The report is one of two reports that focuses on agricultural nutrient pollution, agricultural measures, and policy measures. The report focuses on the consequences of two policy scenarios, i.e. increasing the number of measures implemented to reduce nitrogen and phosphorus leaching from the agricultural sector under different policy regimes. We assess the impacts in each policy scenario and calculate crude estimates of benefits and costs. The understanding of consequences under different policy scenarios is important in order to reach environmental goals and reduce the emissions of nitrogen and phosphorus. The agricultural sector emits a substantial share of the nitrogen and phosphorus that cause eutrophication in both inland water and the sea.
The two scenarios imply that agricultural measures will be implemented either by voluntary policy measures with compensation (agri-environmental schemes) or through legislation i.e. non-voluntary. The reduction of environmental impacts are both associated with a cost to society, as well as generating benefits in the form of increases in environmental quality. From a social planner’s perspective, we want these policy measures to be implemented so that costs are smaller than the benefits they generate.
Consequences, costs, and benefits
The report shows that there are large benefits to society associated with reducing nitrogen and phosphorus emissions from the agricultural sector. The costs are smaller than the benefits in both scenarios. However, when the measures are implemented through legislation and not voluntary policy
measures, the agricultural sector carries most of the costs. In the non-voluntary scenario, the substantial increase in cost will affect the profitability of farmers relatively more. The distributional aspect makes the non-voluntary scenario less appealing. Additionally, it can prevent the possibility of reaching other goals
connected to the agricultural sector.