Green Payments for Nonpoint Pollution Control

Abstract

If there is to be a continued or expanded use of green payments to reduce agricultural nonpoint pollution, additional research is needed on how they can be designed to achieve economic and environmental goals with maximum economic performance. The literature on nonpoint incentives can provide some insight. However, this literature deals primarily with economic efficiency and gives no weight to farm income objectives that may be important to the design of a green payments program. Equity concerns and the voluntary nature of participation have yet to be adequately addressed. In this paper, we discuss fundamental issues in the design of green payment programs to reduce nonpoint pollution, given voluntary participation and equity considerations. Particularly important issues include program goals, the basis for payments, the structure of payment instruments, payment recipients, and economic trade-offs arising from these choices.