Environmental and Resource Economics

, Volume 69, Issue 1, pp 1–21 | Cite as

Impact of Spatial Differentiation of Nitrogen Taxes on French Farms’ Compliance Costs

  • Anna LungarskaEmail author
  • Pierre-Alain Jayet


The spatial differentiation of input-based pollution fees should in theory decrease compliance costs in the case of nitrate pollution of water bodies from agriculture because both the damage and the compliance costs vary over space. However, the empirical evidence in the literature does not agree on the extent of the potential savings from differentiation. We address this issue in the case of France, using a mathematical programming model of agricultural supply (AROPAj). The modeling approach used accounts for the spatial diversity of nitrate pollution and the heterogeneity of farming systems. Our results reveal the efficiency gains from differentiating pollution fees among polluters and water bodies. For instance, firm-specific and water body-specific taxes represent respectively 5.8 and 32.5 % of farmers’ gross margin in terms of compliance costs, whereas a uniform policy at the river-basin district or national level leads to major economic losses and abandonment of the agricultural activity. These results stem from the lower tax rates faced by farmers in less polluted areas, for scenarios based on spatial differentiation. Our estimates suggest that realistic regulation via input-based pollution fees should be differentiated in order to significantly reduce the financial burden on farmers of conforming to predefined pollution levels. Some potential adverse effects related to input-based taxation and land use change call for additional fine-scale nitrogen pollution regulation (e.g. limitations on crop switching).


Fertilizer Livestock Nitrate Pollution Scale Tax Water 



European Union


Water Framework Directive






Nitrogen (N), Phosphorus (P) and Potassium (K)


Geographical Information Systems


River Basin District


Common Agricultural Policy


Nitrate Vulnerable Zone


Farm Accountancy Data Network












Rhône-Méditerranée et Corse


Single Payment Scheme


First Order Condition


Network Persistence and Development Index


Bureau de recherches géologiques et miniéres



We are thankful to the co-editor Céline Nauges and the anonymous reviewers for their extremely useful comments, which have greatly contributed to the revised version of the manuscript. We would also like to thank Cyril Bourgeois and Athanasios Petsakos for their valuable help. Anna Lungarska acknowledges funding from French National Research Agency (ANR) under the ORACLE project (ANR-10-CEPL-011) and from the PIREN-Seine research program.


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Copyright information

© Springer Science+Business Media Dordrecht 2016

Authors and Affiliations

  1. 1.Economie Publique, INRA, AgroparistechUniversité Paris-SaclayThiverval-GrignonFrance

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