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The Polluter Pays Principle as a policy tool in an externality model for nitrogen fertilizer pollution

Research output: Contribution to journal › Review article › peer-review

Abstract

A policy based on the Polluter Pays Principle (PPP) with respect to the subject of contamination by nitrogen fertilizer is proposed. The mechanism is tested via a cost-efficient input tax policy to supply clean drinking water that is subject to contamination by nitrogen fertilizer and to quantify the welfare change due to public control. The paper proposes, for different water scarcity conditions, a policy that supports the legal principle of the PPP, by compensating the victim for the residual pollution not abated by the cost efficient solution, without any effects on the efficiency criterion. By introducing a Welfare Change Index (WCI) which measures the significance of an authority's intervention in dealing with externalities, we suggest that for relatively high and moderate water scarcity conditions, welfare change supports public intervention. However, for low scarcity conditions, welfare change is low, which discourages public intervention.

Original languageEnglish
Pages (from-to)470-489
Number of pages20
JournalWater Policy
Volume14
Issue number3
DOIs
StatePublished - 2012

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

  1. SDG 6 - Clean Water and Sanitation
    SDG 6 Clean Water and Sanitation
  2. SDG 17 - Partnerships for the Goals
    SDG 17 Partnerships for the Goals

Keywords

  • Economic incentives
  • Groundwater contamination
  • Polluter Pays Principle
  • Water policy tools
  • Welfare change

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Water Science and Technology
  • Management, Monitoring, Policy and Law

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