Public Goods and Externalities

Public Goods and Externalities

Agri-environmental Policy Measures in Selected OECD Countries You do not have access to this content

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Author(s):
OECD
26 Aug 2015
Pages:
104
ISBN:
9789264239821 (PDF) ;9789264239791(print)
http://dx.doi.org/10.1787/9789264239821-en

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Agriculture is a provider of commodities such as food, feed, fibre and fuel, and it can bring both positive and negative impacts on the environment. Yet most policy measures target farm systems, inputs and practices and agricultural infrastructure (driving forces) rather than the provision of agri-environmental public goods (environmental outcomes).

This report analyses how a handful of OECD countries (Australia, Canada, Japan, United Kingdom and the United States) defines agri-environmental public goods and sets agri-environmental targets and reference levels, and the policies they implement for targeting certain agri-environmental public goods.

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  • Foreword

    Agriculture is a provider of commodities such as food, feed, fibre and fuel and, it can also bring both positive and negative impacts on the environment such as biodiversity, water and soil quality. These environmental externalities from agricultural activities may have characteristics of non-rivalry and nonexcludability. When they have such characteristics, they are defined as agri-environmental public goods. Agri-environmental public goods need not necessarily be desirable; that is, they may cause harm and can be defined as agri-environmental "public bads".

  • Executive summary

    This book aims to improve an understanding of the best policy measures to provide agrienvironmental public goods and reduce agri-environmental public bads by looking at the experiences of five OECD countries: Australia, Japan, the Netherlands, the United Kingdom and the United States. A number of questions will be addressed, including: How do these countries define agri-environmental public goods? How do they set agri-environmental targets and reference levels? Which policies do they implement and for which agri-environmental public goods?

  • Agri-Environmental public goods and externalities

    This introductory chapter presents the key questions on which this report focuses, and the methodology used to analyse agri-environmental public goods and externalities. It then explains the theoretical background behind the analysis of agri-environmental public goods. This book defines agri-environmental public goods as those environmental externalities from agricultural activities that have the characteristics of non-excludability and non-rivalry.

  • Main agri-environmental public goods and their provision through farmning practice

    This chapter examines how countries variously define agri-environmental public goods and how this affects the choice of policies that target these public goods. It also examines how agri-environmental public goods are provided by farmers. Various driving forces (farm systems, farming practices, farm inputs and agricultural infrastructure) affect environmental outcomes (the provision of agri-environmental public goods). Some farming practices and policy measures bring both positive and negative impacts on the agri-environmental public goods in a different way and degree. This chapter shows the importance of how a better understanding of agriculture can provide agri-environmental public goods.

  • Market failure associated with agri-environmental public goods

    This chapter analyses how countries estimate demand and supply of agri-environmental public goods, and how they examine whether market failures associated with the agrienvironmental public goods exist. It discusses the importance of identifying the extent farmers can voluntarily provide agri-environmental public goods without government intervention.

  • Environmental targets and reference levels

    This chapter discusses who should bear the costs of providing agri-environmental public goods, and how countries set agri-environmental targets and reference levels. Environmental targets are defined as desired (voluntary) levels of environmental quality that go beyond the minimum requirements or minimum (mandatory) levels of environmental quality for the agricultural sector. Reference levels are defined as the minimum level of environmental quality that farmers are obliged to provide at their own expense. They define the benchmark between avoidance of negative effects and the provisions of positive ones. This chapter presents several examples of environmental targets and reference levels.

  • Policy measures for the delivery of agri-environmental public goods

    This chapter analyses the policies implemented to provide agri-environmental public goods and which agri-environmental public goods they target. Many policy measures target multiple agri-environmental public goods, and each agri-environmental public good is targeted by multiple policy measures. However, it is not always clear to what extent a particular policy measure tries to address agri-environmental issues, and the extent to which other policy measures do so. It therefore discusses the importance to target factors that affect the provision of agri-environmental public goods to improve the cost-effectiveness of policy measures.

  • Policy implications for the provision of agri-environmental goods

    This chapter presents the conclusions and policy implications of agri-environmental measures in the selected OECD countries of this study: Australia, Japan, the Netherlands, the United Kingdom and the United States.

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