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Environmental economic research as a tool in the protection of the Baltic Sea

Costs and benefits of reducing eutrophication

image of Environmental economic research as a tool in the protection of the Baltic Sea

This report reviews the findings of an ecological/economicanalyses regarding the on-going and prospective effortsto reduce eutrophication of the Baltic Sea, conducted byBalticSTERN, an international research network. The results indicate that the overall benefits of fulfillingthe targets of the HELCOM Baltic Sea Action Plan (BSAP)clearly outweigh their aggregate costs, suggesting thatthe BSAP is an economically sound plan for solvingthe transboundary eutrophication problem. The cost ofinaction - not implementing the objectives of the BSAP -would be significant.

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Cost-effective reductions of nutrients to the Baltic Sea

The costs of achieving the nutrient load reduction to the Baltic Sea required by the BSAP2007 have been estimated using two Baltic-wide cost-minimization models: BALTCOST and the MTT cost model. The total cost of reducing nutrient loads from the level observed in 1997–2003 to meet the targets of the BSAP is estimated to be EUR 4.6 billion/yr. This result is well in line with the earlier cost estimates of EUR 4.2–4.5 billion/yr. The load reduction in the period 2004–2008 reduced the necessary load reductions, and the costs of meeting these BSAP target levels are significantly lower, between EUR 1.4 and 2.8 billion/yr. Sensitivity analysis indicates that the use of assumptions on retention from previous studies might underestimate the costs compared to the more realistic modeling of retention in the BalticSTERN models. The sensitivity analysis also indicates that simplifying the assumptions of baseline agricultural production might overestimate the costs, and detailed spatial information is therefore recommended. 3. Cost-effective reductions of nutrients to the Baltic Sea 3.1 Introduction As mentioned in chapter 2, HELCOM’s Baltic Sea Action Plan from 2007 sets maximum allowable inputs of nutrients to each sea basin of the Baltic Sea (HELCOM 2007, HELCOM 2013). Huge efforts with potentially significant economic costs are required to fulfill the required nutrient load reductions, and careful minimization of the costs is therefore socially desirable. One of the objectives of this report is to transfer knowledge from researchers to decision makers on cost-effective nutrient abatement solutions for the Baltic Sea, and the aim of this chapter is to present, analyze, and discuss recent cost-effectiveness analyses and results, with special emphasis on the analyses performed by the BalticSTERN network in 2010–2013. The aim of the cost studies and model assessments of the Baltic is to: ? identify least cost solutions and the minimum total costs in achieving the BSAP

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