Economic approach for control agricultural nonpoint source pollution in China

This paper mainly discusses the feasibility to establish economic policy systems for control and management of agricultural nonpoint source pollution in China. The current situation of serious agricultural nonpoint source pollution in China is described firstly. Based on the environmental policy and economics theories, the system of economic policies for control and management of agricultural nonpoint source pollution is designed in this paper. This system includes the policy objective, the designing principle and the methods. The key issues include pollution charge, inputs tax for restriction, subsides for induction and incentive, effluent trading for least cost reduction. The emphases are optimized on inputs tax and agricultural chemical tax permit under complete information, as well as sub-optimized inputs tax under incomplete information, subsides for farm due to positive and negative externality. The functions and suitability of the policies are also analyzed in the paper. According to the field experiment results and other relating economic data in watershed of the Chaohe River, Beijing, some economic approaches to reducing agricultural nonpoint source pollution are proposed. The main idea is to encourage and support the farmers to improve their farming way, and to implement the policy of castigating charge simultaneously. The feasibility of the policies are analyzed with consideration of economy, technology and institution. It is concluded that the economic policies are necessary and feasible.