The role of economics in ecosystem based management:The case of the EU Marine Strategy Framework Directive; first lessons learnt and way forward

The EU Marine Strategy Framework Directive (MSFD) sets out a plan of action relating to marine environmental policy and in particular to achieving ‘good environmental status’ (GES) in European marine waters by 2020. Article 8.1 (c) of the Directive calls for ‘an economic and social analysis of the use of those waters and of the cost of degradation of the marine environment’. The MSFD is ‘informed’ by the Ecosystem Approach to management, with GES interpreted in terms of ecosystem functioning and services provision. Implementation of the Ecosystem Approach is expected to be by adaptive management policy and practice. The initial socio-economic assessment was made by maritime EU Member States between 2011 and 2012, with future updates to be made on a regular basis. For the majority of Member States, this assessment has led to an exercise combining an analysis of maritime activities both at national and coastal zone scales, and an analysis of the non-market value of marine waters. In this paper we examine the approaches taken in more detail, outline the main challenges facing the Member States in assessing the economic value of achieving GES as outlined in the Directive and make recommendations for the theoretically sound and practically useful completion of the required follow-up economic assessments specified in the MSFD

Regionally extended shared socioeconomic pathways for the offshore wind industry in Finland

Offshore wind energy is increasingly becoming an important part of European and global low-emission power systems. The aims of this paper are to create a shared understanding on the major drivers of offshore wind development in Finland and to explore how these drivers, and opportunities for the entire industry, may develop over the twenty-first century, under different global futures. This research develops extended shared socioeconomic pathway (SSP) narratives for the offshore wind industry by using a virtual participatory workshop with expert stakeholders. According to our results, the five key drivers shaping the prospects of offshore wind development are public acceptability of offshore energy, global and national demand for low-emission energy, technological development and relative competitiveness of offshore energy, availability of space and wind resources, and energy markets and transmission infrastructure. Nationally extended SSP narratives, building on these key drivers, describe a wide range of alternative future risks and opportunities for developing offshore energy. Under sustainable development (SSP1), offshore wind is likely to soon become a major source of energy in the area, if developed in a balanced manner alongside other uses of the marine space. Under fossil-fuelled development (SSP5), offshore wind grows slower and may experience rapid uptake only in the latter half of the century. Under the regional rivalry scenario (SSP3), the need for local energy sources drives the national energy policies and may create new opportunities for offshore wind. Under the inequality scenario (SSP4), local municipalities and the residents decide on locations of new wind turbines and the overall magnitude of future offshore wind.Peer reviewe

Combating eutrophication in coastal areas at risk for oil spills

In this study we evaluate the profitability of nutrient abatement measures in eutrophied coastal areas exposed to a risk of frequent oil spills. The case studied is the Gulf of Finland, which forms part of the Baltic Sea.We present a dynamic model that integrates land loads of nitrogen and phosphorus, cost of nutrient abatement measures in agriculture, nutrient dynamics in the sea basins adjoining the Finnish coast, exogenous risk of oil spills, and recreational value of the sea, which faces environmental damage of uncertain magnitude and duration. Monte Carlo simulation is applied to evaluate the profitability of nutrient abatement measures carried out unilaterally by Finland or as a joint effort by Estonia, Finland and Russia.We demonstrate that a high exogenous risk of oil damage may render investments in nutrient abatement economically infeasible. On the other hand, several components of the model entail uncertainties owing to the scarcity of data and our limited understanding of the relationship between the ecological processes involved and the values people place on natural resources. For example, the uncertainties related to the curvature of the value function outweigh the uncertainties connected with the oil spills and their potential consequences

