Economic Linkages Driving the Potential Response to Nitrogen Over-Enrichment

Most public decisions ultimately have economic content. Decisions that deal with externalities, such as pollution, carry costs as well as benefits for society. Actions that mitigate nutrient over-enrichment in the Gulf of Mexico would require actions throughout the Mississippi River Basin resulting in both direct and indirect economic impacts. This paper describes and explains the economic linkages and trade-offs involved in actions that could be cost effective and meet a public goal of reducing nitrogen over-enrichment within the Mississippi River Basin. The impacts of different approaches that reduce the major source of nitrogen flows to the Gulf, nonpoint pollution from agriculture, are simulated for both source reduction and interception of nitrogen. Lessons learned include the fact that any one approach by itself has increasing marginal cost. The approaches considered have modest direct and indirect costs when only required to mitigate 20% to 25% of the nitrogen losses. Simultaneous multiple approaches appear even more attractive to induce only moderate negative impact. The impacts of mitigation are not just confined to the Mississippi River Basin but spread beyond the basin and are themselves influenced by external factors such as commodity prices and import and export markets for agricultural commodities. Success in reducing excess nitrogen flows will depend on institutional factors as well as technical efficacy. Finally, the nature of soil system sinks and the resulting long lead time likely before results might be apparent present a special obstacle to enlisting cooperation, assessing efficacy, and designing adaptive behavior.