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Analysis of costs
and benefits of
nitrogen use in
European
agriculture
implications for intensity
and spatial configuration
Vienna AAoS | November 6, 2015 |
Hans van Grinsven
1
What is PBL?
 National institute for strategic policy analysis in the field of
environment and spatial planning
 Solicited and unsolicited outlook studies, analyses and
evaluations in which an integrated approach is paramount
 Dutch government, EU, OECD, UNEP, IPCC
 Policy relevance, independency and scientific rigor
The Hague
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Bilthoven
Vienna AAoS | November 6, 2015 | Hans van Grinsven
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Who is me?
 Soil chemistry and physics – Wageningen UR (1982)
 PhD ‘Impacts acid rain on soils’ – Wageningen UR (1988)
 Modelling & budgetting nutrients in agriculture
– National scale (1988-1999; RIVM)
– EU and global scale (2008-..; PBL)
 Manager (RIVM; 1999-2003)
 Evaluation of Dutch fertilizer–manure policy (2002-..)
 Integrated nitrogen assessments (ENA, ONW; 2008-..)
 Assessment sustainability of agro-food systems (2010-..)
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Vienna AAoS | November 6, 2015 | Hans van Grinsven
Nitrogen
Cascade
(DPSIR)
Multiple:
- Sources
- Forms
- Routes
- Impacts
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The state of nature in the EU is disquieting:
N key pollutant, Agriculture dominant source
EEA the European environment state and outlook 2015
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Content
 Introduction
– European agriculture and N use and N losses
 The cost of N pollution
– Concept
– Costs and benefits of N use in EU agriculture
 Options for reducing N costs
– Extensification of N use; relocation of cereal production
– Relocation of livestock production
– Changing diets
 Conclusions
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Diversity of farming in EU27
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European land use 2005
55 Mha grassland
121 Mha arable land
14 Mha permanent cropland
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Large variation livestock density
Livestock Units/ha (2005)
<1
1-3
3-5
≥5
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Nitrogen input and surplus
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N balance: potential N loss to the environment
Europe only world region with
decreasing N surplus agriculture
since 1980
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Nitrogen flows in agricultural sector EU27 in 2005
Nitrogen Use Efficiency=22%
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Exceedance in 2008
of the critical N deposition for protection of
95% of terrestrial ecosystems (left), and of the critical NO3 limit (25 mg/L) in
leaching water (right) for protection of aquatic ecosystems and drinking water
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THE COST OF N
POLLUTION
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Internal - external costs and benefits agriculture
Externalities: cost/benefit not reflected in market price of goods or
services; not/partly on the price tag. Agriculture has many externalities
Internal
Benefits
•
•
•
•
Food
Fibers
Fuels
…..
Costs
• Labour
• Capital
• Inputs
•
•
•
•
Fertilizer
Feed
Pesticides
….
External
•
•
•
•
Water management
Rural landscapes
Soil conservation
…..
• Environmental
pollution (N, P, ….)
• Biodiversity loss
• Antibiotic resistance
• Soil degradation
• ……
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Environmental impacts of nitrogen
Human health Ecosystems
Cara, Cancers Eutrophication
mainly via ozone
Acidification
Cara, Cancers Eutrophication
NH3-air
?weak causality?
Acidification
Aquatic
N (NO3)-water Cancer (colon)
?weak epidemiology?
Eutrophication
Skin cancer,
N2O-air
cataract
NOx-air
Climate
Warming-Cooling
?Carbon-sequestration?
?cooling particles?
Warming-Cooling
?Carbon-sequestration?
?cooling particles?
Cooling
?Carbon-sequestration?
