Harmonizing economic and environmental costs in the CAP to improve efficiency and effectiveness of policies

Abstract

The recent CAP aims at better targeting beneficiaries and being more selective in its objectives. This has drawn attention to how policies interact with resources used by farms in terms of both economic and environmental costs. Conditional Process Models under Structural Equation Modeling framework may offer statistical indications on these complex interactions. The proposed model, called SMIRNE, is applied to an Italian macro-area at severe risk of land pollution (Pianura Padana) caused by livestock sector. Results show a more substantial support from pillar I policies than those provided by pillar II in addressing a relevant response of policies to the economic and environmental costs of the livestock activities with reference to the use of land.