Original Post by Ben Short:
As you mentioned that Dr. Stiglitz pointed out, it takes the collective to truly protect the environment, which is why command and control policies can be so effective in agriculture. One reason command and control policies is the right approach is because farmers are in a peculiar situation as there is no price associated with environment or human health costs right now, so these farmers are technically incentivized to ignore proper management techniques (Weersink 2020). So command and control policies are critical to ensuring a shift in management practices and production standards.
I recently did some research around regenerative agriculture in the United States, and the FSA (Farm Service Agency) has an incentive program that could potentially go in conjunction with command and control policies. The Conservation Reserve Program pays farmers a yearly sum to essentially protect sensitive land (think farming land right next to a waterway that leads to critical bodies of water) by not using it for production purposes, and to also plant species of crops that are beneficial to the regions environment (USDA 2020). The point of this is to reduce runoff into waterways by limiting soil erosion and avoiding nutrients like phosphorous and nitrogen to runoff of the lands. While this incentive has seen some success, the fact that it was introduced by Reagan in 1985 and we have not seen the large scale transition to this type of agriculture, speaks to your point Zoe that command and control policies are the appropriate way to achieve the desired outcome. Moreover, a nation like Thailand may not have the financial capability to provide these incentives.
I was interested to read about Thailand’s HSA policy. I would agree that the act is certainly flawed in that the chemicals are not regulated after the point of sale. It reminds me slightly of the United States policy around chemical substances in the marketplace. A huge problem with the Toxic Substance Control Act (TSCA) is that it is retroactive in nature. That is, these chemicals were not required to be tested prior to entering U.S. markets. In 2016, TSCA was amended, however an article I found from experts from the University of Michigan and University of California San Francisco, highlight continued flaws in the act. The amendment involves that the EPA assesses the risk for “susceptible and highly exposed populations,” but the authors state that the EPA has not been able to properly assess the risk for these populations based off their first 10 chemical assessments (Koman, 2019). Their claim is that the EPA is not fully utilizing scientific information in regards to vulnerable populations. Which, if true, is certainly concerning, particularly that the amendments have also, “left key details of the amendment to the current administration” – which adds to the concern if you look at the number of environmentally friendly rollbacks have occurred under this administration.
It is interesting to me that there is not an international standard on regulating chemicals, especially, as you pointed out, due to the fact that a country like Thailand relies so heavily on importation. For instance, the EU has a much stricter policy on chemicals in the market place then Thailand or the United States and has been more successful in limiting the amount of dangerous substances in the marketplace. Moreover, by enforcing strict command and control policies on chemical substances in the market place, it will also encourage a shift on the consumer end to begin purchasing these products.
References:
Forest Service Agency. 2020. “Conservation Reserve Program” United States Department of Agriculture. Accessed June 24, 2020. https://www.fsa.usda.gov/programs-and-services/conservation-programs/conservation-reserve-program/index (Links to an external site.)
Koman, Patricia. 2019. “EPA Needs to Keep up With Science, Do More to Protect Vulnerable Populations.” University of Michigan, School of Public Health. https://sph.umich.edu/news/2019posts/epa-needs-to-keep-up-with-science-do-more-to-protect-vulnerable-populations.html (Links to an external site.)
(Links to an external site.)
Weersink, Alfons, John Livernois, Jason F. Shogren, and James S. Shortle. “Economic Instruments and Environmental Policy in Agriculture.” Canadian Public Policy. 24, no. 3 (1998): 309-27. Accessed June 24, 2020. doi:10.2307/3551971.
My Comment:
Thank you for bringing the Canadian Public Policy’s article into our discussion!
I definitely recommend creating economic instruments, also called incentive-based approaches, to instigate a farmer’s implementation of sustainable growing techniques. While the farmer is prioritizing the firm’s equity superior to social efficiency, the problem is the perception of the environmental and human health effects of pesticide use as external costs. It is crucial to show the cost is internal. Detrimental impacts on species diversity, landscape, as well as the quality of air and water occur on a farm’s site. Crucially, the on-farm effects are “usually associated with a reduction in farm productivity and a subsequent increase in production costs” (Weersink 2020). Evidence from methods such as PEA are enhanced with location-specific data showing farmers the financial logic to changing their methods.
Individuals install environmentally sustainable mechanisms because it is simply a cost-effective choice to support their loved ones. For example, as a residential solar panel system sales consultant, the majority of my clients would not move forward with the project unless it brought immediate savings. The equipment financing option makes it feasible. However, without the current 26% federal tax credit applied to a residential solar panel system’s total cost, many households would not necessarily see immediate cash flow savings. I purposely rearranged my powerpoint sales presentation to move the environmental benefits slide to the end because people can feel good about supporting nature’s course only after establishing its a decision bringing them financial security. Both the agricultural sector and solar industry show policymakers need to create programs to incentivize sustainable technological change. Doing so shows both farmers and all homeowners that supporting the environment is not always a sacrifice for social efficiency as it can enhance the firm’s equity, as well.
