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An integrated simulation model to evaluate national policies for the abatement of agricultural nutrients in the Baltic Sea

Listed author(s):
  • Hyytiainen, Kari
  • Ahtiainen, Heini
  • Heikkila, Jaakko
  • Helin, Janne
  • Huhtala, Anni
  • Iho, Antti
  • Koikkalainen, Kauko
  • Miettinen, Antti
  • Pouta, Eija
  • Vesterinen, Janne

This study introduces a prototype model for evaluating policies to abate agricultural nutrients in the Baltic Sea from a Finnish national point of view. The stochastic simulation model integrates nutrient dynamics of nitrogen and phosphorus in the sea basins adjoining the Finnish coast, nutrient loads from land and other sources, benefits from nutrient abatement (in the form of recreation and other ecosystem services) and the costs of agricultural abatement activities. The aim of this study is to present the overall structure of the model and to demonstrate its potential using preliminary parameters. The model is made flexible for further improvements in all of its ecological and economic components. Results of a sensitivity analysis suggest that investments in reducing the nutrient runoff from arable land in Finland would become profitable only if Finland’s neighbors in the northern Baltic committed themselves to similar reductions. Environmental investments for improving water quality yield the highest returns for the Bothnian Bay and the Gulf of Finland, and smaller returns for the Bothnian Sea. In the Bothnian Bay, the abatement activities become profitable because the riverine loads from Finland represent a high proportion of the total nutrient loads. In the Gulf of Finland, this proportion is low, but the size of the coastal population benefiting from improved water quality is high.

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Paper provided by MTT Agrifood Research Finland in its series Discussion Papers with number 49896.

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Date of creation: Apr 2009
Handle: RePEc:ags:mttfdp:49896
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  1. Brady, Mark, 2003. "The relative cost-efficiency of arable nitrogen management in Sweden," Ecological Economics, Elsevier, vol. 47(1), pages 53-70, November.
  2. 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.
  3. R. Turner, 2007. "Limits to CBA in UK and European environmental policy: retrospects and future prospects," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 253-269, May.
  4. Koikkalainen, Kauko & Laukkanen, Marita & Helin, Janne, 2006. "Abatement costs for agricultural nitrogen and phosphorus loads: a case study of South-Western Finland," Discussion Papers 11867, MTT Agrifood Research Finland.
  5. Elofsson, Katarina, 2003. "Cost-effective reductions of stochastic agricultural loads to the Baltic Sea," Ecological Economics, Elsevier, vol. 47(1), pages 13-31, November.
  6. 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.
  7. Ahtiainen, Heini, 2009. "Valuing international marine resources: A meta-analysis on the Baltic Sea," Discussion Papers 48915, MTT Agrifood Research Finland.
  8. Olof Byström, 2000. "The Replacement Value of Wetlands in Sweden," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(4), pages 347-362, August.
  9. Honkatukia, Juha & Ollikainen, Markku, 2001. "Towards Efficient Pollution Control in the Baltic Sea. An anatomy of current failure with suggestions," Discussion Papers 755, The Research Institute of the Finnish Economy.
  10. Amos Tversky & Daniel Kahneman, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 1039-1061.
  11. Turtola, E. & Paajanen, A., 1995. "Influence of improved subsurface drainage on phosphorus losses and nitrogen leaching from a heavy clay soil," Agricultural Water Management, Elsevier, vol. 28(4), pages 295-310, December.
  12. Holly J. Michael & Kevin J. Boyle & Roy Bouchard, 2000. "Does the Measurement of Environmental Quality Affect Implicit Prices Estimated from Hedonic Models?," Land Economics, University of Wisconsin Press, vol. 76(2), pages 283-298.
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