Optimal Abatement of Nitrogen and Phosphorus Pollution from Spring Crop Cultivation

Research output: Conference materialsAbstractResearchpeer-review

Abstract

Discrete dynamic optimization is applied to examine the difference between socially and privately optimal fertilization patterns and to develop an incentive mechanism for efficient simultaneous nitrogen (N) and phosphorus (P) loading management. The problem formulation accounts for the causal interactions between P and N fertilization, crop yield, P carry-over, and P and N loading into waterways. Our analysis shows that the balance between private and social shadow values of the P carry-over is an essential feature for the design of the input tax-subsidy scheme for both N and P. Numerical analysis carried out for spring barley on clay soils and current damage costs in Southern Finland suggests that the difference between privately and socially optimal steady-state fertilization levels is substantial. The economic losses for the producer from the tax-subsidy scheme internalizing the damage costs are in the range of 18-32% of the profits, even at simultaneously adjusted N and P fertilizer inputs. Our sensitivity analysis indicates that other abatement measures, such as catch crops, are often competitive to fertilizer input reductions. For the producer, the computed break-even level of a subsidy for catch crops is well in line with the current subsidy levels applied in Finland.
Original languageEnglish
Pages275
Number of pages1
Publication statusPublished - 10 Jan 2018
EventMaataloustieteen päivät - Viikki, Helsinki, Finland
Duration: 10 Jan 201811 Jan 2018

Conference

ConferenceMaataloustieteen päivät
CountryFinland
CityHelsinki
Period10/01/201811/01/2018

Cite this

Sihvonen, M. J., Hyytiäinen, K. P., & Valkama, E. (2018). Optimal Abatement of Nitrogen and Phosphorus Pollution from Spring Crop Cultivation. 275. Abstract from Maataloustieteen päivät, Helsinki, Finland.
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Sihvonen, MJ, Hyytiäinen, KP & Valkama, E 2018, 'Optimal Abatement of Nitrogen and Phosphorus Pollution from Spring Crop Cultivation' Maataloustieteen päivät, Helsinki, Finland, 10/01/2018 - 11/01/2018, pp. 275.

Optimal Abatement of Nitrogen and Phosphorus Pollution from Spring Crop Cultivation. / Sihvonen, Matti Juhani; Hyytiäinen, Kari Petri; Valkama, Elena.

2018. 275 Abstract from Maataloustieteen päivät, Helsinki, Finland.

Research output: Conference materialsAbstractResearchpeer-review

TY - CONF

T1 - Optimal Abatement of Nitrogen and Phosphorus Pollution from Spring Crop Cultivation

AU - Sihvonen, Matti Juhani

AU - Hyytiäinen, Kari Petri

AU - Valkama, Elena

PY - 2018/1/10

Y1 - 2018/1/10

N2 - Discrete dynamic optimization is applied to examine the difference between socially and privately optimal fertilization patterns and to develop an incentive mechanism for efficient simultaneous nitrogen (N) and phosphorus (P) loading management. The problem formulation accounts for the causal interactions between P and N fertilization, crop yield, P carry-over, and P and N loading into waterways. Our analysis shows that the balance between private and social shadow values of the P carry-over is an essential feature for the design of the input tax-subsidy scheme for both N and P. Numerical analysis carried out for spring barley on clay soils and current damage costs in Southern Finland suggests that the difference between privately and socially optimal steady-state fertilization levels is substantial. The economic losses for the producer from the tax-subsidy scheme internalizing the damage costs are in the range of 18-32% of the profits, even at simultaneously adjusted N and P fertilizer inputs. Our sensitivity analysis indicates that other abatement measures, such as catch crops, are often competitive to fertilizer input reductions. For the producer, the computed break-even level of a subsidy for catch crops is well in line with the current subsidy levels applied in Finland.

AB - Discrete dynamic optimization is applied to examine the difference between socially and privately optimal fertilization patterns and to develop an incentive mechanism for efficient simultaneous nitrogen (N) and phosphorus (P) loading management. The problem formulation accounts for the causal interactions between P and N fertilization, crop yield, P carry-over, and P and N loading into waterways. Our analysis shows that the balance between private and social shadow values of the P carry-over is an essential feature for the design of the input tax-subsidy scheme for both N and P. Numerical analysis carried out for spring barley on clay soils and current damage costs in Southern Finland suggests that the difference between privately and socially optimal steady-state fertilization levels is substantial. The economic losses for the producer from the tax-subsidy scheme internalizing the damage costs are in the range of 18-32% of the profits, even at simultaneously adjusted N and P fertilizer inputs. Our sensitivity analysis indicates that other abatement measures, such as catch crops, are often competitive to fertilizer input reductions. For the producer, the computed break-even level of a subsidy for catch crops is well in line with the current subsidy levels applied in Finland.

M3 - Abstract

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Sihvonen MJ, Hyytiäinen KP, Valkama E. Optimal Abatement of Nitrogen and Phosphorus Pollution from Spring Crop Cultivation. 2018. Abstract from Maataloustieteen päivät, Helsinki, Finland.