Alternative Green Payment Policies under Heterogeneity When Multiple Benefits Matter
Jinhua Zhao, Catherine L. Kling, Lyubov A. Kurkalova
July 2003 [03-WP 341]
Zhao, J., C.L. Kling, and L.A. Kurkalova. 2003. "Alternative Green Payment Policies under Heterogeneity When Multiple Benefits Matter." Working paper 03-WP 341. Center for Agricultural and Rural Development, Iowa State University.
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.