Nitrate pollution control under soil heterogeneity

This article presents results on measures to abate nitrogen pollution when soil heterogeneity is considered by using a dynamic model of corn production. Several policy options for the control of nitrate pollution are evaluated by their cost efficiency. While results show that a nitrogen standard or tax is a good second-best control instrument, neglecting dynamics may lead to the wrong choice of instrument. Other important findings for the design of nonpoint pollution policy measures are that water pricing, as advocated by the Water Framework Directive, is inefficient as a pollution abatement tool, and differentiating control measures by soil type enhances welfare, although welfare gains may be small. (c) 2005 Elsevier Ltd. All rights reserved.