Environmental Engineering Reference
In-Depth Information
Negative jointness (Fig.
2.1c
) is associated with an agricultural modernisation
agenda where non-commodity outputs are secondary considerations compared to
agricultural production (Belletti et al.
2003)
; in the context of EU agriculture this
could tally with the historical emphasis on supporting agricultural production through
price support measures. However, in the case of negative jointness the production of
a commodity output, forsaking a given amount of the non-commodity output could
illustrate (a) the existence of a negative externality i.e. the non-commodity output is
a non-market good which is not internalised in production decisions, (b) the non-
commodity output is wholly or partially internalised by the market but its marginal
value is lower than the commodity output resulting in a rational trade-off. Determining
the optimal production of the commodity output versus the non-commodity output
where the latter is an externality requires some assessment of the value of the non-
commodity output, perhaps using a 'stated preference' valuation technique like sur-
veying individuals to determine their willingness to pay for the non-commodity
output. The case of positive and negative jointness (Fig.
2.1d
) has been articulated
graphically in OECD
(2001b)
. Going further, we can note that if the marginal value
of the commodity and non commodity output are equal then the optimal solution is
the turning point of the function. Mathematically:
dNCO
(
)
= +−
a
2c*CO
=
0
dCO
−
=
−
a
CO
2c
2
d NCO
=−
2c
dCO
2
(2.1)
In the case of negative to positive jointness (Fig.
2.1e
) dual maximisation of com-
modity and non-commodity outputs is only a viable option if the reductions in
non-commodity output at low levels of commodity output, before the turning point
is reached and both outputs start to rise together, is not associated with the breach-
ing of any ecological thresholds i.e. we need a priori knowledge that environmental
degradation and pollution are occurring in a linear fashion. In reality, many impor-
tant environmental non-commodity outputs have critical ranges and thresholds
which, if breached, could result in drastic and uncontrollable loss of that non-
commodity output and thus, potentially, the commodity depending on the interac-
tion between the two outputs (Fig.
2.1f
).
An
ex-post
empirical investigation of the magnitudes of non-commodity outputs at
different levels of commodity output could elucidate a number of relationships; from
an
ex-ante
perspective it is important to understand whether a particular policy will:
-
Shift the commodity/non-commodity relationship from one trajectory to another
(alter the underlying functional form of the relationship) e.g. from negative
jointness (Fig.
2.1c
) to positive jointness (Fig.
2.1a
)
