Does Complex Hydrology Require Complex Water Quality Policy?

16 Pages Posted: 14 Jan 2014

See all articles by Simon Anastasiadis

Simon Anastasiadis

Motu Economic and Public Policy Research

Suzi Kerr

Motu Economic and Public Policy Research Trust

Marie‐Laure Nauleau

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE)

Tim Cox

CDM Smith

Kit Rutherford

NIWA

Date Written: January 2014

Abstract

Nonpoint‐source water pollution is frequently considered intractable because it is hard to regulate large numbers of small sources and because the science associated with assessing the impact of each source is complex. New Zealand has demonstrated that it is possible to implement a simple cap‐and‐trade system to help reduce nitrogen leaching from many small farms and thereby protect water quality. This paper relates to the second challenge: are complex regulatory systems worthwhile when nitrogen delivery is complex? When nitrogen moves through groundwater to a lake, leaching from different farms reaches the lake at different times and the damage caused is temporally differentiated. Policy that regulates farmers according to the timing of their nitrogen delivery will be more complex than policy that does not. Whether the gain in efficiency justifies this additional complexity can be assessed through modelling. We use an integrated model to estimate the gains from complex nitrogen regulation that incorporates groundwater delivery times relative to simple nitrogen regulation that does not. We find that the gains from more complex regulation are small in the catchment we study and cannot justify the additional complexity required. A sensitivity analysis enables us to identify the types of catchments where complex regulation may be worthwhile.

Keywords: groundwater, hydrology, nitrogen trading, nonpoint‐source pollution, water quality

Suggested Citation

Anastasiadis, Simon and Kerr, Suzi and Nauleau, Marie-Laure and Cox, Tim and Rutherford, Kit, Does Complex Hydrology Require Complex Water Quality Policy? (January 2014). Australian Journal of Agricultural and Resource Economics, Vol. 58, Issue 1, pp. 130-145, 2014. Available at SSRN: https://ssrn.com/abstract=2378641 or http://dx.doi.org/10.1111/1467-8489.12024

Simon Anastasiadis (Contact Author)

Motu Economic and Public Policy Research ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

HOME PAGE: http://www.motu.org.nz

Suzi Kerr

Motu Economic and Public Policy Research Trust ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand
+64 4 383 4250 (Phone)
+64 4 383 4270 (Fax)

Marie-Laure Nauleau

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE) ( email )

92245 Malakoff Cedex
France

Tim Cox

CDM Smith

6800 Old Collamer Rd
N #3
East Syracuse, NY 13057
United States

Kit Rutherford

NIWA ( email )

No Address Available

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