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Market power and double-dipping in nutrient trading markets

Gren, Ing-Marie and Elofsson, Katarina (2013). Market power and double-dipping in nutrient trading markets. Uppsala: (NL, NJ) > Dept. of Economics, Sveriges lantbruksuniversitet. Working paper series / Swedish University of Agricultural Sciences, Department of Economics ; 2013:02

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Heavy loads of nutrients, i.e. nitrogen and phosphorus, cause severe damages in many waters in the world. This paper develops a model for nutrient trading markets for a sea damaged by both nitrogen and phosphorus and faces a dominant polluter of one or both nutrients. The existence of abatement measures with simultaneous impacts on both nutrients raises the need for double-dipping in both markets. It is shown that double-dipping decreases overall abatement costs for reaching predetermined targets, and reduces efficiency losses of market power, in particular when the same agent exercises market power in both markets. An empirical application to the intergovernmental agreement on reducing nutrient loads to the eutrophied Baltic Sea in North-East Europe demonstrates cost savings of approximately 25% from introduction of double-dipping, and that efficiency losses from market power of one dominant country, Poland, can be reduced by 10%.

Authors/Creators:Gren, Ing-Marie and Elofsson, Katarina
Title:Market power and double-dipping in nutrient trading markets
Series Name/Journal:Working paper series / Swedish University of Agricultural Sciences, Department of Economics
Year of publishing :1 March 2013
Number of Pages:30
Place of Publication:Uppsala
Publisher:Department of Economics, Swedish University of Agricultural Sciences
Publication Type:Report
Full Text Status:Public
Agris subject categories.:P Natural resources > P10 Water resources and management
Subjects:(A) Swedish standard research categories 2011 > 5 Social Sciences > 502 Economics and Business > Economics
Agrovoc terms:nitrogen, phosphorus, nutrients, eutrophication, sea pollution, markets, regulations, models, baltic sea
Keywords:Nutrient trading, Market power, Double-dipping, Eutrophication, Baltic Sea
Permanent URL:
ID Code:9472
Department:(NL, NJ) > Dept. of Economics
Deposited By: Ing-Marie Gren
Deposited On:05 Mar 2013 09:18
Metadata Last Modified:02 Dec 2014 10:55

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