IDEAS home Printed from https://ideas.repec.org/a/kap/enreec/v64y2016i1d10.1007_s10640-014-9859-8.html
   My bibliography  Save this article

Marginal Damage Cost of Nutrient Enrichment: The Case of the Baltic Sea

Author

Listed:
  • Thanh Viet Nguyen

    (VNU University of Economics and Business)

  • Lars Ravn-Jonsen

    (University of Southern Denmark)

  • Niels Vestergaard

    (University of Southern Denmark)

Abstract

The purpose of this article is to investigate the link between marine pollution and marine renewable resources. An extended bio-economic model of a fishery is developed to include nutrient enrichment and built into a general model of the polluting and fishery sector with nutrient concentration and fish stock as state variables. The marginal damage function for nutrient enrichment is derived. This function can be compared with the marginal abatement cost and hence it provides a basis for policies that balance the use of nutrients in land-based industries (for example agriculture) with the external cost to the marine environment. The model is empirically applied to the case of the Baltic Sea, where Eastern Baltic cod fisheries are affected by nutrient enrichment. The results indicate that nitrogen loading needs to be reduced slightly (around 1 %) to reach optimal levels. The results also show that the optimal fishery policy plays a more important role in producing the net benefits than nitrogen reduction policies do. Further, the impact on the productivity of the fish stock from pollution reduction is higher when an optimal policy is followed.

