Can taxes and targeted subsidies be effective in limiting the use of pesticides in viticulture?
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The aim of this study is to assess whether market-based instruments of agri-environmental policy such as taxes and subsidies can promote reduced pesticide use in viticulture. Simulations are carried out using VINEPA, a multi-periodic discrete stochastic programming (DSP) model based on panel data from vineyards. We then evaluate how changes in pesticide use would affect the Environment Impact Quotient (EIQ), which evaluates potential impacts of pesticides on farm workers, consumers, and non-target organisms. The results show that reducing their use calls for high tax rates, and EIQ can only be reduced by setting taxes based on levels of toxicity.