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A numerical model for dynamic cost effective mitigation of eutrophication with spatial heterogeneity in the Baltic Sea

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  • Gren, Ing-Marie

Abstract

The purpose of this paper is to present the dynamic model for the calculation of cost effective nutrient abatement for a marine sea with heterogeneous coupled marine basins which differ with respect to fast and slow responses to changes in external nutrient loads. A discrete dynamic model with heterogeneous sites – drainage and marine basins – is developed. The application to the Baltic Sea for achievement of the ministerial agreement among the riparian countries on water quality targets (Helsinki Commission Baltic Sea Action Plan) shows expected results; abatement is increasing over time and Poland faces the largest cost burdens. A specific finding is that, in spite of the complex and interlinked nutrient transports, policy design is facilitated by the stringent phosphorus load target on one specific marine basin, Baltic Proper, which is characterised by a relatively slow dynamic process and large interchange with other basins. The achievement of the phosphorus target in this basin then implies fulfilment of nutrient targets in the other basins. It is also shown that total costs under the dynamic cost effective solution can be considerably lower than the nutrient reduction program suggested by the international ministerial agreement, Helcom BSAP.

Suggested Citation

  • Gren, Ing-Marie, 2009. "A numerical model for dynamic cost effective mitigation of eutrophication with spatial heterogeneity in the Baltic Sea," Department of Economics publications 4311, Swedish University of Agricultural Sciences, Department of Economics.
  • Handle: RePEc:sua:ekonwp:4311
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    File URL: http://pub.epsilon.slu.se/4311/
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    1. 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.
    2. Ing-Marie Gren & Paul Jannke & Katarina Elofsson, 1997. "Cost-Effective Nutrient Reductions to the Baltic Sea," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 10(4), pages 341-362, December.
    3. Karl-Göran Mäler & Anastasios Xepapadeas & Aart de Zeeuw, 2003. "The Economics of Shallow Lakes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 603-624.
    4. Martin L. Weitzman, 2001. "Gamma Discounting," American Economic Review, American Economic Association, vol. 91(1), pages 260-271, March.
    5. Naevdal, Eric, 1999. "Optimal Regulation Of Eutrophying Lakes, Fjords And Rivers In The Presence Of Threshold Effects," 1999 Annual meeting, August 8-11, Nashville, TN 21619, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Griffin, James M, 1978. "Joint Production Technology: The Case of Petrochemicals," Econometrica, Econometric Society, vol. 46(2), pages 379-396, March.
    7. Elofsson, Katarina, 2003. "Cost-effective reductions of stochastic agricultural loads to the Baltic Sea," Ecological Economics, Elsevier, vol. 47(1), pages 13-31, November.
    8. Smith, Martin D. & Sanchirico, James N. & Wilen, James E., 2009. "The economics of spatial-dynamic processes: Applications to renewable resources," Journal of Environmental Economics and Management, Elsevier, vol. 57(1), pages 104-121, January.
    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. Katarina Elofsson, 2007. "Cost Uncertainty and Unilateral Abatement," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 36(2), pages 143-162, February.
    11. Cathrine Hagem & Hege Westskog, 2008. "Intertemporal Emission Trading with a Dominant Agent: How does a Restriction on Borrowing Affect Efficiency?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 40(2), pages 217-232, June.
    12. Elofsson, Katarina & Folmer, Henk & Gren, Ing-Marie, 2003. "Management of eutrophicated coastal ecosystems: a synopsis of the literature with emphasis on theory and methodology," Ecological Economics, Elsevier, vol. 47(1), pages 1-11, November.
    13. Goetz, Renan U. & Zilberman, David, 2000. "The dynamics of spatial pollution: The case of phosphorus runoff from agricultural land," Journal of Economic Dynamics and Control, Elsevier, vol. 24(1), pages 143-163, January.
    14. Gren, Ing-Marie & Jonzon, Ylva & Lindqvist, Martin, 2008. "Costs of nutrient reductions to the Baltic Sea," Department of Economics publications 3212, Swedish University of Agricultural Sciences, Department of Economics.
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    Cited by:

    1. Elofsson, Katarina & Gren, Ing-Marie, 2014. "Cost-efficient climate policies for interdependent and uncertain carbon pools," Working Paper Series 2014:7, Swedish University of Agricultural Sciences, Department Economics.
    2. Doole, Graeme J., 2012. "Cost-effective policies for improving water quality by reducing nitrate emissions from diverse dairy farms: An abatement–cost perspective," Agricultural Water Management, Elsevier, vol. 104(C), pages 10-20.
    3. Elofsson, Katarina, 2014. "International knowledge diffusion and its impact on the cost-effective clean-up of the Baltic Sea," Working Paper Series 2014:06, Swedish University of Agricultural Sciences, Department Economics.
    4. Sergey Rabotyagov & Catherine L. Kling & Philip W. Gassman & Nancy N. Rabalais & R. Eugene Turner, 2012. "Economics of Dead Zones: Linking Externalities from the Land to their Consequences in the Sea, The," Center for Agricultural and Rural Development (CARD) Publications 12-wp534, Center for Agricultural and Rural Development (CARD) at Iowa State University.

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