Analysis of costs and benefits of nitrogen use in European agriculture

Transcription

1 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 Bilthoven 2 1

2 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 ( ; RIVM) EU and global scale ( ; PBL) Manager (RIVM; ) Evaluation of Dutch fertilizer manure policy ( ) Integrated nitrogen assessments (ENA, ONW; ) Assessment sustainability of agro-food systems ( ) 3 Nitrogen Cascade (DPSIR) Multiple: -Sources -Forms -Routes -Impacts 4 2

3 The state of nature in the EU is disquieting: N key pollutant, Agriculture dominant source 5 EEA the European environment state and outlook 2015 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 6 3

4 Diversity of farming in EU27 7 European land use Mha grassland 121 Mha arable land 14 Mha permanent cropland 8 4

5 Large variation livestock density Livestock Units/ha (2005) < Nitrogen input and surplus 10 5

6 N balance: potential N loss to the environment Europe only world region with decreasing N surplus agriculture since Nitrogen flows in agricultural sector EU27 in 2005 Nitrogen Use Efficiency=22% 12 6

7 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 13 THE COST OF N POLLUTION 14 7

8 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.. External Water management Rural landscapes Soil conservation.. Costs Labour Capital Inputs Fertilizer Feed Pesticides. Environmental pollution (N, P,.) Biodiversity loss Antibiotic resistance Soil degradation 15 Environmental impacts of nitrogen NOx-air NH 3 -air N (NO 3 )-water N 2 O-air Human health Ecosystems Climate Cara, Cancers mainly via ozone Cara, Cancers?weak causality? Cancer (colon)?weak epidemiology? Skin cancer, cataract Eutrophication Acidification Eutrophication Acidification Aquatic Eutrophication one molecule of N-emission has multiple impacts cascade Warming-Cooling?Carbon-sequestration??cooling particles? Warming-Cooling?Carbon-sequestration??cooling particles? Cooling?Carbon-sequestration? Warming 8

9 Principal steps of an impact pathway analysis 17 EXTERNE (2005) Dose-response functions for N impacts Air pollution impacts on human health ExternE used Doseresponse functions for NO x, SO 2, Particulate Matter (PM) and O 3 that are linear without threshold (PM: includes secondary PM like ammonia aerosols) 18 Health benefits EXTERNE (2005) 9

10 Health risks nitrate in drinking water: Linear with threshold - Many confounding factors Threshold: 5 mg NO 3 -N 25 mg NO 3 EU standard 50 mg NO 3 De Roos et al, 2003; Grinsven et al Example response curve ecosystem damage %habitat damage, based on critical load exceedance Heathland, Acid grassland Calcareous grassland Raised and blanket bogs Coniferous and Decidous woodland 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 Jones et al (2013) 20 10

11 N- COSTING Can we put a price tag on N- pollution and N-emissions? 21 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

12 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 23 N-Cost = Price x Emission Health Ecosystem Climate Total euro/kg N r euro/kg N r euro/kg Nr euro/kg N r NO x -N to air NH 3 -N to air N r to water N 2 O-N to air Emission EU27 X Year 2008 Mton (Tg) NO x -N to air 3.2 NH 3 -N to air 3.1 N r to water 4.6 N 2 O-N to air

13 N benefits farm & food Crop production (food production and security) N benefits cereal production Emission EU27 Year 2008 Mton (Tg) N-fertilization 14.1 euro/kg Nr Unit benefit Food economy (multiplier 2-3 on benefits farm economy) 25 Costs and benefits of N EU27 in 2008 Agricultural sources N pollution cost: billion euro/yr euro/capita 0.3-3% GDP loss N crop benefits farm: billion euro/yr Large uncertainties (Grinsven et al, 2013) 26 13

14 Benefits primary agriculture + agrofood industry ENA 2011, GTAP 27 Cost agriculture 2008 per capita: ammonia emission and N leaching 28 14

15 Cost agriculture 2008: per capita or per hectare? 29 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%? GDP Index 2013: EU28=

16 WTP survey clean Baltic: results change over time 31 (SEPA, 2008; Ahtiainen et al, 2012) WTP and main concerns EU citizens 32 Eurobarometer 2015; EC,

17 Main concerns are water and air ( N) pollution 33 Eurobarometer 2014, EC, 2015 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. Communicate relevance of N pollution 2. Find optimum level of mitigation (incl. pollution swapping) 3. Find optimum level of N-fertilization 4. Find optimum spatial configuration of N polluting activities 5. Put a price tag on N impact of food items true pricing 34 17

18 Extensification of N use, relocation of cereal production OPTIONS FOR REDUCING N COSTS 36 N costing to determine optimum level N fertilization Farm optimum 50 kg/ha Societal optimum Yield loss 1-2 t/ha Wheat Northw. Europe 37 18

19 Can yield loss of N extensification be compensated? Yield potential (FAO GAEZ) FAOstat & EFMA, Yield loss in NW EU (1-2 ton/ha) can be compensated by closing yield gaps C+E+S Current N (Mt/yr) 39 19

20 Welfare gain when transferring part of N benefits and cost from NW EU to C, E and S EU smart intensification and extensification 40 Relocation of livestock production OPTIONS FOR REDUCING N COSTS 41 20

21 Current pig densities 42 Sows, 2013; Eurostat, 2014 All pigs, 2008; Eurostat Share of pig production in external N cost agriculture: Generally small, except in hotspots 43 21

22 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 44 (Submitted to LUP) 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 48 22

23 Changing diets OPTIONS FOR REDUCING N COSTS 49 Changing protein sources saves feed, N and land 50 Sources: ENA, 2011, Protein Puzzle, PBL,

24 Effects of halving Europe s meat and dairy intake Natural Other Fodder Managed grassland crops land arable on arable grassland Cereals Energy crops Total Land use agriculture in EU (Million hectare) Reference ( % all meat and dairy High prices scenario Greening scenario % 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 51 Westhoek et al., 2014 Effects of halving Europe s meat and dairy intake on the N balance and N losses Fertilizer Manure Total input Crop removal (Gg) N surplus NH3 loss N leaching +runoff Reference (2004) % meat & dairy: Greening scenario Reduction of N emissions by 40% 52 Westhoek et al.,

25 Price tagging N demanding food items Steak Chicken Breast Supermarket price: 7 N-cost: 1.9 True cost = 8.9 Broccoli Supermarket price: 3 N-cost: 1.1 True cost = 4.1 Milk Supermarket price: 1.5 N-cost: 0.2 True cost = Supermarket price: 1 N-cost: 0.4 True cost = 1.4 Erisman & Bleeker, 2011 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 54 25

26 THANK YOU 55 26