Improving agricultural pollution abatement through result-based payment schemes

Sidemo Holm, W., Smith, H.G. & Brady, M., 2018. Improving agricultural pollution abatement through result-based payment schemes. Land Use Policy, 77, pp.209 – 219.
| Published | English
Sidemo Holm, William ; Smith, Henrik G. ; Brady, Mark
Centre for Environmental and Climate Research (CEC)
BECC - Biodiversity and Ecosystem services in a Changing Climate
AgriFood Economics Centre, SLU
Action-based payments that compensate farmers for adopting land-management measures to preserve and en- hance the environment have been criticized for being ineffective. The root of the problem is that farmers are not paid for achieving a desired environmental benefit, but compensated for their costs of management. There is growing interest in formulating result-based economic incentives. By paying for an environmental benefit and allowing flexibility in how to achieve it, farmers are given an incentive to exploit their comparative advantages for achieving a desired environmental benefit cost-effectively. However, the feasibility and relative effectiveness of result-based payments for reducing agricultural pollution is contentious. In this study, we designed and evaluated a result-based payment scheme for nonpoint-source pollution abatement from arable land. In a case study in southern Sweden, the cost-effectiveness of the new scheme was compared with that of an existing action-based scheme for vegetated buffer strips to prevent the pollutant, particulate phosphorus, from reaching water resources. The results suggest that result-based payment schemes based on modeled outcomes of pollution abatement are feasible and will considerably improve cost-effectiveness compared to action-based schemes, by relocating buffer strips to where they are more effective and not simply where they have the lowest costs for farmers.
Performance based policy ; Nonpoint source pollution ; Nutrient runoff ; Buffer strip ; Agri-environmental scheme ; Cost-effective ; Agricultural Science ; Environmental Sciences
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