Warming
one “molecule” of N-emission has multiple impacts – “cascade”
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Principal steps of
an impact
pathway analysis
EXTERNE (2005)
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Dose-response functions for N impacts
 Air pollution impacts on
human health
 ExternE used Doseresponse functions for NOx,
SO2, Particulate Matter (PM)
and O3 that are
 linear without threshold
 (PM: includes secondary
PM– like ammonia aerosols)
Health benefits
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EXTERNE (2005)
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Health risks nitrate in drinking water:
Linear with threshold - Many confounding factors
Threshold:
5 mg NO3-N

25 mg NO3
EU standard
50 mg NO3
De Roos et al, 2003; Grinsven et al. 2008
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%habitat damage, based on critical load exceedance
Example response curve ecosystem damage
100
80
60
Heathland, Acid grassland
40
Calcareous grassland
Raised and blanket bogs
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Coniferous and Decidous woodland
0
0
10
20
30
40
50
60
Mean UK nitrogen deposition
Non linear and with Threshold: Critical N load (10 kg N ha-1 yr-1)
External cost based on critical load exceedance
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Jones et al (2013)
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N- COSTING
Can we put a price tag on Npollution and N-emissions?
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The economic value of N damage in ENA (2011)
Standard economic concepts and methods for valuation
Key is willingness to pay approach (WTP)
 Health impacts
–
–
–
–
Costs of medical treatment
Lost labor productivity
Reduction of risk of premature death (WTP)
Reduction pain and suffering (WTP)
 Ecosystems impacts
– WTP to prevent or restore damage
 Climate impacts
– WTP to reduce greenhouse gas emissions.
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Calculation of cost of N pollution
1. Determine the societal cost of N related impact (WTP)
2. Determine the contribution of N to impact
3. Determine cost per unit of N emission for impact (UC)
– UC = [Result 1] x [Result 2] / [N emission]
4. Extrapolate to determine N costs, eg.
–
–
–
–
Change of N emissions
For other regions
Express as total per country or region
Per cap, per ha, % of GDP for comparing regions
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N-Cost = Price x Emission
Health
Ecosystem
Climate
Total
euro/kg Nr
euro/kg Nr
euro/kg Nr
euro/kg Nr
NOx -N to air
10-30
2-10
-9 - 2
3-42
NH3-N to air
28--20
2-10
-3 - 0
Nr to water
0-4
5-20
N2O-N to air
1-3
1-30
5-24
4-17
5-20
Emission EU27
X
24
Year 2008
Mton (Tg)
NOx -N to air
3.2
NH3-N to air
3.1
Nr to water
4.6
N2O-N to air
0.8
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N – benefits farm & food
 Crop production (food production and security)
N benefits cereal production
Emission EU27
Year 2008
N-fertilization
Mton (Tg)
14.1
euro/kg Nr
Unit benefit
1.5-5
 Food economy (multiplier 2-3 on benefits farm economy)
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Costs and benefits of N EU27 in 2008
Agricultural sources
N pollution cost:
35-230 billion euro/yr
75-465 euro/capita
0.3-3% GDP loss
N crop benefits farm:
20-80 billion euro/yr
Large uncertainties
(Grinsven et al, 2013)
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Benefits primary agriculture + agrofood industry
ENA 2011, GTAP
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Cost agriculture 2008 per capita:
ammonia emission and N leaching
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Cost agriculture 2008: per capita or per hectare?
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Willingness to Pay is controversial concept
WTP results per country
Depends on
- Citizen awareness
- Problem framing
- Gross Natl Income
In EU and US maximum WTP to prevent
all environmental problems 1%?
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GDP Index 2013: EU28=100
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WTP survey clean Baltic: results change over time
(SEPA, 2008; Ahtiainen et al, 2012)
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WTP and main concerns EU citizens
Eurobarometer 2015; EC, 2015
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Main concerns are water and air ( N) pollution
Eurobarometer 2014, EC, 2015
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Summarizing
 CBA is a “trick” to weigh and add up Nr emissions;
 Tool for Integrated Nitrogen Assessments
 In policy analysis complementary tool to other weighting
approaches like “Distance To Target” , “Regulatory-policy
priority” , “repair or mitigation cost effectiveness”
Supporting information to
1.
2.
3.
4.
5.
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Communicate relevance of N pollution
Find optimum level of mitigation (incl. pollution swapping)
Find optimum level of N-fertilization
Find optimum spatial configuration of N polluting activities
Put a price tag on N impact of food items – true pricing
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Extensification of N use, relocation of cereal production
OPTIONS FOR REDUCING
N COSTS
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N costing to determine optimum level N fertilization
Farm
optimum
50 kg/ha
Societal
optimum
Yield loss
1-2 t/ha
Wheat
Northw.
