Title

Green payments and dual policy goals

Campus Units

Economics, Center for Agricultural and Rural Development

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

11-2007

Journal or Book Title

Journal of Environmental Economics and Management

Volume

54

Issue

3

First Page or Article ID Number

323

Last Page

335

DOI

10.1016/j.jeem.2007.03.003

Abstract

We use a mechanism design framework to analyze the optimal design of green payment policies with the dual goals of conservation and income support for small farms. Each farm is characterized by two dimensions of attributes: farm size and conservation efficiency. Policymakers may not be able to use the attributes as an explicit criterion for payments. We characterize optimal policy when conservation efficiency is unobservable to policymakers, and when farm size is also unobservable. An income support goal is shown to reduce the conservation distortion caused by asymmetric information. The cost of optimal green payment mechanisms is shown to depend crucially on whether large or small farms have greater conservation efficiency.

Comments

This is a working paper of an article published as Feng, Hongli. "Green payments and dual policy goals." Journal of Environmental Economics and Management 54, no. 3 (2007): 323-335. doi:10.1016/j.jeem.2007.03.003. Posted with permission.

Copyright Owner

Elsevier Inc.

Language

en

File Format

application/pdf

Published Version

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