Abatement costs for agricultural nitrogen and phosphorus loads: a case study of crop farming in south-western Finland

Abstract

Designing efficient agri-environmental policies for agricultural nutrient load reductions calls for information on the costs of emission reduction measures. This study develops an empirical framework for estimating abatement costs for nutrient loading from agricultural land. Nitrogen abatement costs and the phosphorus load reductions associated with nitrogen abatement are derived for crop farming in south-western Finland. The model is used to evaluate the effect of the Common Agricultural Policy reform currently underway on nutrient abatement costs. Results indicate that an efficiently designed policy aimed at a 50% reduction in agricultural nitrogen load would cost € 48 to € 35 million, or € 3756 to € 2752 per farm.Key-words: water pollution, agriculture, abatement, nitrogen, phosphorus, nutrient load IntroductionExcessive concentrations of nutrients that regulate phytoplankton growth cause eutrophication of marine and freshwater ecosystems. The most heavily loaded marine areas in Europe show symptoms of severe eutrophication (see for example AErtebjerg et al. 2001). The Baltic Sea ecosystem has proved particularly vulnerable to nutrient pollution. Blooms of toxic blue-green algae occur during the warm summer months, and filamentous algae cover the seabed in coastal areas. Eutrophication results in significant damages through reduced value of fisheries and recreational activities (e.g. Gren et al. 1997, Söderqvist and Scharin 2000, Sandström et al. 2000, Kosenius 2004. Nutrient loading from land-based sources and the atmosphere builds up nutrient concentrations. The state of eutrophied water ecosystems can be improved by reducing nutrient loads from inland sources, which include agriculture, municipalities and industry. Agriculture has been identified as the major source of eutrophying nutrients in developed countries (see e. g. Shortle and Abler 2001). For example in the Nordic countries, municipal and industrial nutrient A G R I C U L T U R A L A N D F O O D S C I E N C E Helin, J. et al. Abatement costs for agricultural nutrient load in SW Finlandloads have been reduced significantly during the last few decades, while agricultural nutrient loads remain substantial (HELCOM 2005).Linking nutrient load reductions with the costs of those reductions is essential for informed decision making. Abatement costs are relatively easy to assess in the case of municipal and industrial point-source pollution, whereas quantifying abatement costs for agricultural non-point pollution poses a challenge (see e.g. Russel and Shogren 1993). Nutrient removal at municipal and industrial sources requires setting up wastewater treatment facilities, after which chemical or biological nutrient removal occurs at an approximately constant cost. Agricultural abatement instead takes place through changes in agricultural practices and through adopting abatement measures that filter runoff, such as buffer strips and wetlands. Nutrient loading is affected both by agricultural management practices, such as crop choice, fertilizer use, and til...

Economic and environmental performance of alternative policy measures to reduce nutrient surpluses in Finnish agriculture

“…by Lankoski and Ollikainen 1999, Iho 2005and Helin et al 2006. However, the emphasis in these studies is in theoretical set-up and crop production and their results are not directly comparable to this study.…”

Impacts of changes in water quality on recreation behavior and benefits in Finland

“…Söderqvist and Scharin (2000) found that in the Stockholm archipelago a onemeter improvement in clarity from 1.5 to 2.5 meters, would require approximately a 30 percent reduction in nitrogen, while a similar improvement from a better initial water clarity of 2.5 meters would require a smaller, 21 percent reduction. Helin et al (2006) estimated that a 50 percent reduction in nitrogen flow from Finnish agriculture to the Gulf of Finland would cost 34.9 to 47.6 million euros annually, depending on policy regime. Although inland water eutrophication is more often phosphorus-limited, our simple water clarity models suggest that reductions in nitrogen flows to the sea also have an effect on inland waters, providing additional benefits.…”

Environmental and Production Cost Impacts of No-till in Finland: Estimates from Observed Behavior

“…We used the same nutrient and herbicide loading models as Lankoski et al (2006), compiled from a number of natural science studies, but abstracted away from buffer strips as a measure to mitigate loading. The nutrient model has also been applied by Helin et al (2006 (2006) or Helin et al (2006).…”

“…The resulting reduction in environmental damage would be 45%, as opposed to the 34% obtained with the predicted use of fertilizers and plant protection products. For the parameters from Helin et al (2006), the analysis based on observed values would indicate that no-till reduces the total environmental damage. Here the simple approach thus yields results that are both quantitatively and qualitatively misleading.…”