Costs of Reducing Nutrient Losses in Denmark - Analyses of Different Regulation Systems and Cost Effective Measures

Abstract

The economic calculations carried out prior to the Plan for the Aquatic Environment III included a comparison of regulation systems aimed at reducing nitrogen leaching, analyses of measures for reducing phosphorus losses and estimation of administrative costs. The conclusions were that taxation of the N-surplus introduced at the sector level was the most cost effective regulation when compared with administrative regulation and set a side. For phosphorus a balance between incoming and outgoing phosphorus is very costly as this requires that much slurry is transported from the western to the eastern part of Denmark. The final plan for the Aquatic Environment III from 2004 included a 13% reduction of N-leaching until 2015 based on cost effective administrative measures like wetlands and catch crops. Also a tax on mineral phosphorus in feedstuffs was included in order to half the phosphorus surplus. The measures in the Plan will have to be supplemented by more measures to meet the targets in the EU's Water Framework Directive.