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General equilibrium modelling of the direct and indirect economic impacts of water quality improvements in the Netherlands at national and river basin scale

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  • Brouwer, Roy
  • Hofkes, Marjan
  • Linderhof, Vincent

Abstract

The main objective of the study presented in this paper is to estimate the direct and indirect economic impacts of water quality policy scenarios in the Netherlands focusing on the reduction of emission levels of nutrients and a number of eco-toxicological substances. For this purpose, an Applied General Equilibrium (AGE) model consisting of 27 production sectors is extended to water through the inclusion of substitution elasticities between labour, capital and emissions to water in the sectors' production functions. The macro-economic costs of a 10, 20 and 50% reduction of the emission levels in the year 2000 of ten priority substances in the EU Water Framework Directive vary between 0.2 and 9.4% of Net National Income (NNI). A large share of the total economic costs are borne by important sources of pollution like commercial shipping, the chemical and metal industry. However, important spin-off effects due to adaptation take place in the tertiary service sector. Besides the estimation of the economy-wide impacts of water quality improvements, the novelty of the study presented here is found in the downscaling of national and sector results to river basin level and the estimation of shadow prices for water-polluting substances through the introduction of an emission permits market.

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  • Brouwer, Roy & Hofkes, Marjan & Linderhof, Vincent, 2008. "General equilibrium modelling of the direct and indirect economic impacts of water quality improvements in the Netherlands at national and river basin scale," Ecological Economics, Elsevier, vol. 66(1), pages 127-140, May.
  • Handle: RePEc:eee:ecolec:v:66:y:2008:i:1:p:127-140
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    1. Ing-Marie Gren & Paul Jannke & Katarina Elofsson, 1997. "Cost-Effective Nutrient Reductions to the Baltic Sea," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 10(4), pages 341-362, December.
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    4. Bonham, John G. & Bosch, Darrell J. & Pease, James W., 2006. "Cost-Effectiveness of Nutrient Management and Buffers: Comparisons of Two Spatial Scenarios," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(01), April.
    5. Tao Wang, 2006. "Cost Effectiveness in River Management: Evaluation of Integrated River Policy System in Tidal Ouse," Working Papers 2006.142, Fondazione Eni Enrico Mattei.
    6. Okadera, Tomohiro & Watanabe, Masataka & Xu, Kaiqin, 2006. "Analysis of water demand and water pollutant discharge using a regional input-output table: An application to the City of Chongqing, upstream of the Three Gorges Dam in China," Ecological Economics, Elsevier, vol. 58(2), pages 221-237, June.
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    Cited by:

    1. O'Donoghue, Cathal & Buckley, Cathal & Chyzheuskaya, Aksana & Grealis, Eoin & Green, Stuart & Howley, Peter & Hynes, Stephen & Upton, Vincent, 2015. "The Spatial Impact of Economic Change on RiverWater Quality 1991-2010," 150th Seminar, October 22-23, 2015, Edinburgh, Scotland 212665, European Association of Agricultural Economists.
    2. Halkos, George, 2013. "Cost-effectiveness analysis in reducing nutrient loading in Baltic and Black Seas: A review," MPRA Paper 52296, University Library of Munich, Germany.
    3. Petra Kuhr & Josef Haider & Peter Kreins & Ralf Kunkel & Björn Tetzlaff & Harry Vereecken & Frank Wendland, 2013. "Model Based Assessment of Nitrate Pollution of Water Resources on a Federal State Level for the Dimensioning of Agro-environmental Reduction Strategies," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(3), pages 885-909, February.
    4. François DESTANDAU & Anne ROZAN & Sandrine SPAETER, 2014. "Supra-Regional vs. Regional Regulators in the Water Pollution Mitigation: Optimal Exemption Policies," Working Papers of BETA 2014-09, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    5. Jason F. L. Koopman & Onno Kuik & Richard S. J. Tol & Roy Brouwer, 2017. "The potential of water markets to allocate water between industry, agriculture, and public water utilities as an adaptation mechanism to climate change," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(2), pages 325-347, February.
    6. Cyril Bourgeois & Pierre-Alain Jayet & Florence Habets & Pascal Viennot, 2018. "Estimating the Marginal Social Value of Agriculturally Driven Nitrate Concentrations in an Aquifer: A Combined Theoretical-Applied Approach," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 4(01), pages 1-30, January.
    7. Hirt, U. & Kreins, P. & Kuhn, U. & Mahnkopf, J. & Venohr, M. & Wendland, F., 2012. "Management options to reduce future nitrogen emissions into rivers: A case study of the Weser river basin, Germany," Agricultural Water Management, Elsevier, vol. 115(C), pages 118-131.
    8. Jacobsen, Lars-Bo & Nielsen, Max & Nielsen, Rasmus, 2016. "Gains of integrating sector-wise pollution regulation: The case of nitrogen in Danish crop production and aquaculture," Ecological Economics, Elsevier, vol. 129(C), pages 172-181.
    9. Osman, Rehab & Ferrari, Emanuele & McDonald, Scott, 2015. "Water Quality Assessment SAM/CGE and Satellite Accounts Integrated Framework-Egypt," 89th Annual Conference, April 13-15, 2015, Warwick University, Coventry, UK 204292, Agricultural Economics Society.
    10. Bauer, Dana Marie & Sue Wing, Ian, 2016. "The macroeconomic cost of catastrophic pollinator declines," Ecological Economics, Elsevier, vol. 126(C), pages 1-13.
    11. repec:spr:waterr:v:31:y:2017:i:12:d:10.1007_s11269-017-1696-4 is not listed on IDEAS
    12. Nicholas Kilimani, 2014. "Water Taxation and the Double Dividend Hypothesis," Working Papers 201451, University of Pretoria, Department of Economics.
    13. Dellink, Rob & Brouwer, Roy & Linderhof, Vincent & Stone, Karin, 2011. "Bio-economic modeling of water quality improvements using a dynamic applied general equilibrium approach," Ecological Economics, Elsevier, vol. 71(C), pages 63-79.
    14. Carlo Fezzi & Michael Hutchins & Dan Rigby & Ian J. Bateman & Paulette Posen & David Hadley, 2010. "Integrated assessment of water framework directive nitrate reduction measures," Agricultural Economics, International Association of Agricultural Economists, vol. 41(2), pages 123-134, March.
    15. Osman, Rehab & Ferrari, Emanuele & McDonald, Scott, 2015. "Water Quality Assessment SAM/CGE and Satellite Accounts Integrated Framework," 89th Annual Conference, April 13-15, 2015, Warwick University, Coventry, UK 204291, Agricultural Economics Society.
    16. repec:eee:ecolec:v:146:y:2018:i:c:p:621-632 is not listed on IDEAS
    17. Brouwer, Roy & Hofkes, Marjan, 2008. "Integrated hydro-economic modelling: Approaches, key issues and future research directions," Ecological Economics, Elsevier, vol. 66(1), pages 16-22, May.
    18. Aftab, Ashar & Hanley, Nick & Baiocchi, Giovanni, 2017. "Transferability of Policies to Control Agricultural Nonpoint Pollution in Relatively Similar Catchments," Ecological Economics, Elsevier, vol. 134(C), pages 11-21.

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