Dynamic phosphorus and nitrogen yield response model for economic optimisation

This paper provides an approach for modelling joint impact of two main nutrients in crop production for situations where there are available separate datasets for nitrogen and phosphorus fertiliser field experiments. Developing yield response models for Finnish spring barley crops (Hordeum vulgare L.) for clay and coarse soils and applying the models for dynamic economic analysis demonstrate the modelling approach. Model selection is based on iterative elimination from a wide diversity of plausible model formulations. Nonlinear weighted least squares method was utilised in estimation of the yield response models and dynamic programming was utilised in economic analysis. Our results suggest that fertiliser recommendations can be insufficient if soil phosphorus dynamics are ignored. Further, the optimal fertilisation rates for nitrogen and phosphorus, as well as the economic alternative costs of agri-environmental programmes depend on the soil texture of production area. Therefore, the efficiency of such programmes could be improved by targeting different fertilisation limits for different soil textures. In addition, uncertainty analysis revealed that the parameter uncertainty had a greater effect on the model output than the structural uncertainty. Further, the interaction of nitrogen and phosphorus fertilisers appeared to be a factor of relatively minor importance. The modelling approach and the model structure can be extended to other geographical areas, given that adequate datasets are available.This paper provides an approach for modelling joint impact of two main nutrients in crop production for situations where there are available separate datasets for nitrogen and phosphorus fertiliser field experiments. Developing yield response models for Finnish spring barley crops (Hordeum vulgare L.) for clay and coarse soils and applying the models for dynamic economic analysis demonstrate the modelling approach. Model selection is based on iterative elimination from a wide diversity of plausible model formulations. Nonlinear weighted least squares method was utilised in estimation of the yield response models and dynamic programming was utilised in economic analysis. Our results suggest that fertiliser recommendations can be insufficient if soil phosphorus dynamics are ignored. Further, the optimal fertilisation rates for nitrogen and phosphorus, as well as the economic alternative costs of agri-environmental programmes depend on the soil texture of production area. Therefore, the efficiency of such programmes could be improved by targeting different fertilisation limits for different soil textures. In addition, uncertainty analysis revealed that the parameter uncertainty had a greater effect on the model output than the structural uncertainty. Further, the interaction of nitrogen and phosphorus fertilisers appeared to be a factor of relatively minor importance. The modelling approach and the model structure can be extended to other geographical areas, given that adequate datasets are available

Phosphorus and Nitrogen Yield Response Models for Dynamic Bio-Economic Optimization: An Empirical Approach

Nitrogen (N) and phosphorus (P) are both essential plant nutrients. However, their joint response to plant growth is seldom described by models. This study provides an approach for modeling the joint impact of inorganic N and P fertilization on crop production, considering the P supplied by the soil, which was approximated using the soil test P (STP). We developed yield response models for Finnish spring barley crops (Hordeum vulgare L.) for clay and coarse-textured soils by using existing extensive experimental datasets and nonlinear estimation techniques. Model selection was based on iterative elimination from a wide diversity of plausible model formulations. The Cobb-Douglas type model specification, consisting of multiplicative elements, performed well against independent validation data, suggesting that the key relationships that determine crop responses are captured by the models. The estimated models were extended to dynamic economic optimization of fertilization inputs. According to the results, a fair STP level should be maintained on both coarse-textured soils (9.9 mg L-1 a(-1)) and clay soils (3.9 mg L-1 a(-1)). For coarse soils, a higher steady-state P fertilization rate is required (21.7 kg ha(-1) a(-1)) compared with clay soils (6.75 kg ha(-1) a(-1)). The steady-state N fertilization rate was slightly higher for clay soils (102.4 kg ha(-1) a(-1)) than for coarse soils (95.8 kg ha(-1) a(-1)). This study shows that the iterative elimination of plausible functional forms is a suitable method for reducing the effects of structural uncertainty on model output and optimal fertilization decisions.Peer reviewe

Crop production, water pollution, or climate change mitigation—Which drives socially optimal fertilization management most?

We introduce a multistep modeling approach for studying optimal management of fertilizer inputs in a situation where soil nitrogen and carbon dynamics and water and atmosphere externalities are considered. The three steps in the modeling process are: (1) generation of the data sets with a detailed simulation model; (2) estimation of the system models from the data; (3) application of the obtained dynamic economic optimization model considering inorganic and organic fertilizer inputs. We demonstrate the approach with a case study: barley production in southern Finland on coarse and clay soils. Our results show that there is a synergy between climate change mitigation and water protection goals, and a trade-off between pollution mitigation and crop production goals. If a field is a significant source of greenhouse gas (GHG) emissions and an insignificant source of water pollution, atmospheric externalities dominate the water externalities, even for a relatively low social cost of carbon (SCC). If a field is a significant source of water pollution, the SCC would have to be very high before atmospheric externalities dominate water externalities. In addition, an integrated nutrient management system appears better than a system in which only inorganic or organic fertilizer is used, although manure is not a solution to agriculture's GHG emissions problem. Moreover, GHG emissions and nitrogen and carbon leaching mitigation efforts should first be targeted at coarse soils rather than clay soils, because the marginal abatement costs are considerably lower for coarse soils.Peer reviewe

An integrated simulation model to evaluate national policies for the abatement of agricultural nutrients in the Baltic Sea

This study introduces a prototype model for evaluating policies to abate agricultural nutrients in the Baltic Sea from a Finnish national point of view. The stochastic simulation model integrates nutrient dynamics of nitrogen and phosphorus in the sea basins adjoining the Finnish coast, nutrient loads from land and other sources, benefits from nutrient abatement (in the form of recreation and other ecosystem services) and the costs of agricultural abatement activities. The aim of this study is to present the overall structure of the model and to demonstrate its potential using preliminary parameters

A dynamic model to analyze the sustainability of extensive common-pasture-based livestock husbandry in Sahel

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