Programme Poster session 2
Cost-effective abatement of water pollution from agricultural sources
classified in risk classes
Author(s): Tihomir Ancev, Robert Lifran, Nicholas Tan
Keyword(s): abatement, cost-effectiveness, water
Session: Poster session 2
Abstract Water pollution from agricultural sources is plagued with uncertainty of various proveniences. In the
face of this uncertainty, catchment management authorities in Australia and elsewhere have been recently attempting
to classify agricultural areas in their catchments in so called ‘risk classes’ according to their potential to contribute to
ambient water pollution. This classification is intended to be used to aid decision making in relation to allocating
financial assistance to supporting abatement.
The objective of the paper is to examine the
classification of agricultural areas in ‘risk classes’ from an economic perspective, and to explicitly establish the link
between the underlying uncertainty and ‘risk classes’. A specific objective is to determine the significance of the
classification in ‘risk classes’ for making decisions about allocating efficient level of abatement to agricultural areas in
the catchment. In particular, the principle of achieving most reduction of water pollution per monetary unit spend on
abatement is applied to the ‘risk classes’.
The paper uses analytical economic methods to
conceptualise the problem and to derive optimality conditions.
It is found that classification in risk
classes is nothing more than expressing the uncertainty about pollution loading parameter from given agricultural
areas in discrete groups of expected realisations. Further, this classification tends to imply that priority should be
given to abatement efforts in areas classified as high-risk. The paper shows that this is not the case, and that
abatement should be prioritised according to the cost-effectiveness criterion.
conclusion from the paper is that financial assistance for abatement should be offered to those agricultural areas
where greatest expected reduction of ambient water pollution can be achieved at least-cost. Those agricultural areas
are not necessarily coinciding with the agricultural areas classified into ‘high risk classes’.
WATER AVAILABILITY, USE AND MANAGEMENT
quality management: surface and ground water
WATER CONSERVATION AND DEMAND
Economic instruments and water pricing