Projects Funded for James Sallee


Evaluating Optimal and Second-Best Nitrogen Regulations in California

  • Connor Jackson
  • James Sallee


An Optimal Tax Approach to Policy Problems in California Agriculture

  • James Sallee


Specific Objectives of the Project:
The aim of this project is to apply a particular set of economic tools to analyze policies aimed at mitigating externalities from agriculture, using data from California.

Project Report/Summary of Results:
The goal of this project is applying the tools of public finance to evaluate policies aimed at mitigating externalities from California agriculture. The research team studied several possible applications and settled on the use of digesters to mitigate methane emissions from dairies. The team assembled data on the cost and location of all digesters in the state and used those data to estimate mitigation costs per ton of emissions. These costs vary substantially due to economies of scale and agglomeration effects, because cost depends on the proximity of each dairy to existing natural gas infrastructure and other dairies.

Given this distribution of costs, we can characterize the efficiency and distributional consequences of different regulatory policies (e.g., digester mandates versus digester subsidies versus a renewable natural gas feed-in tariff versus a tax on emissions or dairy products). In addition, we have identified direct measures of methane emissions tied to individual dairies from remotely sensed data collected by NASA’s Jet Propulsion Laboratory that provide a check on our modeled mitigation potentials.