Europe
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Can yield loss of N extensification be compensated?
Yield potential
(FAO GAEZ)
FAOstat & EFMA,2012
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Yield loss in NW EU (1-2 ton/ha) can be
compensated by closing yield gaps C+E+S
Current N
(Mt/yr)
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Welfare gain when transferring part of N benefits
and cost from NW EU to C, E and S EU
“smart” intensification and extensification
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Relocation of livestock production
OPTIONS FOR REDUCING
N COSTS
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Current pig densities
Sows, 2013; Eurostat, 2014
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All pigs, 2008; Eurostat
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Share of pig
production in external
N cost agriculture:
Generally small, except
in hotspots
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Reducing external costs of nitrogen pollution by pig
production in the European Union by spatial relocation
Central hypothesis:
 Relocation can reduce external
costs of N pollution
Two criteria for relocation:
1. Exceedance Critical N load
2. Availability feed cereals
(Submitted to LUP)
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Conclusions
 Net reduction external N costs
only by relocation in
combination with best practices
 Several feasible options for
reducing external costs and
increasing N use efficiencies
– relocation between northwest EU
regions, (Bretagne, Denmark, the
southern Netherlands and
northwest Germany)
– often within national borders
(France, Germany)
 “Bring the pigs to the
cereals, instead of the other
way around”
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Changing diets
OPTIONS FOR REDUCING
N COSTS
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Changing protein sources saves feed, N and land
Sources: ENA, 2011, Protein Puzzle, PBL, 2011
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Effects of halving Europe’s meat and dairy intake
Natural Other Fodder Managed grass‐
arable on arable Cereals
grassland
land
crops
land
Energy crops
Total
Land use agriculture in EU (Million hectare)
21
44
19
44
60
188
High prices scenario
21
44
4
35
84
188
Greening scenario
21
44
4
44
60
Reference (2004
–50% all meat and dairy •
•
•
•
•
•
15
188
75% reduction soymeal use
Reduction land use for soymeal outside EU by 10 million ha
46% reduction in energy-rich feed imports
52% reduction in feed cereal use.
Increase in EU of consumption of food cereals
Export of cereals out of EU increases from 3 to 174 million tonnes
Westhoek et al., 2014
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Effects of halving Europe’s meat and dairy intake
on the N balance and N losses
Fertilizer Manure
Total
input
N
Crop
N
NH3 loss leaching
removal surplus
+runoff
(Gg)
Reference (2004)
–50% meat & dairy:
Greening scenario
11.3
4.6
23.1
11.8
11.3
2.8
3.3
8.0
2.4
15.7
9.0
6.7
1.6
2.0
Reduction of N emissions by 40%
Westhoek et al., 2014
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Price tagging N demanding food items
Steak
Supermarket price:
N-cost:
True cost =
Chicken
Breast
7 €
1.9 €
8.9 €
Broccoli
Supermarket price:
N-cost:
True cost =
Supermarket price:
N-cost:
True cost =
3 €
1.1 €
4.1 €
Milk
1.5 €
0.2 €
1.7 €
Supermarket price:
N-cost:
True cost =
1 €
0.4 €
1.4 €
Erisman &
Bleeker, 2011
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Conclusions
 The external cost of fertilizer and manure N use by intensive or
inefficient agriculture in EU are a major offset of welfare by
– The FE N rate in wheat could be reduced by 50 kgN/ha
 Dissemination and implementation of Best Available
Technology and Practices are effective to reduce external costs
– Eg. regarding emission reduction and feed conversion
 Extensification and spatial reconfiguration can improve balance
between internal benefits and external costs
– Policies stimulating extensification in N hotspots in NW EU and
modest intensification elsewhere
 Changing to healthy –demitarian- diets in EU alone would
reduce N emissions by ≈40%
– could save 100 mln ha of land globally
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THANK YOU
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