Optimal Environmental Policy for a Mine Under Polluting Waste Rocks and Stock Pollution

This study analyzes socially optimal environmental policy for a mine with a model that takes into account waste or waste rock production and abatement possibilities of the mine. We develop a model, in which the mine produces an externality related to the waste rocks, such as acid mine drainage. We find that the extraction rate tends to be lower in a mine with higher waste rock production, and that the optimal tax on the waste rock production is strictly increasing in time. We extend the model to incorporate an additional externality in the form of a stock pollutant. We analyze the optimal taxes and show that the typical result that the time path of the tax on the stock pollutant is inverted U-shaped may be lost in a mine model with abatement possibility and fixed operation period.Peer reviewe

Climate and water quality policy design for agriculture with environmental co-benefits

Peer reviewe

Monetary value of urban green space as an ecosystem service provider : A case study of urban runoff management in Finland

The predicted increase in the number of urban flood events can result in substantial monetary losses to society. These costs may be alleviated by preserving ecosystem services, such as urban runoff management. We studied the monetary value of this ecosystem service by applying the replacement cost method in six catchments with varying land-use intensities in two cities in Finland. The economic analysis was based on metric data of urban runoff generation, provided by automatic monitoring stations in the catchments. A hydrological model was applied to estimate evaporation from impervious surfaces, and to simulate runoff in the catchments. Our results suggest that leaving green space unconstructed results in significant monetary savings. The cost of managing runoff correlated with land-use intensity. The ecosystem service value (ESV) was generally higher in catchments with high land-use intensity, low proportion of green space, and high costs of runoff management. Depending on the degree of imperviousness, the ESV ranged from 90,000–270,000 € ha−1. Further, our results suggest that estimates of runoff generation and evaporation are key hydrological factors for assessing ESV. Our study demonstrates how the combination of field data and hydrological and monetary analyses can support regional planning in cold climates.Peer reviewe

Does crop rotation with legumes provide an efficient means to reduce nutrient loads and GHG emissions?

We investigate crop rotation with legumes from economic and environmental perspectives by asking how effective they are at providing profits and reducing nutrient runoff and greenhouse gas emissions compared with monoculture cultivation. We study this effectiveness in three alternative policy regimes: the free market optimum, the Finnish agri-environmental scheme, and socially optimal cultivation, and also design policy instruments to achieve the socially optimal outcomes in land use and fertilization. We first develop an analytical model to describe crop rotation and the role of legumes, and examine its implications for water and climate policies. Drawing on Finnish agricultural data, we then use numerical simulations and show that shifting from monoculture cultivation to crop rotation with legumes provides economically and environmentally better outcomes. Crop rotation with legumes also reduces the variability in profits caused by stochastic weather. The optimal instruments implementing the social optimum depend on nutrient and climate damage (nitrogen tax), as well as carbon sequestration and nutrient reduction benefits (buffer strip subsidy).Peer reviewe