Inderscience Publishers

Efficiency and innovation offsets in non-point source pollution control and the role of education

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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).

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

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