Source: UNIVERSITY OF CALIFORNIA, RIVERSIDE submitted to
ECONOMICS OF POLLUTION CONTROL POLICY FOR ANIMAL FEEDING OPERATIONS
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
TERMINATED
Funding Source
Reporting Frequency
Annual
Accession No.
0212098
Grant No.
(N/A)
Project No.
CA-R-ENS-7644-H
Proposal No.
(N/A)
Multistate No.
(N/A)
Program Code
(N/A)
Project Start Date
Apr 1, 2007
Project End Date
Mar 31, 2012
Grant Year
(N/A)
Project Director
Baerenklau, K. A.
Recipient Organization
UNIVERSITY OF CALIFORNIA, RIVERSIDE
(N/A)
RIVERSIDE,CA 92521
Performing Department
ENVIRONMENTAL SCIENCES
Non Technical Summary
Animal feeding operations contribute to persistent water and air pollution problems in California. This project examines the costs and benefits of various pollution control policies for animal feeding operations.
Animal Health Component
(N/A)
Research Effort Categories
Basic
(N/A)
Applied
100%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
1330320301020%
1410410301010%
6013499301020%
6050320301030%
6103499301020%
Goals / Objectives
This project has two main objectives: 1) Predict the effects of alternative pollution control policies for animal feeding operations (AFOs). 2) Estimate the benefits of pollution reduction from AFOs. The first objective accomplishes two things. First, it helps to resolve the ongoing debate in the resource economics literature regarding the anticipated environmental and economic effects of nutrient management plans (NMPs). When these effects are better understood, pollution control policies can be modified and improved. Second, it considers whether other policies (e.g., emissions taxes, tradable permits for polluting inputs or waste outputs, centralized waste treatment, receptor point treatment, relocation assistance) might be able to achieve the same pollution reduction targets more cost-effectively. This objective continues and expands a line of work already initiated by the PI. The second objective addresses the related question of the stringency of pollution control policy for California AFOs. Currently relatively little is known about the value of environmental impacts attributable to AFOs in California. The value of these impacts can be measured as economic losses (damages) using various non-market valuation techniques. Studies that have implemented such techniques outside California have found some patterns - AFOs seem to have measurable impacts only on their immediate neighbors - and have left some questions unanswered - AFOs can either raise or lower the values of nearby property depending on the magnitudes of competing effects. This objective initiates a new line of work by the PI who has experience using non-market valuation techniques in other applications. Both of these objectives serve a common goal: establishing efficient and effective environmental policies for California AFOs. Ideally any government regulation should create benefits for at least one segment of society that are greater than the costs it creates for another. Pursuing this principle over the long-run will tend to improve social welfare as a whole. Currently we do not know enough about the potential benefits and costs of AFO regulation to determine an efficient regulatory approach. The objectives of this project aim to fill these knowledge gaps.
Project Methods
Most of the work for Objective 1 involves the development and use of mathematical programming models to simulate farm-level decision-making, agricultural production, waste generation, and the fate and transport of pollutants. Such models incorporate the relevant production components, environmental system components, economic factors affecting farm operations, and possibly operator characteristics. After the model is calibrated, simulations may be conducted to determine the anticipated effects of different policy approaches on various aspects of farm operations including production, net income, technology choice, and waste generation and disposal. Software packages likely to be used include Gauss, GAMS, and Mathematica. Extensive use of library and information resources at UCR also is anticipated. Most of the work for Objective 2 involves statistical analyses of datasets containing both AFO and population (socio-economic) characteristics as well as indicators of ambient environmental quality to measure the effects of AFOs on social welfare. Methods for determine such effects differ depending on the specific environmental impact of concern, but the methods most likely to be used by this project are the Hedonic Pricing method and the Contingent Valuation method. The Hedonic Pricing method has been used previously to evaluate the local environmental effects caused by AFOs. This method involves developing a statistical model of property values as a function of relevant factors including the characteristics of any structures on the property, neighborhood traits, proximity to services, as well as the characteristics of nearby AFOs and indicators of local environmental quality. The first stage of this analysis produces a hedonic price function that summarizes the effect of AFO characteristics and environmental quality on property values. With additional survey data and/or assumptions about individual demand for property attributes, a second stage analysis can generate a willingness-to-pay function that summarizes the welfare effects of changes in AFO characteristics or environmental quality. For individuals living further away from AFOs who may be less directly affected by the associated environmental externalities, the Contingent Valuation method can be used to determine the magnitudes of less obvious welfare effects (e.g., perceived risk of water or air pollution exposure, non-use values associated with farmland amenities and/or pollution reduction, and periodic nuisances such as odors or congestion from trucks and machinery when transiting near AFOs). This is accomplished by surveying a representative sample of the population, describing a potential regulatory change and its anticipated effects, and asking respondents whether they would approve of such a change if it also entailed a specified cost to their household. Contingent Valuation is a widely-used and accepted method in resource economics, but the PI is not aware of any cases where it has been applied to the environmental impacts of AFOs. Funding for survey work will be obtained from other (non-AES) sources.

