Journal #J-06/1999
Theoretical Considerations Regarding Environmental Indicators
Eirik Romstad
Department of Economics & Reesource Management Agricultural University of Norway PO Box 5033, N-1432 Ås, Norway http://www.nlh.no/ior/ e-mail: eirik.romstad@ior.nlh.no

Romstad, E. (1999): "Theoretical Considerations Regarding Environmental Indicators", pp. 13-23 in Brouwer, F.M. & B. Crabtree (eds.), Environmental Indicators and Agricultural Policy, CAB International, Oxon, UK.

Abstract:
Indicators may be viewed as highly targeted information on the state of the environment, hence reducing the marginal costs of information gathering. The optimal amount of information to collect is where the expected marginal costs of obtaining additional information equal its expected marginal benefits. The quality and applicability of the information collected is therefore important.
This paper (i) reviews the theoretical foundation for what constitutes good environmental indicators, and (ii) based on the theoretical foundation, identifies possible implications for using environmental indicators on environmental problems in/from agriculture. Criteria for good indicators include consistency, reliability, predictive capacity and benefit/cost measures. The paper discusses the principles of applying indicators in light of the type of environmental damage(s) caused by agriculture. Two contrasting examples are given: ambient water quality and farm gate nutrient balances.

Key words: Indicators, agriculture, ambient water quality, farm gate nutrient balances.

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