Water quality trading markets: Integrating land and marine based measures under a smart market approach
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Water quality trading markets : Integrating land and marine based measures under a smart market approach. / Filippelli, Raphael; Termansen, Mette; Hasan, Syezlin; Hasler, Berit; Hansen, Line; Smart, James C.R.
I: Ecological Economics, Bind 200, 107549, 2022.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - Water quality trading markets
T2 - Integrating land and marine based measures under a smart market approach
AU - Filippelli, Raphael
AU - Termansen, Mette
AU - Hasan, Syezlin
AU - Hasler, Berit
AU - Hansen, Line
AU - Smart, James C.R.
N1 - Publisher Copyright: © 2022
PY - 2022
Y1 - 2022
N2 - Implementation of effective policy instruments to reduce emissions from non-point agricultural sources has been challenging. Mussel farming has the potential to mitigate diffuse nitrogen losses from agricultural production, and a Water Quality Trading Market (WQTM) between agricultural and mussel farmers could potentially be an efficient mechanism. We simulate a hypothetical WQTM in a catchment in northern Denmark using a relatively new approach referred to as a smart market for water quality. Building on previous work, we integrate mussel farmers as nitrogen permit sellers in a WQTM involving agricultural farmers and analyze the effect of the market on the cost of meeting water quality improvement targets. In addition, we set-up scenarios with decreasing levels of participation by agricultural farmers (−10%, −20% and − 30%). The results show a clear benefit from allowing trading between agricultural and mussel farmers, reducing the total costs by as much as 11.9%. Lower participation results in reductions in the benefits from trade. However, allowing mussel-based mitigation to supply N permits at modest cost can potentially partially circumvent the well-documented challenge that agricultural farmers are reluctant to act as N permit suppliers in WQTMs. The study illustrates the economic and environmental potential of integrating land- and marine-based farmers in a joint policy scheme to reduce nitrogen emissions to coastal and marine areas.
AB - Implementation of effective policy instruments to reduce emissions from non-point agricultural sources has been challenging. Mussel farming has the potential to mitigate diffuse nitrogen losses from agricultural production, and a Water Quality Trading Market (WQTM) between agricultural and mussel farmers could potentially be an efficient mechanism. We simulate a hypothetical WQTM in a catchment in northern Denmark using a relatively new approach referred to as a smart market for water quality. Building on previous work, we integrate mussel farmers as nitrogen permit sellers in a WQTM involving agricultural farmers and analyze the effect of the market on the cost of meeting water quality improvement targets. In addition, we set-up scenarios with decreasing levels of participation by agricultural farmers (−10%, −20% and − 30%). The results show a clear benefit from allowing trading between agricultural and mussel farmers, reducing the total costs by as much as 11.9%. Lower participation results in reductions in the benefits from trade. However, allowing mussel-based mitigation to supply N permits at modest cost can potentially partially circumvent the well-documented challenge that agricultural farmers are reluctant to act as N permit suppliers in WQTMs. The study illustrates the economic and environmental potential of integrating land- and marine-based farmers in a joint policy scheme to reduce nitrogen emissions to coastal and marine areas.
KW - Farmer participation
KW - Mussel farming
KW - Non-point pollution
KW - Water quality trading
U2 - 10.1016/j.ecolecon.2022.107549
DO - 10.1016/j.ecolecon.2022.107549
M3 - Journal article
AN - SCOPUS:85134807571
VL - 200
JO - Ecological Economics
JF - Ecological Economics
SN - 0921-8009
M1 - 107549
ER -
ID: 318430506