Progress 04/01/07 to 03/31/12

Outputs
OUTPUTS: The main output from this project is a PhD student who will graduate in June 2012 and who recently accepted a position as an Assistant Professor (tenure track) in the Department of Economics at the University of New Mexico. Funding for the project has enabled her to disseminate her dissertation results to interdisciplinary audiences at conferences in San Francisco, Berkeley, and Davis. She also has presented her work at seminars at the University of Wisconsin - Whitewater, Iowa State University, and the University of New Mexico. In addition, the project has supported crucial Staff Research Assistant activities in the Department of Environmental Sciences. PARTICIPANTS: Kenneth Baerenklau (UC Riverside, PI), Jingjing Wang (UC Riverside, PhD student / Graduate Student Researcher), Thomas Harter (UC Davis, collaborator), Ken De Groot (Sierra View Dairy, partner). TARGET AUDIENCES: Agricultural producers (particularly dairy farmers), environmental policy makers, environmental researchers (scientists and economists working on ground water quality). PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
The student's work has clarified the important relationships between water, salt, and nitrogen in crop production and field emissions to groundwater. She has developed the first and only field-level economic model of crop production and waste emissions that accounts for all three of these factors. Results for the crop production model have been tested against available field data for nitrogen and show significant improvements compared to previous modeling approaches. The crop production model has been linked to a whole-farm model of an animal feeding operation (specified as a representative California dairy) to study the economic and environmental effects of alternative groundwater pollution control policies. Results for the whole-farm model demonstrate the cost-ineffectiveness of the current approach of limiting land application of nutrients, as well as the potential cost savings associated with alternative approaches of directly regulating emissions to groundwater. This work will benefit farmers, policy-makers, and researchers who are working on the difficult problem of developing cost-effective solutions for the problem of groundwater pollution from large-scale animal feeding operations. We expect that the project will enhance both farm profitability and groundwater quality by facilitating appropriate crop selection by farmers and policy selection by regulators. We anticipate 2-3 peer reviewed journal articles to be produced from the dissertation work.

Publications

  • No publications reported this period


Progress 01/01/10 to 12/31/10

Outputs
OUTPUTS: This project continues to support an outstanding doctoral student who is working on a dissertation on a closely related topic. It also continues to support crucial Staff Research Assistant activities in the Department of Environmental Sciences. During the reporting period, the project allowed the graduate student to travel to a Water Education Foundation conference in San Francisco and a student conference at UC Berkeley where she presented some of the results from her work. She is making excellent progress and is on track to graduate on time in Summer 2012. PARTICIPANTS: This project supports Ms. Jingjing Wang, a doctoral student in the Department of Environmental Sciences at UC Riverside. It also has provided Ms. Sanaz Sohrabian, an undergraduate student in the Department of Environmental Sciences at UC Riverside, the opportunity to gain experience as a research assistant under Ms. Wang's supervision. TARGET AUDIENCES: Researchers in the fields of agricultural and natural resource economics; operators of confined animal feeding operations; environmental policy makers. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
The student's work is clarifying the important relationships between water, salt, and nitrogen in crop production and field emissions to groundwater. She is developing the first and only field-level economic model of crop production and waste emissions that accounts for all three of these factors. Results to-date suggest that crop yields exhibit complex and unexpected responses to changes in applied water, salt, and nitrogen. The field-level model eventually will be linked with a whole-farm model of an animal feeding operation to study the economic and environmental effects of alternative groundwater pollution control policies. This model will benefit farmers, policy-makers, and researchers who are working on the difficult problem of developing cost-effective solutions for the problem of groundwater pollution from large-scale animal feeding operations. We expect that the project will enhance both farm profitability and groundwater quality by facilitating appropriate crop selection by farmers and policy selection by regulators.

Publications

  • No publications reported this period


Progress 01/01/09 to 12/31/09

Outputs
OUTPUTS: This project continues to support an outstanding female doctoral student who is working on a dissertation on a closely related topic. It also continues to support crucial Staff Research Assistant activities in the Department of Environmental Sciences. During the reporting period, the project allowed the PI and the graduate student to travel to the annual meetings of the American Applied Economics Association in Milwaukee, WI where the project benefited from discussions with interested researchers and the student benefited from taking an advanced mathematical modeling short course that is directly relevant to her dissertation work. During the reporting period, the student also successfully defended her dissertation proposal and advanced to candidacy. She is now working full-time on her dissertation and has been asked to present preliminary results at a groundwater resources conference in San Francisco in June. She is making excellent progress and is on track to graduate on time in Summer 2012. PARTICIPANTS: Kenneth Baerenklau (PI): graduate student training. Jingjing Wang (UCR Graduate Student): dissertation research. TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
The student's work is clarifying the important relationships between water, salt, and nitrogen in crop production and field emissions to groundwater. She is developing the first and only field-level economic model of crop production and waste emissions that accounts for all three of these factors. This model will benefit farmers, policy-makers, and researchers who are working on the difficult problem of developing cost-effective solutions for the problem of groundwater pollution from large-scale animal feeding operations. We expect that the project will enhance both farm profitability and groundwater quality by facilitating appropriate crop selection by farmers.

Publications

  • No publications reported this period


Progress 01/01/08 to 12/31/08

Outputs
OUTPUTS: This project currently supports an outstanding female doctoral student who is developing a dissertation on a closely related topic. PARTICIPANTS: Kenneth Baerenklau (PI): graduate student training, applying for additional funding sources. Jingjing Wang (UCR Graduate Student): dissertation proposal development. Milt McGiffen (UCR informal collaborator): designing a field experiment, applying for additional funding sources. TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
This work has shown that revised nutrient pollution regulations for animal feeding operations (1) are likely to have greater economic impacts on large producers than has been suggested by previous studies, and (2) are likely to have significant cross-media pollution effects as aqueous nitrate is converted into gaseous ammonia. It also has shown that improved input management and irrigation system uniformity are promising methods for reducing both waste emissions and disposal costs.

Publications

  • Baerenklau, K.A., N. Nergis and K.A. Schwabe. 2008. "Effects of Nutrient Restrictions on Confined Animal Facilities: Insights from a Structural Model." Canadian Journal of Agricultural Economics 56(2): 219-241.