Alternative Green Payment Policies under Heterogeneity When Multiple Benefits Matter

Jinhua Zhao, Catherine L. Kling, Lyubov A. Kurkalova
July 2003  [03-WP 341]

We investigate the environmental impacts of several forms of policies that offer farmers subsides in return for adoption of conservation tillage. The policies differ on whether the tillage practice or one of the environmental benefits is targeted. We develop an environmental Lorenz curve that fully represents the performance of the targeting policies, and we show that these curves can be used directly to help select the optimal targeting strategy for special classes of social welfare functions. We apply the model to the state of Iowa.

Keywords: environmental Lorenz curve, multiple benefits of conservation tillage, targeting subsidy policy.

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