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Simulated Trading for Maryland's Nitrogen Loadings in the Chesapeake Bay

Published online by Cambridge University Press:  15 September 2016

James C. Hanson  and
K. E. McConnell
James C. Hanson
Affiliation:
Department of Agricultural and Resource Economics at the University of Maryland in College Park, Maryland
K. E. McConnell
Affiliation:
Department of Agricultural and Resource Economics at the University of Maryland in College Park, Maryland
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Abstract

We investigate nutrient trading for point and non-point sources for the Bay Restoration Fund in Maryland. We demonstrate how to use the proceeds from the tax revenue to mimic a market by trading high-cost upgrades of sewage treatment plants for low-cost winter cover crops. Under an optimistic assumption about costs for non-point sources and naïve assumptions about the lag from planting cover crops to changes in nitrogen load, we calculate that 100 percent of abatement could be achieved at 56 percent of total costs, while in a pessimistic scenario, 100 percent of abatement could be could be achieved at 83 percent of total costs.

Keywords

Chesapeake Baycover cropsnitrogen abatementnutrient tradingsewage treatment plantstrading ratioswater pollution
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 37 , Issue 2 , October 2008 , pp. 211 - 226
Copyright
Copyright © 2008 Northeastern Agricultural and Resource Economics Association 

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