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Research agenda

Policy tools for Baltic Sea nutrient management

Annex III (part 2) of the Helsinki Convention provides a list of measures for reducing plant nutrients, which signatories agreed to in the late 1990’s. In 2013 a HELCOM ministerial declaration committed to introduce nutrient bookkeeping by 2018, including guidelines for nutrients in manure, and for targeted reductions, e.g. from intensive livestock farms. While it is up to individual countries to implement such policy measures in national legislation, eight of nine Baltic Sea countries are subject to a range of EU regulations, some of which underpin while others complement HELCOM agreements.

According to HELCOM’s second holistic assessment the aggregate nutrient loads to the Baltic Sea have been reduced by 13 per cent for nitrogen to 2014 and 19 per cent for phosphorus since the reference period 1997-2003, but despite improvements virtually the entire Baltic Sea (97%) suffers from eutrophication. Country allocated reduction targets reflect the significance of loads from Eastern countries, which with a vast territory of farmland within the catchment area is responsible for the greater share of the HELCOM reduction requirements for achieving the maximum allowable inputs of nitrogen and phosphorus to the Baltic Sea. Still, according to Eurostat the nutrient balances in Germany and Denmark were in 2013 with 87 kgN/ha per hectar of utilized agricultural area well above both Poland (55 kgN) and the three Baltic countries, where nitrogen balances are less than half of Poland’s. Still, due to the direct and local nutrient impacts in the coastal zones – e.g. Riga bay – there is no linear relationship between farmland applications and ecosystem health. Recent modelling of nutrient flows in the Baltic Sea has suggested that while phosphorus is a long-lived pollutant that mixes over long distances in the marine environment, the riverine nitrogen nutrients sequester mainly in the coastal rim (Radtke et al., 2012).

The policy instrument literature distinguishes between informational, legal and economic policy instruments (OECD, 2012). The HELCOM agreed measures do not by definition fall in any specific category, as they are technical measures which can be enforced by any choice of policy instrument. Countries have switched between all three typologies of policy instruments, as they have been designing nutrient abatement policies, alternating mostly between informational and legal approaches, but also in some instances resorting to economic policy instruments. A Nordic Council report provides a benchmark for the mid-1990’s, and observes that despite similarities in the technical measures adopted in Nordic countries, the corresponding policy instruments differ substantially as to their legal, economic or informational nature (Weber, 1993).

Various comparative studies have researched designs and choices of policy instruments for nutrient management in the Baltic Sea Region. Eckerberg et al. (1994) covered transitions in Baltic countries along with analysis of institutional questions and policy instruments in Nordic countries, whereas Löwgren and Hjorth (1994) published a broader comparative analysis of surface water policies in Poland and Sweden. A comparative study of nutrient policies and their effectiveness in some countries beyond the region was published by OECD (Andersen 2003; 2004), covering USA, Australia, Korea, Netherlands and Denmark.

The persistence of institutional differences and implications for policy instruments was recently demonstrated in Thorsøe et al. (2017), who surveyed nutrient management in seven EU Member States, including Poland, Germany and Sweden, extending previous work by COWI (2016). Implementation of the rural development program, including auditing, sanctions and the extent to which policy measures are targeted and tailored to local circumstances are seen to differ with national policy styles. These findings are in line with a recent study for the European Commission (Sarteel et al. 2016), which argues that there is no one size to fit all countries, due to basic differences not merely in agricultural structures and geology but equally importantly in the set-up of administrative institutions (Vesterager et al., 2016). Moreover, Hellsteen et al. (2017) observe vivid differences in the engagement of stakeholders even within Nordic countries, while active involvement is essential to give meaning to policy measures locally.

The BalticSTERN report to HELCOM has presented an assessment of the economic costs of meeting reduction targets, based on a coupled ecological-economic model, suggesting annual costs of up to 2,800 M€ (Hyytiäinen, 2014). It is sensitive to a range of assumptions, some of which are restrictive, but as the authors note ‘increasing flexibility…can be a way to reduce costs even further’, although the precise biophysical mechanisms linking agricultural activities to pollutant levels are complex and imperfectly understood (Ahlvik et al. 2014). The menu of farming nutrient measures included in the BalticSTERN modelling are mainly end-of-pipe solutions (wetlands, catch crops, buffer strips etc) or outright restrictions in farm production (less livestock and mineral fertilizers) (cf. Rockström et al. p. 51). The transport costs for shifting manure to areas where it can substitute mineral fertilizers are critical even in areas with the lowest labor and fuel costs (Briukhanov et al., 2014), which might be mitigated via upgrading in biogas plants and extended value chains from manure processing in biorefineries.

Estimations of the possible aggregate costs provide significant information to decision makers for splitting the reduction burdens between countries. However, it is important to maintain a broader perspective on the synthesis and knowledge assessment with regard to policy instruments and governance institutions, in order to provide stimuli to innovative policy measures for future policy-making purposes within countries and locally that can make a real difference.