Economic instruments, such as pollution taxes or tradable permits, are now widely regarded by economists as being superior to command-and-control. The understanding is based on the following criteria: administrative costs, cost- effectiveness, monitoring and enforcement costs, incentives created for innovation, ecological effectiveness, and consistency with other government policies (Weersink 2020). Command-and-control requires policymakers to determine appropriate abatement technology options for all firms in a certain industry (Weersink 2020). Given the spatial heterogeneity of farms, successful policy is going to be a system of locally specified management incentives which entails individual operations selecting the most cost-effective abatement method. For example, incentives for low cost nutrient plans may be sufficient in some locations without heavy concentrations of livestock (Weersink 2020). Further, considering command-and-control is dependent on monitoring emissions, it is not a quality strategy in the case of non-point source pollution because it is difficult to trace the exact origin of the contaminant (Weersink 2020). Farmers can handle diffuse-source pollution problems using a variety of economic instruments. For example, vegetative cover and tillage practice as part of a cropping system can modify soil erosion levels while the timing, amount and placement of fertilizer can influence nutrient deposition (Weersink 2020). Table 1 illustrates specific conditions where certain economic instruments are optimally effective. Overall, economic instruments encourage firms with the lowest costs of pollution control to carry the rest of the team (Weersink 2020). As a result, economic instruments achieve benefits at the lowest possible aggregate cost.
I am interested in learning about the Conservation Reserve Program in further detail, specifically in terms of paying farmers to plant species of crops that are beneficial to the regions environment (USDA 2020). As Jenna mentioned, the strategy is realistic for the U.S. compared to other developing regions such as Thailand heavily reliant on rice. I visited Cambodia and experienced the emphasis on rice farming first-hand as “have you eaten rice yet” is a greeting phrase commonly replacing “how are you”. Anyways, just because a strategy did not function well during the Reagan era does not necessarily indicate it cannot be successfully revised. The socio-economic political climate drastically impacts a policy’s effectiveness.
On a different note, I found the discussion of the Toxic Substances Control Act (TSCA) intriguing. The FIFRA (Federal Insecticide Fungicide Rodenticide Act) provision permitting pesticides banned in the U.S. to be exported abroad is not smart considering the current global online marketplace. Creating the substance increases the risk pesticides are going to be sold back to U.S. consumers online. I also don’t agree with continuing to allow manufacturing and attempting to tighten sale regulation. A free market needs to have unrestricted decision-making once a product exists. As long as its financially incentivized and the substance still exists, people are still going to exchange it whether the distribution is legal or illegal. Further, products cannot be tested and tracked as accurately when they are internationally exchanged online. The U.S. has the greatest chance at prohibiting illegal pesticides from being re-imported after initial exportation if they just don’t originally allow them to be manufactured. Dear EPA, please address the problem at its source.
Resource:
Weersink, Alfons, John Livernois, Jason F. Shogren, and James S. Shortle. “Economic Instruments and Environmental Policy in Agriculture.” Canadian Public Policy. 24, no. 3 (1998): 309-27. Accessed June 24, 2020. doi:10.2307/3551971.
Comment by Professor Scott Thomas:
Mary,
Good point about the limits of a command and control approach.
If centralized management were highly efficient, then centrally managed economies would outperform market economies, however history is littered with the failures of centralized management (Soviet Union; other Eastern European communist nations; Venezuela; North Korea; in some aspects ancient Rome; certain dynasties in ancient China). I think the lesson is to use command and control as is necessary (and it is necessary), but not exclusively (or nearly so). My interpretation is that the more we can structure solutions to capitalize upon liberty and creativity, the better solutions we will have.
Comment by Natalia Sudyka:
Mary,
I appreciate you bringing regional approach to the discussion of managing a solution relying on incentives or cost-effective approaches to abatement methods. It is almost impossible to come up with a global policy on pesticides control because certain pesticide may work well in one area of the world, may not work the same under different conditions in another part of the world. Also, in certain instances the need for a pesticide in one area may not be needed. For example, the mosquito transmitting malaria where in Sri Lanka, a pesticide would be helpful, but in the US it would serve little to no purpose. Similar can be said about command and control methods for implementing emission based incentives, when to your point, those cannot be traced to an origin of contaminant and therefore would not necessarily serve a purpose in a global control method. Online sales poses several risks and threats, one of those being the sale of illegal pesticides. I find it harmful for the US to continue allowing production of and exportation of pesticides that are banned to be used domestically (EPA 2018). Exporting these substances not only has a way of entering the US through other means, but it also ignores global health concern and potentially is an ethics violation. The US exports more pesticides than any other country, and are significantly behind in production and export safety (Donley 2019). In short, the pesticides deemed illegal to use domestically should not be produced domestically.
References
Donley, Nathan. 2019. “The USA Lags Behind Other Agricultural Nations in Banning Harmful Pesticides.” Environmental Health, 18:44. June 7, 2019. https://ehjournal.biomedcentral.com/articles/10.1186/s12940-019-0488-0.
The United States Environmental Protection Agency (EPA). 2018. “Reference News Release: EPA Settles with Amazon for Distribution of Illegal Pesticides.” EPA.gov. Feb. 15, 2018. https://www.epa.gov/enforcement/reference-news-release-epa-settles-amazon-distributions-illegal-pesticides.