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Costs of nutrient reductions to the Baltic Sea

  • Gren, Ing-Marie
  • Jonzon, Ylva
  • Lindqvist, Martin

This paper presents calculations of costs for measures reducing nitrogen and/or phosphorous loads to the Baltic Sea and minimum cost solutions for different nutrient reduction target formulations. In total, 14 measures are included for nitrogen (N) reductions and 12 for phosphorous (P) reduction, out of which six measures affect both nutrients. Calculations show that land use measures provide low cost measures for N reductions and P free detergents and improved sewage cleaning for P reductions. Two types of targets are chosen for calculation of minimum cost solutions: overall reductions of nutrient to the Baltic Sea and reductions to specific basins. Three different assumptions on adjustments among basins to exogenous load changes are made for basin specific targets; no adjustment, partial first-order adjustment, and total steady state adjustment. For a given nutrient reduction in percent, both estimated total cost and cost effective allocation of reduction in loads to different basins vary considerably depending on target setting. However, costs of different measures, and thereby estimated minimum cost solutions are sensitive to parameter values on leaching, retention, and abatement cost and capacity. Sensitivity analyses show that minimum costs of nitrogen reductions are mainly affected by changes in assumed abatement capacity of land use measures, and costs of phosphorus reductions are sensitive to cleaning cost at sewage treatment plants.

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File URL: http://pub.epsilon.slu.se/3212/
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Paper provided by Swedish University of Agricultural Sciences, Department of Economics in its series Department of Economics publications with number 3212.

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Date of creation: 2008
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Handle: RePEc:sua:ekonwp:3212
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  1. Runar Br�nnlund & Bengt Kristr�m, 1996. "Welfare Measurement in Single and Multimarket Models: Theory and Application," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 157-165.
  2. Ing-Marie Gren, 2001. "International Versus National Actions Against Nitrogen Pollution of the Baltic Sea," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 20(1), pages 41-59, September.
  3. Elofsson, Katarina, 2003. "Cost-effective reductions of stochastic agricultural loads to the Baltic Sea," Ecological Economics, Elsevier, vol. 47(1), pages 13-31, November.
  4. Ing-Marie Gren & Paul Jannke & Katarina Elofsson, 1997. "Cost-Effective Nutrient Reductions to the Baltic Sea," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 10(4), pages 341-362, December.
  5. Hansen, Lars Gårn, 2004. "Nitrogen Fertilizer Demand from Danish Crop Farms - Regulatory Implications of Farm Heterogeneity," MPRA Paper 48366, University Library of Munich, Germany.
  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.
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