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Subsidies! The Other Incentive-Based Instrument: The Case of the Conservation Reserve Program
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Subsidies! The Other Incentive-Based Instrument: The Case of the Conservation Reserve Program

Hongli Feng, Catherine Kling, Lyubov Kurkalova and Silvia Secchi
Moving to Markets in Environmental Regulation: Lessons from Twenty Years of Experience, pp.230-249
Oxford University Press
2006
DOI: 10.1093/acprof:oso/9780195189650.003.0009

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Abstract

This essay studies a very large and important example of an environmental subsidy program — the Conservation Reserve Program (CRP). The CRP was introduced in 1985. It investigates how much less efficient, if any, a command-and-control (CAC) form of regulation would have been. That is, it seeks to assess the policy as implemented relative to a fundamentally different form of regulation — CAC. It then studies the ex post performance of this incentive-based instrument. In so doing, it provides information on the degree to which market-based incentive programs, as they have actually been implemented, have or have not lived up to the original optimism with which economists viewed such instruments.
environmental subsidy program environmental policy market-based incentive programs command and control policy

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