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Prevention versus Treatment under Precautionary Regulation: A Case Study of Groundwater Contamination under Uncertainty
Author(s) -
Lichtenberg Erik,
Penn Tony M.
Publication year - 2003
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/1467-8276.t01-2-00102
Subject(s) - groundwater contamination , groundwater , precautionary principle , natural resource economics , agriculture , environmental science , water resource management , economics , aquifer , geography , ecology , geotechnical engineering , biology , engineering , archaeology
Abstract Policy discussions on agricultural pollution problems characterize prevention as more cost effective and precautionary than ex post treatment. We derive conditions under which treatment alone is more cost effective in situations involving multiple sources of emissions, multiple sites affected, and a commonly used precautionary approach to uncertainty. We also show that a greater degree of precaution can result in less reliance on prevention. An empirical case study indicates that treatment alone is the most cost‐effective means of dealing with nitrate in most Maryland community water system wells. The use of leaching prevention measures is restricted to the most intensive poultry producing areas. The incremental cost of precaution is substantial.