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Abstract
Animal waste from concentrated animal feeding operations (CAFOs) is a significant
contributor to the nitrate contamination of groundwater. Some manures
also contain heavy metals and salts that may build up either in cropland
or groundwater. To find cost-effective policies for pollution reduction at the
farm level, an environmental-economic modeling framework for representative
CAFOs is developed, where the owner of the operation is a profit-maximizer
subject to environmental regulations. The model incorporates various components
such as herd management, manure handling system, crop rotation, water
sources, irrigation system, waste disposal options, and pollutant emissions.
Decision rules from the optimization problem demonstrate best management
practices for CAFOs to improve their economic and environmental performance.
Results from policy simulations suggest that direct quantity restrictions of emission
or incentive-based emission policies such as a field emission tax are much
more cost-effective than the standard approach of limiting the amount of animal
waste that may be applied to fields. Furthermore, incentive-based emission
policies are shown to have advantages over direct quantity restrictions under
certain conditions. We also demonstrate the importance of taking into account
the integrated effects of water, nitrogen, and salinity on crop yield and nitrate
leaching as well as the spatial heterogeneity of nitrogen/water application when
designing policy mechanisms.