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Optimal management of a eutrophied coastal ecosystem: balancing agricultural and municipal abatement measures

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  • Marita Laukkanen
  • Anni Huhtala

Abstract

Agriculture and municipal wastewater are the principal sources of eutrophying nutrients in many water ecosystems. We develop a model which considers the characteristics of agricultural and municipal nutrient abatement. The model explicitly accounts for the investment needed to set up wastewater treatment facilities, and makes it possible to determine the optimal timing of investment as well as the optimal agricultural and municipal abatement levels. We apply the model to the Finnish coastal waters of the Gulf of Finland. Our results indicate that substantial savings in abatement costs and the damage associated with eutrophication could be obtained by constructing the facilities needed to process all the wastewaters entering the coastal ecosystem. The optimal timing of investment is shown to hinge on both the economic and ecological characteristics of the ecosystem.
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  • Marita Laukkanen & Anni Huhtala, 2008. "Optimal management of a eutrophied coastal ecosystem: balancing agricultural and municipal abatement measures," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 39(2), pages 139-159, February.
    • Handle: RePEc:kap:enreec:v:39:y:2008:i:2:p:139-159
    DOI: 10.1007/s10640-007-9099-2
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    2. Elofsson, Katarina, 2014. "International knowledge diffusion and its impact on the cost-effective clean-up of the Baltic Sea," Working Paper Series 2014:06, Swedish University of Agricultural Sciences, Department Economics.
    3. Hyytiainen, Kari & Ahtiainen, Heini & Heikkila, Jaakko & Helin, Janne & Huhtala, Anni & Iho, Antti & Koikkalainen, Kauko & Miettinen, Antti & Pouta, Eija & Vesterinen, Janne, 2009. "An integrated simulation model to evaluate national policies for the abatement of agricultural nutrients in the Baltic Sea," Discussion Papers 49896, MTT Agrifood Research Finland.
    4. Kari Hyytiäinen & Anni Huhtala, 2014. "Combating eutrophication in coastal areas at risk for oil spills," Annals of Operations Research, Springer, vol. 219(1), pages 101-121, August.
    5. Kari Hyytiäinen & Lassi Ahlvik & Heini Ahtiainen & Janne Artell & Anni Huhtala & Kim Dahlbo, 2015. "Policy Goals for Improved Water Quality in the Baltic Sea: When do the Benefits Outweigh the Costs?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 61(2), pages 217-241, June.
    6. Wang, Zhiyu, 2018. "Permit trading with flow pollution and stock pollution," Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 118-132.
    7. Elofsson, Katarina & Gren, Ing-Marie, 2014. "Cost-efficient climate policies for interdependent and uncertain carbon pools," Working Paper Series 2014:7, Swedish University of Agricultural Sciences, Department Economics.
    8. Fuentes, R. & Torregrosa-Martí, T. & Hernández-Sancho, F., 2017. "Productivity of wastewater treatment plants in the Valencia Region of Spain," Utilities Policy, Elsevier, vol. 46(C), pages 58-70.
    9. Ahlvik, Lassi & Hyytiäinen, Kari, 2015. "Value of adaptation in water protection — Economic impacts of uncertain climate change in the Baltic Sea," Ecological Economics, Elsevier, vol. 116(C), pages 231-240.
    10. Kuosmanen, Timo & Laukkanen, Marita, 2009. "(In)Efficient Management of Interacting Environmental Bads," Discussion Papers 54287, MTT Agrifood Research Finland.
    11. Doole, Graeme J., 2012. "Cost-effective policies for improving water quality by reducing nitrate emissions from diverse dairy farms: An abatement–cost perspective," Agricultural Water Management, Elsevier, vol. 104(C), pages 10-20.
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