies are evaluated in five Central High Plains subregions. Results indicate that per-acre restrictions are more effective than total nitrogen restrictions in reducing expected nitrogen losses in runoff and percolation, and reducing percolation losses at all probability levels. Because of the distribution of soils within subregions, targeting nitrogen reductions to more permeable soils may not produce the anticipated reductions in percolation. It may be more effective to target nitrogen restrictions on production systems than on soil types. Reductions in producer income are less for targeted than for broad policies.Agricultural chemicals and fertilizers have been cited as significant groundwater contaminants (Office of Technology Assessment). EPA reported that over seventy pesticides were detected in the groundwater of thirty-eight states, and forty-six pesticides found in groundwater in twenty-six states were from agricultural use (Office of Technology Assessment). Nitrates are the most commonly detected agricultural chemicals in groundwater. EPA estimated that more than half of the nation's wells contain nitrates, with about 1.2% of the community wells and 2.4% of the rural wells having concentrations above

Integrating Economic and Ecological Impact Modelling: Dynamic Processes in Regional Agriculture under Structural Change

“…Mapp et al (1994) analyse regional water quality impacts of limiting nitrogen use by broad versus targeted policies in five regions within the Central High Plains. Broad based policies analysed include: (i) limitations on the total quantity of nitrogen applied (total restriction) and (ii) limitations on per-acre nitrogen applications (per-acre restriction).…”

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“…11 This example was constructed used real, estimated functions from several sources, namely Yadav [24] (contamination function), Larson et. al [9] (production and emissions functions), as well as Zeitouni and Dinar [25] and Feinermann and Knapp [4] (some aquifer characteristics, pumping costs).…”

“…Xepapadeas [22] presents such incentives for the case of a dynamic pollutant accumulation model with imperfect monitoring. Given implementation difficulties, there is also some work in the literature evaluating suboptimal pollution control instruments (see Shortle and Dunn [20], Larson et al [9], Helfand and House [8], and Mapp et al [11]). This paper uses a dynamic resource management perspective to show how an optimal policy takes into account effects on water stock as well as on its quality.…”

A hydro-economic modeling framework for optimal management of groundwater nitrate pollution from agriculture

“…If these policies are implemented on a regional basis, each policy is likely to have a different impact on the expected quantity of nitrate lost in runoff and percolation, as well as on producer net returns. Tradeoffs between nitrate losses and net return reductions will likely vary by production situation and region (Mapp et al, 1994):…”

“…Other studies have applied a compartmental approach, in which the results of a nitrogen management model are tested using groundwater flow simulation models (e.g., Bernardo et al, 1993;Mapp et al, 1994). In these cases, only the groundwater flow has been used to calculate the changes groundwater table so the pumping costs can be readjusted according to the different policies.…”