Institutional analysis for nitrogen pollution abatement in a Waikato river sub-catchment in New Zealand
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Nitrogen levels in water resources in the Waikato region are increasing, mainly as a result
of non-point source pollution from agricultural activities. Non-point pollution
management is a complex issue requiring sufficient information and appropriate
institutions. This paper considers the environmental policy literature and analyse how
institutions, contract design, and monitoring and transaction costs in the presence of farm
heterogeneity encourage optimal abatement. The analysis identifies the key institutional
issues to be addressed in the design of appropriate policy measures to address water
quality in Waikato river sub-catchment.