Papers by Author: Sheng Ji Luan

Abstract: Environmental tax is a popular economic instrument dealing with nonpoint pollution. However, the differences between China and western countries cause it is not proper to apply in China. The fertilizer demand price elasticity is -0.345. The low elasticity suggests that the tax will have little effect on chemical use reduction. Moreover, in order to guarantee food security, Chinese government provides many subsidies to encourage farmers to continue their agricultural practices. Those subsidies also contribute to impair the effectiveness of the tax. Additionally, considering the weak role of farmers in current China society, it is difficult for the tax instrument to get its political legitimacy for the potential conflict on social equity. Other economic tools like payments should be taken into consideration when tackling agricultural nonpoint pollution.