There has been a great deal of interest in addressing water quality issues through the use of Transferable Discharge Permit (TDP) systems. Unfortunately, the attempts to start up permit markets that are able to exploit abatement cost differences between sources have not met with the success expected. Two of the reasons for the lack of success have been the problem of transaction costs and in the case of non-point sources (NPS), undefined property rights. The composite market design is a proposal for a TDP system that specifically includes agricultural non-point source (NPS) discharges and addresses both property rights and transaction cost problems. The composite market consists of three interrelated markets each serving a particular function. The two primary markets are coordinated through price information that makes it possible for a catchment-based authority to issue (sell) permits based on the marginal cost of abatement. When the composite market is mature, the total number of permits issued corresponds to a cap on discharges allowed in the catchment. The structure of the composite market allows this system to be phased in over time with existing institutions and limited demands on financing.
There has been overwhelming interest in addressing water quality issues through the use of economic instruments. Much of this attention has focused on the cost efficiencies offered by Transferable Discharge Permit (TDP) systems. Unfortunately, the attempts to start up permit markets which are able to exploit abatement cost differences between sources have not met with the success expected. Two of the reasons for the lack of success that have been taken up in analysis of these programs have been the problem of transaction costs and in the case of non-point sources (NPS), undefined property rights. The composite market design is a proposal for a TDP system which specifically includes agricultural non-point source (NPS) dischargers and addresses both property rights and transaction cost problems. The composite market consists of three interrelated markets each serving a particular function. When the composite market is mature, the total number of permits issued represents the cap on discharges allowed in the catchment. The structure of the composite market allows this system to be phased in over time with existing institutions and limited demands on financing.
The composite market design is a proposal for a transferable discharge permit system that specifically includes agricultural non-point-source dischargers and addresses both property rights and transaction cost problems. The first step to implementation of a composite market scheme is the estimation of a supply curve for abatement measures in the catchment area. Estimation is performed by combining costs with modeled loss reductions from selected best management practices and then using this information to estimate the supply curve for abatement, which in turn can then be used to set permit prices. The Rönneå catchment in southern Sweden is used as a pilot study area for making this type of estimate. Costs for existing measures that reduce nutrient losses from farmland (catch crops and spring planting) are based on existing programs financed by the Swedish Agricultural Board. A set of supply curves is calculated for these measures using retention estimates for seven subcatchments and three soil types in the area. Although existing information is sufficient to calculate partial supply curves and may be used to set permit prices, additional measures should be included as well as an increased number of variables for differentiating site specific reduction costs.
Natural water retention measures (NWRM) are a multifunctional form of green infrastructure that can play an important role in catchment-scale flood risk management. While green infrastructure based on natural processes is increasingly recognised as being complementary to traditional flood control strategies based on grey infrastructure in urban areas, there are a number of outstanding challenges with their widespread uptake. At a catchment scale, it is widely accepted that NWRM in upstream areas based on the concept of ’keeping the rain where it falls’ can help reduce the risk of downstream flooding by enhancing or restoring natural hydrological processes including interception, evapotranspiration, infiltration, and ponding. However, both the magnitude of flood risk reduction and the institutional structures needed for widespread uptake of NWRM are inadequately understood. Implementing NWRM can involve trade-offs, especially in agricultural areas. Measures based on drainage management and short rotation forestry may help ’keep the rain where it falls’ but can result in foregone farm income. To identify situations where the implementation of NWRM may be warranted, an improved understanding of the likely reductions in downstream urban flood risk, the required institutional structures for risk management and transfer, and mutually acceptable farm compensation schemes are all needed.
Current international agreements call for a significant reduction of nutrient loads to the Baltic Sea. In one of the signatory countries, Sweden, regulatory authorities have concluded that new measures will be needed to meet national reduction targets. This article evaluates the effect of one possible new measure for reducing nitrogen loads, introducing mandatory discharge permits for crop cultivation as one component of a proposed discharge permit system. Using the framework of the proposed system, expected net load reductions and permit prices are calculated for three crop permit scenarios in a catchment in Southern Sweden. In addition, gross leaching is calculated for a larger region to study the potential for reducing net loads. The article concludes that while permitting reduces loading, achieving reduction targets will require additional measures beyond the scenarios studied.
Current international agreements call for a significant reduction of nitrogen loads to the Baltic Sea. New measures to reduce nitrogen loads from the agricultural sector and an increased focus on cost efficiency will be needed to meet reduction targets. For policy design and evaluation it is important to understand the impact of weather on the efficiency of abatement measures. One new proposed policy is the use of crop permits based on weather normalized average leaching. This paper describes the use of the Spearman method to determine the efficiency of this policy with annual weather variation. The conclusion is that the values of the Spearman correlation coefficients in the study indicate that using average leaching for the individual crops on specific soil types for calculating crop permit requirements is an efficient policy. The Spearman method is demonstrated to be a simple useful tool for evaluating the impact of weather and is recommended for use in new studies.
Regulation of pesticides has often followed a command and control approach. However, economic instruments allow for environmental goals to be used for targeting as well as provide users (farmers) with flexibility in their response. The primary environmental effects of concern from the use of plant pesticides are related to the toxic effects on non-targeted organisms in environmental media. This paper describes a methodology for ex ante evaluation of policy alternatives for reducing the impact on the aquatic environment from pesticide use.
