Epsilon Open Archive

Abstract

Water pollution caused by nutrients and chemicals that are leached from arable soils is a pervasive problem around the globe. The nonpoint-source nature of this pollu-tion makes it particularly complex to control from an environmental policy perspec-tive. This thesis focuses on the economics of managing arable-nitrogen flows, via surface waters to the coastal zone, from a large and spatially diverse catchment area. It is based on four self contained articles (I–IV). Article I considers the implications of time lags in ecosystem recovery processes for the dynamic cost-effectiveness of arable-nitrogen control. Article II evaluates the relative cost-efficiency of current Swedish nitrogen policy and the implications of agricultural policy for the least-cost solution. Article III analyzes the implications of covariation between arable emis-sions and retention/transport for stochastic coastal pollution abatement. Article IV explores the implications of imperfect substitutability between manure and chem-ical fertilizer in crop and pollution production for efficient environmental policy design. In each of articles I to III, a mathematical programming model is developed for the empirical analyses which are conducted in a cost-effectiveness framework. In these models changes in agricultural production practices at the watershed level are linked to indexes of marine water quality. In article I this is done explicitly, whereas in articles II and III net coastal nitrogen load is used as a proxy for environ-mental quality. The latter models also consider spatial heterogeneity in the fate and transport of nitrogen, and production costs. Article IV is purely a theoretical analysis. The principle results were; I) that the choice of abatement target (flow, stock or quality) had radical implications for the choice of abatement path, II) that least-cost abatement measures changed with the treatment of agricultural policy (i.e., whether treated as a social opportunity cost or not), III) under certain conditions, considera-tion of both emissions and retention risk caused a sweeping change in the allocation of abatement between regions/sub-catchments in the watershed, and IV) some of the standard results from the literature were shown not to hold (in general) when the perfect-substitutability assumption was dropped.