Keywords: nonpoint source pollution, agricultural extension, Porter hypothesis, environmental indicators, innovation, pesticides, genetically modified cotton, GM cotton, directional distance function, data envelopment analysis, DEA, agriculture, pollution control, education, environmentally friendly farming
Efficiency and innovation offsets in non-point source pollution control and the role of education
This paper discusses and empirically analyses the implications of efficiency and innovation offsets for the management of non-point source pollution from agriculture. If efficiency improvements and green innovation indeed combine environmental advantages with economic advantages, these offsets would offer a free lunch adjustment to environmental regulations. A theoretical model of the farm is developed where pollution is a joint output of production, where inefficiency in production prevails and environmental innovations are available. We discuss whether education about environmentally friendlier farming practices is effective in such a context. The empirical analysis addresses pesticide use in conventional and genetically modified cotton production in North Carolina, USA. The conceptual model was implemented by means of the non-parametric directional distance function approach in Data Envelopment Analysis (DEA).