BECC PhD student wins scholarship for best thesis
On February 3, 2016, the trade association Foder och Spannmål, announced its’ annual scholarship for the best thesis in economics at the graduate level of relevance to agriculture or food. The scholarship is SEK 20,000 and goes to PhD student William Sidemo Holm for the paper "Improving agricultural pollution abatement through result-oriented Remuneration schemes” with the motivation: “For thoroughly and consistently studying a highly relevant issue for Swedish and European environmental and agricultural policies. The thesis is of high academic quality and has high relevance for Swedish agricultural production and policy makers”.
About the paper
Environmental schemes where participants are rewarded for implementing voluntary measures are commonly used to remedy environmental issues in agricultural landscapes. There is a growing interest to how incentives can be designed to encourage the results of measures on arable land rather than the measures per se. By allowing flexibility in how to achieve the result, and setting a price on the desired environmental outcome instead of compensating farmers’ opportunity costs, farmers are encouraged to exploit their comparative advantages for provisioning environmental values.
An increasing number of empirical studies suggest that agricultural remuneration schemes to preserve biodiversity are more effective and cost-efficient when the remuneration is result-based. Yet there are very few studies of result-oriented schemes with the intention to reduce agricultural pollution. In the meanwhile, there is an urgent need for effective measures and working incentives to reduce the nutrient pollution from arable land to meet environmental goals of reducing eutrophication in lakes, rivers and coastal areas.
In this study I design a result-oriented remuneration scheme for pollution abatement from arable land. The scheme was tested in a case study where vegetated buffer strips were used to abate the pollutant particulate phosphorus (PP) from reaching watercourses and water bodies on a farm in southern Sweden. The scheme succeeded in abating PP much more cost-efficiently compared to a conventional action-oriented scheme.
The results showed that when remunerating the vegetated buffer strips differently depending on their effect, farmers maximize their profit by allocating them where the abatement potential was the largest compared to opportunity costs. By using modeling to estimate where and in what extent pollution occurs, and the effect of counteracting measures, this study proves that result-oriented remuneration schemes are possible to use to abate diffuse pollution from arable land and have the capacity to do so cost-efficiently.
Contact details and more information William Sidemo Holm
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