The Costs of Meeting the Environmental Objectives for the Baltic Sea: A Review of the Literature

Abstract

The environmental targets of the recently agreed Baltic Sea Action Plan (BSAP) targets are likely associated with a considerable cost, which motivates a search for low-cost policies. The following review shows there is a substantial literature on cost-efficient nutrient reduction strategies, including suggestions regarding low-cost abatement, but actual policies at international and national scale tend to be considerably more expensive due to lack of instruments that ensure a cost-efficient allocation of abatement across countries and sectors. Economic research on the costs of reducing hazardous substances and oil spill damages in the Baltic Sea is not available, but lessons from the international literature suggest that resources could be used more efficiently if appropriate analysis is undertaken. Common to these pollution problems is the need to ensure that all countries in the region are provided with positive incentives to implement international agreements.

The Economics of Dead Zones: Causes, Impacts, Policy Challenges, and a Model of the Gulf of Mexico Hypoxic Zone

“…The basic modeling approach is to cost-efficiently allocate abatement effort at the sectoral level (between agriculture and the wastewater treatment sector). Utilizing the same basic approach of looking at optimal allocation of abatement activities across sectors, Ing-Marie 2 Since that time, several studies using a similar approach (reviewed in Elofsson, 2010) have been conducted for the Baltic. Cost-efficiency gains from optimal allocation of abatement effort across countries and industries are consistently large, yet a lot of effort is devoted to reiterating that point, which appears to be due to political considerations.…”

Cost-Effectiveness Analysis of Surface Flow Constructed Wetlands (SFCW) for Nutrient Reduction in Drainage Discharge from Agricultural Fields in Denmark

“…This appraisal tool has been used in many studies to assess and rank measures of mitigating nutrients loss into water bodies under the requirements of the EU Water framework directive. A review of these studies has been provided by Balana et al (2011) and Elofsson (2010). The CEA approaches range from the use of simple spreadsheet model to complex models depending on the level of implementation (regional, national catchment or field scale) and data availability (Balana et al 2011).…”

The Stringency of Environmental Regulations and Trade in Environmental Goods

“…In the case of the greater Paris area, for example, it has been estimated that at least 10% of tertiary wastewater treatment costs for removing nitrogen can be ascribed to agriculture (Bommelaer and Devaux, 2011). Meanwhile, there is evidence for the Baltic region suggesting that achieving cost-effective nutrient reductions there would likely require targeting both agriculture and the treatment of wastewater, with wastewater treatment plants assuming a much bigger role in the case of phosphorus than in the case of nitrogen (Gren et al, 1997;Elofsson, 2010).…”