Optimal Control of Nutrient Pollution in a Coastal Ecosystem: Agricultural Abatement versus Investment in Wastewater Treatment Capacity
We examine in a dynamic framework how public resources should be allocated to small-scale water protection efforts in agriculture or alternatively to investments in large-scale waste water treatment plants to control point source loads. The building of waste water treatment capacity is characterized by high set-up costs as compared to the operating costs. We determine the optimal timing of investment, the rate of nutrient load reduction from point versus non-point sources, and the optimal switching policies from control of non-point pollution only to control of both non-point and point sources. The results of the analytical model are illustrated with simulation of optimal abatement policies for the Finnish coastal waters in the Gulf of Finland.
|Date of creation:||2005|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.eaae.org|
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- Turner, R. Kerry & Georgiou, Stavros & Gren, Ing-Marie & Wulff, Fredric & Barrett, Scott & Soderqvist, Tore & Bateman, Ian J. & Folke, Carl & Langaas, Sindre & Zylicz, Tomasz, 1999. "Managing nutrient fluxes and pollution in the Baltic: an interdisciplinary simulation study," Ecological Economics, Elsevier, vol. 30(2), pages 333-352, August.
- Elofsson, Katarina, 2003. "Cost-effective reductions of stochastic agricultural loads to the Baltic Sea," Ecological Economics, Elsevier, vol. 47(1), pages 13-31, November.
- Eric N�vdal, 2001. "Optimal Regulation of Eutrophying Lakes, Fjords, and Rivers in the Presence of Threshold Effects," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 972-984.
- Markowska, Agnieszka & Zylicz, Tomasz, 1999. "Costing an international public good: the case of the Baltic Sea," Ecological Economics, Elsevier, vol. 30(2), pages 301-316, August.
- Hart, Rob, 2003. "Dynamic pollution control--time lags and optimal restoration of marine ecosystems," Ecological Economics, Elsevier, vol. 47(1), pages 79-93, November.
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