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Benefit-Cost Analysis of Precision Agriculture for Nitrogen Pollution Reduction: Evidence from the Zelivka Catchment

Author

Listed:
  • Matej Opatrny

    (Charles University, Faculty of Social Sciences, Institute of Economic Studies & Charles University Environment Center)

  • Milan Scasny

    (Charles University, Faculty of Social Sciences, Institute of Economic Studies & Charles University Environment Center)

  • Csilla Farkas

    (Norwegian Institute of Bioeconomy Research (NIBIO))

  • Mikael Skou Andersen

    (Aarhus University)

  • David Zilberman

    (University of California, Berkeley)

Abstract

This paper presents a social benefit-cost analysis (BCA) of Precision Agriculture (PA)and Enhanced Efficiency Fertilizers (EEF) for reducing nitrate pollution in the Zelivka catchment, the drinking-water source for 1.5 million people in Prague and surrounding regions. The analysis combines field-level data (50,309 ha, 729 farms), meta-analytical biophysical parameters, a dynamic heterogeneous-agent adoption model, and cross-validation against an independent SWAT+ hydrological simulation. Technology adoption generates a mean Net Present Value of EUR 291 million (95% CI: EUR 94 775 million) over fifty years, with a deterministic benefit-cost ratio of 19.8. Even with health benefits set to zero, the NPV remains positive at EUR 44 million, indicating that private benefits alone cover adoption costs. BCA and the SWAT+ approaches imply comparable rates of reservoir-concentration decline (≈0.15 mg/L/yr in SWAT+ over its lag-free window versus a ≈0.13 mg/L/yr peak in the BCA once the lag has elapsed). At-source nitrogen prevention via agricultural technology adoption offers a cost-effective complement to structural catchment measures and end-of-pipe water treatment.

Suggested Citation

  • Matej Opatrny & Milan Scasny & Csilla Farkas & Mikael Skou Andersen & David Zilberman, 2026. "Benefit-Cost Analysis of Precision Agriculture for Nitrogen Pollution Reduction: Evidence from the Zelivka Catchment," Working Papers IES 2026/18, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jul 2026.
    • Handle: RePEc:fau:wpaper:wp2026_18
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    Keywords

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    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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