Guidelines for Cost-effective Agri-environmental Policy Measures

image of Guidelines for Cost-effective Agri-environmental Policy Measures

Improving the environmental performance of agriculture is a high priority in OECD and many non-OECD countries. This will be of increasing concern in the future given the pressure to feed a growing world population with scarce land and water resources. Policy has an important role to play where markets for many of the environmental outcomes from agriculture are absent or poorly functioning.   

This study focuses on the design and implementation of environmental standards and regulations, taxes, payments and tradable permit schemes to address agri-environmental issues. It deals with the choice of policy instruments and the design of specific instruments, with the aim of identifying those that are most cost-effective in very different situations across OECD countries.  

Key conclusions from the study are that: there is no unique instrument that promises to achieve all agri-environmental policy goals; the cost effectiveness of payments systems could be improved by using performance-based measures; and policy mixes need to combine policy instruments that complement and not conflict with each other.

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Executive Summary

The aim of the Guidelines study is to help policy makers with additional tools to design and implement cost-effective agri-environmental policies. It focuses on environmental standards, environmental taxes, agrienvironmental payments and tradeable permit schemes to address agrienvironmental concerns (externalities). It is important to note that the goal of this study is not to promote any specific policy instrument or instrumentmix in any OECD country but to improve understanding of how different types of policy instruments can be used, in what context, and which key design and implementation issues need to be considered for the success of a given instrument.

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