Submitted to: Ecological Economics
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 1/12/2001
Publication Date: N/A
Citation: Interpretive Summary: This paper illustrates how economic models and water quality models might be used to evaluate the economic and water quality impacts of alternative policies. The method is illustrated using four types of targeted taxes, a flat herbicide tax, and bans on the use of certain herbicides. For each alternative, the economic costs to producers are compared with predicted changes in water quality. For a given level of water quality this allows the alternative with the least economic cost to be selected. Of the alternatives illustrated, no single alternative is most cost-effective at achieving a broad range of water quality levels. The most cost-effective alternative depends on the level of water quality desired and the relative importance placed on human health and aquatic habitat impacts of groundwater and surface water quality.
Technical Abstract: Public policy toward pesticide use in agriculture can benefit from data coming from models that integrate ecological and economic constraints into cropping decisions and pesticide use. Herein we use such a model to illustrate the environmental and economic effectiveness of a specific set of tools used to promote sustainable agriculture with less pesticide runoff f--incentive based instruments created by risk-indexed herbicide input- taxes. We measure risk by health advisory levels and by an ecological economic simulation model that estimates predicted exposure levels. We explore whether this innovative solution of herbicide input-taxes does better at reducing losses to farm net returns, and surface and groundwater loadings than quantity restrictions. Using the integrated CEEPES model, our results suggest that risk-indexed input taxes by information about individual herbicide exposure levels can be a cost-effective tool to reduce epredicted groundwater exposures. Our example showed that no single policy was efficient at simultaneously improving groundwater and surface water quality. Instead we show how an efficient policy set might be constructed. For our example, we find exposure-induced taxes were most efficient for small percentage reductions in overall exposure, bans were efficient for medium reductions, and flat taxes were efficient for high reductions.