Economic Implicatons of Public Policies to Change Agricultural Nitrogen Use and Management.

The objective of environmental policies is to motivate organizations and entrepreneurs to reduce the health and environmental risks associated with their production processes or products.  However, imposing, or even encouraging, changes in production processes or products imply that resources (private and/or public) must be reallocated.  Reallocating resources is often synonymous with increasing costs for at least some of the economic agents within the affected sectors. This chapter of the Monograph entitled “Nitrogen in Agricultural Systems” 1) notes the environmental and physical context surrounding policies to address nitrogen pollution from agricultural sources; 2) examines the physical and economic relationships critical to an economic analysis of environmental policy impacts on fields, farms, aquifers, or watersheds; 3) summarizes the results of selected empirical studies which attempt to quantify the economic impacts of different policies to reduce environmental risks from agricultural nitrogen; 4) highlights the characteristics of non-point source (NPS) pollution that affect policy; and 5) discusses the economic and administrative aspects of the most common environmental policy instruments proposed to address off-site impacts from nitrogen use in crop production