The proposed methodology consists of several components. It uses the Pesticide Toxicity Index (PTI) for defining an environmental goal and for evaluation of the environmental effect of policy alternatives, a field based model MACRO-DB for describing the impact of crop management programs and agricultural land use on concentrations of active compounds from pesticide use and the use of economic modelling to determine the effect on farm income from alternative tax schemes. The paper presents an application of this method using empirical data from a small agricultural catchment in Southern Sweden and compares the economic and environmental effects of a differentiated tax on the most toxic class of pesticides and a flat tax on all pesticides. On average the costs of reducing environmental impacts by one unit of PTI were estimated to be €1 009 for the flat tax and €71,5 for the differentiated tax.
Low participation rates by farmers in voluntary agri-environmental programs may depend on rationally bounded ex ante estimates of the negative effect of program enrollment on farm income. Uncertainty and the presence of information transaction costs may lead to the use of heuristics by farmers to reduce adoption decision costs. This paper describes how LENNART, a net-based decision support system (DSS), has been designed to exploit the use of heuristics and provide low cost access to information. The model has been developed to evaluate the effects of agronomic measures on farm income and on the leaching of nutrients from cultivated fields. A subsidy program for catch crop cultivation in Southern Sweden served as the basis for development of the DSS and is used throughout the paper for purposes of illustration. (C) 2004 Elsevier B.V. All rights reserved.
The potential of modified spring barley crops with improved nitrogen (N) use efficiency to reduce nitrogen (N) leaching and to increase soil organic carbon (SOC) storage was assessed at the regional scale. This was done using simulation model applications designed for reporting according to the Helcom (Helsinki Commission) and Kyoto protocols. Using model simulations based on modified crops N dynamics and SOC were assessed for three agro-ecological regions (latitudes ranging 55°20′–60°40′ N) in Sweden over a 20-year period. The modified N use properties of spring barley were implemented in the SOILNDB model (simulating soil C, N, water and heat, and plant N dynamics) by changing the parameters for root N uptake efficiency and plant N demand within a range given by previous model applications to different crops. A doubling of the daily N uptake efficiency and increased N demand (by ca 30%) reduced N leaching by 24%–31%, increased plant N content by 9%–12%, depending on region. The effects of the modified crop on SOC was simulated with the ICBM model, resulting in an increased SOC content (0–25 cm depth) by 57–79 kg C ha−1 y−1. The results suggest that a modified crop might reduce N leaching from spring barley area, in a range similar to the targets of relevant environmental protection directives, a result which held more in the northern than southern regions. The simulated SOC increase on a hectare basis was highest for the central region and least for the most northern region. For the total agricultural area the share of spring barley area was small and more crops would need to be modified to reach the emission reduction targets.
To what extent might a crop with increased plant N uptake efficiency and/or N demand increase plant biomass and soil carbon storage, decrease N leaching, and reduce the need for N fertilisation? This was assessed for a fertilised sandy loam site in central Sweden cultivated with spring barley for a four year period using a process based crop and soil simulation model (SOILN) calibrated to fit observations of field experiments with non-modified crops. Crop properties were changed in accordance with previous model applications to other crops with higher N uptake and utilisation efficiencies, to resemble potential effects of breeding. For the modified crops a doubling of daily uptake efficiency of soil mineral N and/or increase of radiation use efficiency by 30%, increased plant biomass by 3%-30%, decreased N leaching by 1%-30% and increased soil organic carbon (SOC) content by 1-12 g C m-2 year-1. The larger changes were mainly due to increased uptake efficiency. Fertilisation of the modified spring barley crop could be reduced while still producing the same plant biomass as the non-modified crop. The plant biomass to N leaching ratio of the modified crops increased. The simulated changes in plant biomass and SOC were sensitive to weather conditions suggesting that in situ experiments would need to cover a large range of weather conditions to evaluate the performance of new crop traits under climatic variability. The study suggests a strong need that field experiments are accompanied with model applications, when exploring the potential of the modified crops under variable conditions.
The Water Framework Directive (WFD, directive 2000/60/EC) was created to ensure the sustainable use of water resources in the European Union. A central guideline included throughout the directive is a call for the participation of stakeholders in the management of these resources. Involving stakeholders is an important step to ensure that catchment management plans take into consideration local experience in the development of these plans and the impact of the plans on local interests. This paper describes and analyses the results of a series of workshops to facilitate implementation of the WFD at a catchment level based on the stakeholder participation model, CATCH. To test the usefulness of the CATCH model, developed for water management in a catchment area, a sub-catchment in an alpine valley in the north-east of Italy, the Alta Valsugana in the Province of Trento, was chosen as the setting for a series of workshops. In this valley water is fundamental for activities associated with agriculture, domestic use, energy production, sports and recreation. In the recent past the valley has had serious problems related to water quality and quantity. Implementation of water management plans under the WFD may lead to conflicts within the catchment between different stakeholder interest groups. Including stakeholders in the development of management plans not only follows the guidelines of the WFD but also could result in a more locally adapted and acceptable plan for the catchment. A new stakeholder analysis methodology was developed and implemented in order to identify the relevant stakeholders of the area and then two sets of workshops involving the key stakeholders identified were conducted in Spring 2006. The CATCH meetings were a new experience for the participants, who had to deal with both the principles of the WFD in general and the participation requirement in particular. During the meetings, the CATCH model played a very important role in structuring the participatory process. It provided a general framework consisting of a sequence of steps that helped the participants to reach the goal of the process: the identification and evaluation of measures to improve water management in the catchment. This test of the CATCH model showed it to be a dynamic and flexible tool, useful for structuring and guiding the participation process, without imposing undue restrictions on influencing the outcome of stakeholder participation in a small catchment.