Showing posts from April, 2013

How farmers could benefit from fertilizer taxes

Some of the worst water quality problems result from nutrient leaching and runoff from agricultural lands.  Nitrogen and phosphorus applied to cropland and not absorbed by crops in the process of photosynthesis will, one way or another, one day or another, end up in the water.  The same goes for animal waste. The nutrients cause algae blooms, reduced concentrations of dissolved oxygen, and diminished fisheries and ecosystem health (called eutrophication).  While there has been some effort to deal with these problems, I know of no great success stories, and water quality continues to decline in the Mississippi, the Gulf of Mexico, and the Chesapeake, the Great Lakes, and countless other water bodies. One obvious remedy would be to tax fertilizer.  This would be a nearly Pigouvian solution.  Better would be to tax runoff and leaching directly, but that’s basically impossible for practical reasons. The obvious but rarely stated problem is that it would probably r