Optimal Design of a Voluntary Green Payment Program Under Asymmetric Information
JunJie Wu, Bruce A. Babcock
February 1995 [95-WP 131]
Wu, J. and B.A. Babcock. 1995. "Optimal Design of a Voluntary Green Payment Program Under Asymmetric Information." Working paper 95-WP 131. Center for Agricultural and Rural Development, Iowa State University.
Green payment programs, by which the government pays farmers directly for environmental benefits, have been proposed as an alternative to the current method of achieving environmental benefits by restricting farming practices in exchange for deficiency payments. This paper examines a green payment program applied to irrigated corn production in the Oklahoma Panhandle, where nitrogen fertilizer is a conjoint source of pollution.