Context and capacity: The potential for performance-based agricultural water quality policy

Current Canadian policy approaches to agricultural water quality encourage the adoption of best management practices through voluntary, incentive-based measures. Despite these measures, concerns about agricultural impacts on water quality persist. Performance-based policy approaches with incentives that are tied to defined outcomes, and not to particular practices, may have an important role in managing water quality. Five performance-based approaches to address water quality in agricultural landscapes were identified: water quality trading/permitting, differentiated payments for ecosystem services, reverse auctions; emissions charges, and cross-compliance (a hybrid measure). The purpose of this paper is to critically assess the institutional and socio-cultural context that facilitated existing performance-based policy instrument adoption. Through this analysis, three key contextual factors were identified as enablers of performance based approaches: (1) social context, (2) institutional capacity and (3) standardized, consistent and robust estimation methodologies. A framework was developed to classify performance based programs and approaches. The application of the findings from this research and the classification framework provide an organized approach to assess the feasibility of implementing performance-based approaches for agri-environmental water quality policy.