Nonpoint Pollution Runoff Tough to Measure

December 10, 1999

A new study from USDA indicates nonpoint emissions from agricultural lands cannot be measured at "reasonable cost" with current technologies, because they are diffuse -- they move from fields in a great number of places -- and are affected by random events such as weather.

"This randomness narrows the way that policy goals with good economic properties are defined and limits the types of policy tools that can be used to attain a cost-effective outcome," the report says. "Runoff depends on many site-specific factors. The more policies and goals are able to address these site-specific factors, the more efficient nonpoint policies will be."

There are two general types of policy goals: physically based goals that involve water quality and runoff and input and technology-based goals. Physically based goals are limited; first, the random nature of the nonpoint process requires that these goals be set to attain a probability of occurrence of an outcome as opposed to a specific outcome, such as an average pollution level to be achieved or that a particular pollution level be achieved 95% of the time, the study notes.

Secondly, the use of more stringent goals may not result in an expected reduction in damages. If not, "then the adoption of more stringent goals (i.e., a 25% reduction in pollution levels as opposed to a 20% reduction) may actually make society worse off in its attempt to reduce pollution."

Also, the pollution control method that achieves a physically based goal with greatest expected social net benefits generally will differ from the cost-effective method of achieving the same goal. "The differences are due to risk effects that arise because of the impact of each input on expected damages is not accounted for in the cost-effective outcome," the study says.

Input and technology-based goals offer a practical alternative. For example, instead of designing policies to reduce mean nitrogen loadings, the goal may be a specified reduction in nitrogen fertilizer application rates, says the study.

"Such goals give policymakers more direct control over the factors that determine the distribution of outcomes and can be chosen to ensure both a reduction in expected damages and an expected improvement in water quality," according to the study. "In addition, these goals can be set such that the cost-effective outcome is preferred to outcomes that achieve the goals at higher cost" and the goals "can be set deterministically, making it easier to verify whether or not the goals are met." It could take years to obtain a large enough sample to determine if "probabilistic ambient water quality goals" are achieved.

The entire report can be accessed on the Internet at http://www.econ.ag.gov/epubs/pdf/aer782.