Estimating the Marginal Social Value of Agriculturally Driven Nitrate Concentrations in an Aquifer: A Combined Theoretical-Applied Approach

Abstract

International audienceWe combine a theoretical model and a quantitative modeling chain based on a bio-economic model and a hydrological model in order to assess the marginal damage related to the nitrate concentration in an aquifer. The fundamental concept is to take the steady state level resulting from a social planner’s optimization program as the target level of nitrate concentration. The interest of doing this is three-fold: (i) we characterize the social value ofdamage related to the targeted nitrate concentration; which (ii) leads us to design the optimal path consistent with the target; and (iii) we can in turn assess welfare losses arising when the tax path deviates from the optimal one