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Economic of Spatial Targeting

Ashar Aftab, Durham University

This interdisciplinary research combines recent advances in science and innovative economic incentives to develop forward-looking and practically implementable spatially targeted policies to regulate agricultural externalities. The substantial efficiency savings from spatial targeting offers a rare ‘win-win-win’ for regulators, farm businesses and the environment. Present regulation does not discriminate at a sufficiently precise scale between lands at high and low risk of generating and transporting pollution. Such non-discriminatory blanket measures are implemented on all land irrespective of its tendency to generate pollution and it’s hydrological connectivity i.e., the probability of it being ‘linked’ or able to transfer the pollution to a water body. Subjecting all land to the same restrictive controls irrespective of actual contribution to catchment NP is neither efficient nor fair, a burden on farmers and expensive to enforce.

This interdisciplinary research will quantify the economic and environmental benefits of using spatially targeted regulation on only high-risk land units (prone to generating pollution and hydrologically connected to the receiving waters) by making use of recent advances in surveillance science and risk profiling (SCIMAP). Thus farmers will mainly take control measures, and regulators will mostly inspect practices, on targeted high-risk ‘leaky’ land. In addition the research will also investigate the transferability of our novel policy recommendations across catchments, thus making them more broadly applicable; determine the ‘hidden transaction costs’ of policies through structured surveys of farmers and regulators; quantify the trade-off between positive and negative agricultural externalities; and determine a coordinated multi-pollutant policy response in a stochastic regulatory framework.