A Self-Enforcing Cooperative Agreement for Nonpoint Source Pollution Abatement

In this paper we propose a scheme to control non-point source water pollution that employs subsidies to foster voluntary cooperation among farmers and, in that respect, is aligned with the traditional reliance in US water quality policy on voluntary programs aimed at persuading farmers to use environmentally friendly practices designed to improve water quality (Segerson and Wu, 2006). Unlike other voluntary programs, however, the approach proposed here is incentive-compatible so that compliance with cooperative agreements to abate is the optimal strategy for those who enter voluntarily into them.