Suggested Citation

  • Thanh Viet Nguyen & Lars Ravn-Jonsen & Niels Vestergaard, 2016. "Marginal Damage Cost of Nutrient Enrichment: The Case of the Baltic Sea," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(1), pages 109-129, May.
    • Handle: RePEc:kap:enreec:v:64:y:2016:i:1:d:10.1007_s10640-014-9859-8
    DOI: 10.1007/s10640-014-9859-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10640-014-9859-8
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10640-014-9859-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Edward B. Barbier, 2003. "Habitat–Fishery Linkages And Mangrove Loss In Thailand," Contemporary Economic Policy, Western Economic Association International, vol. 21(1), pages 59-77, January.
    2. Per Sandberg, 2006. "Variable unit costs in an output-regulated industry: The Fishery," Applied Economics, Taylor & Francis Journals, vol. 38(9), pages 1007-1018.
    3. Fulginiti, Lilyan & Perrin, Richard, 1993. "The Theory and Measurement of Producer Response under Quotas," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 97-106, February.
    4. Quaas, Martin F. & Requate, Till & Ruckes, Kirsten & Skonhoft, Anders & Vestergaard, Niels & Voss, Rudi, 2013. "Incentives for optimal management of age-structured fish populations," Resource and Energy Economics, Elsevier, vol. 35(2), pages 113-134.
    5. Kahn, James R. & Kemp, W. Michael, 1985. "Economic losses associated with the degradation of an ecosystem: The case of submerged aquatic vegetation in Chesapeake Bay," Journal of Environmental Economics and Management, Elsevier, vol. 12(3), pages 246-263, September.
    6. Chris M. Alaouze, 1999. "An Economic Analysis of the Eutrophication Problem of the Barwon and Darling Rivers in New South Wales," Australian Economic Papers, Wiley Blackwell, vol. 38(1), pages 51-63, January.
    7. Squires, Dale, 1994. "Firm behavior under input rationing," Journal of Econometrics, Elsevier, vol. 61(2), pages 235-257, April.
    8. Edward Barbier & Ivar Strand, 1998. "Valuing Mangrove-Fishery Linkages – A Case Study of Campeche, Mexico," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 12(2), pages 151-166, September.
    9. Lone Grønbæk Kronbak, 2002. "The Dynamics of an Open Access: The case of the Baltic Sea Cod Fishery - A Strategic Approach -," Working Papers 31/02, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.
    10. Smith, Martin D. & Crowder, Larry B., 2005. "Valuing Ecosystem Services with Fishery Rents: A Lumped-Parameter Approach to Hypoxia in the Neuse River Estuary," Natural Resources Management Working Papers 12127, Fondazione Eni Enrico Mattei (FEEM).
    11. Martin D. Smith & Larry B. Crowder, 2011. "Valuing Ecosystem Services with Fishery Rents: A Lumped-Parameter Approach to Hypoxia in the Neuse River Estuary," Sustainability, MDPI, vol. 3(11), pages 1-39, November.
    12. Clark, Colin W. & Munro, Gordon R., 1975. "The economics of fishing and modern capital theory: A simplified approach," Journal of Environmental Economics and Management, Elsevier, vol. 2(2), pages 92-106, December.
    13. McConnell, Kenneth E. & Strand, Ivar E., 1989. "Benefits from commercial fisheries when demand and supply depend on water quality," Journal of Environmental Economics and Management, Elsevier, vol. 17(3), pages 284-292, November.
    14. Oecd, 2002. "Access for Business," OECD Digital Economy Papers 67, OECD Publishing.
    15. Edward B. Barbier, 2007. "Valuing ecosystem services as productive inputs [‘Valuing groundwater recharge through agricultural production in the Hadejia-Jama’are wetlands in northern Nigeria’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 22(49), pages 178-229.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kuhn, Tinka K. & Oinonen, Soile & Trentlage, Jennifer & Riikonen, Simo & Vikström, Suvi & Burkhard, Benjamin, 2021. "Participatory systematic mapping as a tool to identify gaps in ecosystem services research: insights from a Baltic Sea case study," Ecosystem Services, Elsevier, vol. 48(C).
    2. Sihvonen, Matti & Pihlainen, Sampo & Lai, Tin-Yu & Salo, Tapio & Hyytiäinen, Kari, 2021. "Crop production, water pollution, or climate change mitigation—Which drives socially optimal fertilization management most?," Agricultural Systems, Elsevier, vol. 186(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Godwin K. Vondolia & Wenting Chen & Claire W. Armstrong & Magnus D. Norling, 2020. "Bioeconomic Modelling of Coastal Cod and Kelp Forest Interactions: Co-benefits of Habitat Services, Fisheries and Carbon Sinks," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(1), pages 25-48, January.
    2. Martin D. Smith, 2007. "Generating Value in Habitat-Dependent Fisheries: The Importance of Fishery Management Institutions," Land Economics, University of Wisconsin Press, vol. 83(1), pages 59-73.
    3. Yamamoto, Yuki, 2023. "Living under ecosystem degradation: Evidence from the mangrove–fishery linkage in Indonesia," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).
    4. Edward B. Barbier, 2003. "Habitat–Fishery Linkages And Mangrove Loss In Thailand," Contemporary Economic Policy, Western Economic Association International, vol. 21(1), pages 59-77, January.
    5. Martin D. Smith & Larry B. Crowder, 2011. "Valuing Ecosystem Services with Fishery Rents: A Lumped-Parameter Approach to Hypoxia in the Neuse River Estuary," Sustainability, MDPI, vol. 3(11), pages 1-39, November.
    6. Kroetz, Kailin & Kuwayama, Yusuke & Vexler, Caroline, 2019. "What is a Fish Out of Water? The Economics Behind the Joint Management of Water Resources and Aquatic Species in the United States," RFF Working Paper Series 19-09, Resources for the Future.
    7. McConnell, Kenneth E. & Bockstael, Nancy E., 2006. "Valuing the Environment as a Factor of Production," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 14, pages 621-669, Elsevier.
    8. Ute Kapaun & Martin Quaas, 2013. "Does the Optimal Size of a Fish Stock Increase with Environmental Uncertainties?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 54(2), pages 293-310, February.
    9. Duncan Knowler, 2002. "A Review of Selected Bioeconomic Models with Environmental Influences in Fisheries," Journal of Bioeconomics, Springer, vol. 4(2), pages 163-181, May.
    10. Edward Barbier & Ivar Strand & Suthawan Sathirathai, 2002. "Do Open Access Conditions Affect the Valuation of an Externality? Estimating the Welfare Effects of Mangrove-Fishery Linkages in Thailand," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(4), pages 343-365, April.
    11. Hassan, R.M. & Crafford, J.G., 2015. "Measuring the contribution of ecological composition and functional services of ecosystems to the dynamics of KwaZulu-Natal coast fisheries," Ecological Economics, Elsevier, vol. 119(C), pages 306-313.
    12. Horatiu A. Rus, 2016. "Renewable Resources, Pollution and Trade," Review of International Economics, Wiley Blackwell, vol. 24(2), pages 364-391, May.
    13. Olli Tahvonen, 1991. "On the dynamics of renewable resource harvesting and pollution control," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 1(1), pages 97-117, March.
    14. McVittie, Alistair & Moran, Dominic, 2010. "Valuing the non-use benefits of marine conservation zones: An application to the UK Marine Bill," Ecological Economics, Elsevier, vol. 70(2), pages 413-424, December.
    15. Lone Kronbak & Marko Lindroos, 2006. "An Enforcement-Coalition Model: Fishermen and Authorities Forming Coalitions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 35(3), pages 169-194, November.
    16. Mykoniatis, Nikolaos & Ready, Richard, 2013. "Evaluating habitat-fishery interactions: The case of Submerged Aquatic Vegetation and Blue Crab fishery in the Chesapeake Bay," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150683, Agricultural and Applied Economics Association.
    17. Simonit, Silvio & Perrings, Charles, 2011. "Sustainability and the value of the 'regulating' services: Wetlands and water quality in Lake Victoria," Ecological Economics, Elsevier, vol. 70(6), pages 1189-1199, April.
    18. Johannus Janmaat, 2012. "Fishing in a Shallow Lake: Exploring a Classic Fishery Model in a Habitat with Shallow Lake Dynamics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(2), pages 215-239, February.
    19. H. Spencer Banzhaf & James Boyd, 2012. "The Architecture and Measurement of an Ecosystem Services Index," Sustainability, MDPI, vol. 4(4), pages 1-32, March.
    20. Tanner, Michael K. & Moity, Nicolas & Costa, Matthew T. & Marin Jarrin, Jose R. & Aburto-Oropeza, Octavio & Salinas-de-León, Pelayo, 2019. "Mangroves in the Galapagos: Ecosystem services and their valuation," Ecological Economics, Elsevier, vol. 160(C), pages 12-24.

    More about this item

    Keywords

    Marginal damage function; Marine environment; Eutrophication; Eastern Baltic cod; Bio-economic modeling;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:64:y:2016:i:1:d:10.1007_s10640-014-9859-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.