Comparative institutional and policy analysis of nonpoint source agricultural nutrient pollution in the Chesapeake Bay
Date
2016
Authors
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Publisher
University of Delaware
Abstract
Reducing excess nitrogen and phosphorous (nutrient) runoff into ground and surface waters is a global concern (Jacobs, 2013). More than two decades of effort in the United States Chesapeake Bay region to reduce nutrient excess has seen slow progress (U.S. EPA, 2010). The externality of nutrient excess has spurred environmental groups to seek rights they view as unallocated in resolution processes. This dissertation presents several ideas regarding nutrient externality. The second chapter argues that the judicial process is poorly positioned to resolve this conflict—relative to other resolution processes—and other processes would be more likely for environmental groups to achieve their goal of improving environmental quality. The third chapter addresses the design and implementation of effective policy for nutrient reduction from nonpoint source agriculture. Nutrient management planning and nutrient trading requirements are comparatively analyzed in Maryland, Pennsylvania, and Virginia to determine factors in policy design that affect policy outputs. The results indicate that an existing institutional structure utilizing incentive-based nutrient management planning may be more compatible with nutrient trading policies and in turn may reduce the cost of monitoring. Although monitoring cost increase with nutrient trading, the existing policy design in Virginia may provide capacity to lower monitoring cost. The fourth chapter analyzes payment for environmental services (PES) and nutrient trading with a novel approach. A nutrient index combines PES for nitrogen and phosphorous reduction and a sensitivity analysis, into a single payment to elicit potential costs of supply in the nutrient market. This nutrient index is the first of its kind to distinguish payments made for multiple environmental services and to explore the impact on policy effectiveness with overlapping nutrient reduction policies. PES and nutrient trading policies pay for the same service yet PES, as demonstrated in the results of this study, has potential to increase prices of nutrient credits (establish a price floor) or collapse the nutrient trading market altogether. In addition, the existence of the trading market has potential to reduce the effectiveness of existing PES, which already suffers from ineffective payment for nutrient services.