IngentaConnect Prevention versus Treatment under Precautionary Regulation: A Cas...

Authors: Lichtenberg, Erik¹; Penn, Tony M.²

Source: American Journal of Agricultural Economics, Volume 85, Number 1, February 2003 , pp. 44-58(15)

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In this Subject: Agriculture (General) , Business , Economics
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Abstract:

Policy discussions on agricultural pollution problems characterize prevention as more cost effective and precautionary than ex post treatment. We derive conditions under which treatment alone is more cost effective in situations involving multiple sources of emissions, multiple sites affected, and a commonly used precautionary approach to uncertainty. We also show that a greater degree of precaution can result in less reliance on prevention. An empirical case study indicates that treatment alone is the most cost-effective means of dealing with nitrate in most Maryland community water system wells. The use of leaching prevention measures is restricted to the most intensive poultry producing areas. The incremental cost of precaution is substantial.

Keywords: groundwater contamination; nitrate; nonpoint source pollution; pollution prevention; water pollution

Document Type: Research article

DOI: 10.1111/1467-8276.t01-2-00102

Affiliations: 1: Erik Lichtenberg is a professor in the Department of Agricultural and Resource Economics, University of Maryland, College Park. 2: Tony M. Penn is an economist in the Damage Assessment Center, National Oceanic and Atmospheric Administration, Silver Spring, Maryland.

Prevention versus Treatment under Precautionary Regulation: A Case Study of Groundwater Contamination under Uncertainty