This presentation promises to be a mostly harmless introduction to economic issues surrounding spatial targeting for diffuse pollution control at the catchment scale. It is pitched at non-economists and presents our ongoing research into cost-effective ways to encourage spatially targeted policies using a payment for ecosystem services (direct farmer payments) or through an innovative environmental cross compliance scheme. Two farm surveys of farmers in the River Eden and River Wensum catchments will be discussed. We will also report on our efforts to build a biophysical economic modelling framework for calculating the economic savings from using spatially targeted policies in isolation or in conjunction with other standard mitigation measures. This framework will enable us to determine whether there is a trade-off between the degree of spatial targeting and cost of implementing micro-targeted mitigation measures in the landscape and help identify the circumstances under which spatial targeting provides the best return on regulatory investment for reducing diffuse pollution etc.