CONTRACTING FOR NON-POINT-SOURCE POLLUTION ABATEMENT

This paper presents an incentive scheme to control agricultural non-point-source pollution. The analysis is based on a nested agent framework with three parties; farmers, a country's government, and the governments of all countries that affect each other's environmental quality. Unlike previous analysis of incentive schemes to control agricultural pollution, we suggest non-individual contracts between farmers and a regulating authority as a solution to the domestic pollution problem. Our incentive scheme proposes collective penalties as a way to control pollution. To solve the international problem of pollution management of a common (water) resource, we propose an international agency with authority to write and enforce contracts in each of its member countries. We show that the information requirement on a country's government can be substantially reduced if contracts can be made non-individual.


Issue Date:
1996
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/12620
Total Pages:
31
Series Statement:
Staff Paper 392




 Record created 2017-04-01, last modified 2017-08-23

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