An Analysis of Non-Point Source Water Pollution in China and the Economic Policies for Combatting Non-point Source Water Pollution
This study explores the incentive instrument to avoid overuse of nitrogen. Overuse of nitrogen, typically in the form of fertilizers and pesticides, causes Non-point source pollution (NPS). This study therefore attempts to identify and discusswhat the mechanism and reasonthat results in this nitrogen over-use. It also assesses how to introduce market tools that would provide the right incentives to stop its overuse. Thepaper compares thecurrent water pollution management systemsin the Chesapeake Bay, USA,where payments forcapital costsat the farmandabatement programsof agricultural measureshave been undertaken, with the current systemsof Dianchi LakeinChina. The methodology used involves a comprehensivereview ofthe relevantdefinitions of terms used in Payment for Ecosystem Services (PES) by theChineseand the international community.It discusses implementation of PES for managing farmers’ use of fertilizer in China, and includesthe steps neededto determine appropriate compensation levels in these PES systems. The analysis uses interviews conducted with farmers in Yunnan Province and an economic analysis of current subsidy policies, taxes, and grants used domestically and internationally to determine the best PES measures needed The findings suggest that one of the mainways to reduce the overuseof nitrogen and thusreduce run-off pollution (NPS) isto change the current Chinesesubsidy programsby creating new directsubsidies that will promote and rewardbehavior change. This will give incentives to farmers to curb their overuse of chemical fertilizers.
