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The Economics of Dead Zones: Causes, Impacts, Policy Challenges, and a Model of the Gulf of Mexico Hypoxic Zone

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  • S. S. Rabotyagov
  • C. L. Kling
  • P. W. Gassman
  • N. N. Rabalais
  • R. E. Turner

Abstract

This article reviews and analyzes the issues related to worldwide hypoxic zones and the range of economic questions sorely in need of answers. We begin by describing the extent and causes of hypoxic zones worldwide, followed by a review of the evidence concerning ecological effects of hypoxic zones and their impacts on ecosystem services. We describe what is known about abatement options and cost-effective policy design, and then focus on the large seasonally recurring hypoxic zone in the Gulf of Mexico. We offer a simple econometric model to estimate the relationship between pollutants (nutrients) and the size of the hypoxic zone. This "production function" relationship suggests that both instantaneous and historical nutrient contributions affect the size of the zone. Our results support concerns that ecologists have raised about lags in the recovery of the ecosystem and confirm the importance of multiple nutrients as target pollutants. We conclude with a discussion of the types of research and cooperation across disciplines that are needed to support the development of policies to address this important ecological and economic issue. (JEL: Q51, Q52, Q57, B4) Copyright 2014, Oxford University Press.

Suggested Citation

  • S. S. Rabotyagov & C. L. Kling & P. W. Gassman & N. N. Rabalais & R. E. Turner, 2014. "The Economics of Dead Zones: Causes, Impacts, Policy Challenges, and a Model of the Gulf of Mexico Hypoxic Zone," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(1), pages 58-79, January.
    • Handle: RePEc:oup:renvpo:v:8:y:2014:i:1:p:58-79
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    Cited by:

    1. Upadhaya, Suraj & Arbuckle, J. Gordon & Schulte, Lisa A., 2021. "Developing farmer typologies to inform conservation outreach in agricultural landscapes," Land Use Policy, Elsevier, vol. 101(C).
    2. Weng, Weizhe & Cobourn, Kelly M. & Kemanian, Armen R. & Boyle, Kevin J. & Shi, Yuning & Stachelek, Joseph & White, Charles, 2020. "Quantifying Co-Benefits of Water Quality Policies: An Integrated Assessment Model of Nitrogen Management," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304667, Agricultural and Applied Economics Association.
    3. Catherine L. Kling & Yiannis Panagopoulos & Sergey S. Rabotyagov & Adriana M. Valcu & Philip W. Gassman & Todd Campbell & Michael J. White & Jeffrey G. Arnold & Raghavan Srinivasan & Manoj K. Jha & Je, 2014. "LUMINATE: linking agricultural land use, local water quality and Gulf of Mexico hypoxia," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 41(3), pages 431-459.
    4. Upadhaya, Suraj & G. Arbuckle, J. & Schulte, Lisa A., 2023. "Farmer typologies integrating latent and observed characteristics: Insights for soil and water conservation outreach," Land Use Policy, Elsevier, vol. 134(C).
    5. Jayash Paudel & Christine L. Crago, 2021. "Environmental Externalities from Agriculture: Evidence from Water Quality in the United States," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(1), pages 185-210, January.
    6. Yau-Huo Shr & Wendong Zhang, 2021. "Does Omitting Downstream Water Quality Change the Economic Benefits of Nutrient Reduction? Evidence from a Discrete Choice Experiment," Center for Agricultural and Rural Development (CARD) Publications 21-wp620, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    7. Pérez-Gutiérrez, Juan D. & Paz, Joel O. & Tagert, Mary Love M. & Sepehrifar, Mohammad, 2020. "Impact of rainfall characteristics on the NO3 – N concentration in a tailwater recovery ditch," Agricultural Water Management, Elsevier, vol. 233(C).
    8. Charles A. Taylor & Geoffrey Heal, 2021. "Fertilizer and Algal Blooms: A Satellite Approach to Assessing Water Quality," NBER Chapters, in: Risks in Agricultural Supply Chains, National Bureau of Economic Research, Inc.
    9. Ahlvik, Lassi & Iho, Antti, 2018. "Optimal geoengineering experiments," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 148-168.
    10. Catherine L. Kling & Yiannis Panagopoulos & Adriana Valcu-Lisman & Philip W. Gassman & Sergey Rabotyagov & Todd Campbell & Mike White & Jeffrey G. Arnold & Raghavan Srinivasan & Manoj Jha & Jeff Richa, 2014. "Land Use Model Integrating Agriculture and the Environment (LUMINATE): Linkages between Agricultural Land Use, Local Water Quality and Hypoxic Concerns in the Gulf of Mexico Basin," Center for Agricultural and Rural Development (CARD) Publications 14-wp546, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    11. Kuwayama, Yusuke & Olmstead, Sheila & Zheng, Jiameng, 2022. "A more comprehensive estimate of the value of water quality," Journal of Public Economics, Elsevier, vol. 207(C).
    12. Shr, Yau-Huo Jimmy & Zhang, Wendong, 2021. "Does Omitting Downstream Water Quality Change the Economic Benefits of Nutrient Reduction Programs: Evidence from a Discrete Choice Experiment," 2021 Annual Meeting, August 1-3, Austin, Texas 313927, Agricultural and Applied Economics Association.
    13. Whittaker, Gerald & Färe, Rolf & Grosskopf, Shawna & Barnhart, Bradley & Bostian, Moriah & Mueller-Warrant, George & Griffith, Stephen, 2017. "Spatial targeting of agri-environmental policy using bilevel evolutionary optimization," Omega, Elsevier, vol. 66(PA), pages 15-27.
    14. Agarwal, Sandip & Jacobs, Keri L. & Weninger, Quinn, 2016. "Unfolding the Bias in Farm Nitrogen Management," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 237380, Agricultural and Applied Economics Association.
    15. Meyer, Kevin Michael, 2017. "Three essays on environmental and resource economics," ISU General Staff Papers 201701010800006585, Iowa State University, Department of Economics.
    16. Glauber, Joseph W. & Effland, Anne, 2016. "United States agricultural policy: Its evolution and impact:," IFPRI discussion papers 1543, International Food Policy Research Institute (IFPRI).
    17. Hansen, LeRoy & Hellerstein, Daniel & Ribaudo, Marc & Williamson, James & Nulph, David & Loesch, Charles & Crumpton, William, 2015. "Targeting Investments To Cost Effectively Restore and Protect Wetland Ecosystems: Some Economic Insights," Economic Research Report 199283, United States Department of Agriculture, Economic Research Service.

    More about this item

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology

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