In this respect, results based payment schemes have now been shown to be feasible for providing farmers with the necessary incentives to seek out innovative and dynamically cost-effective abatement measures (Sidomo-Holm 2017). Positive interaction between nutrient abatement policy and other policy schemes, particularly payments of EU Common Agricultural Policy (CAP), is crucial to developing effective policy responses. For instance in a new study it is shown that direct payments increase nutrient surpluses rather than moderating them, which is a serious problem considering that 80 per cent of the approximately €41 billion paid annually to the EU’s farmers is dispersed in the form of direct payments (Brady et al. 2017).

The European Court of Auditors (ECA) in their recent special report “Combating eutrophication in the Baltic Sea: further and more effective action needed” (2016) highlights, that funding available in 2013-2020 for rural development measures, including for water protection, amounts to €9.9 billion. Still, none of three surveyed Member States (Poland, Latvia, Finland) had prioritized grants for improved manure storage facilities to farms with high livestock intensity or located in nitrate vulnerable zones or in areas with poor water quality. Furthermore, seven of the EU Member States bordering the Baltic Sea had not included the ‘payments linked to the water framework directive’ measure in their Rural Development Programs, neither in 2007-2013 nor from 2013-2020, whereby financial support was forfeited (ibid. 41). This support mechanism is available for supplementary measures compulsory to farmers in areas identified in the river basin management plans. ECA points to the need for improved governance mechanisms to improve on sectoral integration.

References:                                      

  • Ahlvik L, Ekholm P, Hyytiäinen K, Pitkänen H., et al., 2014.  An economic-ecological model to evaluate impacts of nutrient abatement in the Baltic Sea, Environmental Modelling & Software 55 (2014) 164-175.
  • Andersen, M.S., 2003. The effect of manure management regulations on international competitiveness. pp. 129-146 in: Agriculture, Trade and the Environment. The pig sector. Paris: OECD Directorate for Food, Agriculture and Fisheries.
  • Andersen, M.S., 2004. The effect of manure management regulations on competitiveness. In: OECD: Agriculture, Trade and the Environment: The Dairy Sector. OECD Directorate for Food, Agriculture and Fisheries. Pp. 175-196. 2004.
  • Brady, M., Hristov, J., Sahrbacher, A., Schläpfer, F., 2016. Impacts of the CAP’s environmental policy instruments on farm structures, agricultural incomes and public goods, MULTAGRI Policy Brief 02:16.
  • Brady, M., J. Hristov, Sören Höjgård, T. Jansson, H. Johansson, C. Larsson, I. Nordin and E. Rabinowicz (2017). Impacts of Direct Payments – Lessons for CAP post-2020 from a quantitative analysis, Rapport 2017:2 Lund: AgriFood Economics Center (In press).
  • Brady, Sahlin, U., Clough Y et al., 2017. Report on ecological-economic models and evaluation of effects of ecological intensification on farm income. LIBERATION project Deliverable 5.4.
  • Briukhanov, A., D. Maksimov, H. Huhta, E. Vasilyev , Е. Shalavina, V. Minin, I. Subbotin., N. Kozlova, А. Volkov, А. Ogluzdin, P. Slobodianiuk, R. Uvarov, 2014. BASE project 2012-2014: Preparation of Long-Term Manure Management Plan for Kaliningrad Region. Helsinki: HELCOM.
  • COWI, 2015. Vækst- og nabotjek af miljøregulering og kontrol af primærjordbruget. NATURERHVERVSTYRELSEN, MILJØSTYRELSEN OG NATURSTYRELSEN
  • Eckerberg K et al., 1994. Comparing Nordic and Baltic countries - environmental problems and policies in agriculture and forestry, Tema-Nord 1994:572, Copenhagen: Nordic Council of Ministers.
  • The European Court of Auditors (ECA), 2016. Combating eutrophication in the Baltic Sea: further and more effective action needed, Special Report no. 3. Luxembourg: Publications Office of the European Union.
  • HELCOM, 2017a. First version of the ‘State of the Baltic Sea’ report (June 2017) to be updated 2018, Helsinki.
  • HELCOM, 2017b. http://helcom.fi/news/Pages/HELCOM-reviews-new-data-on-nutrient-input-sources-while-continuing-work-on-litter-and-sewage-sludge.aspx
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  • Löwgren, M. and Hjorth, R., 1994. Environmental policies in Poland, Sweden and the Netherlands, Tema Vatten Report 19, Linköping University.
  • OECD, 2012. Water quality and agriculture: Meeting the poliy challenge, Paris. 155 p.
  • Radtke, H., Neumann, T., Voss, M. and W. Fennel, W., 2012. Modeling pathways of riverine nitrogen and phosphorus in the Baltic Sea, JOURNAL OF GEOPHYSICAL RESEARCH, VOL. 117, C09024.
  • Rockström et al., 2013. BalticSTERN (2013) The Baltic Sea – Our Common Treasure. Economics of Saving the Sea. Report 2013:4, The Swedish Agency for Marine and Water Management.
  • Sarteel M., C. Tostivint, A. Landowski, C. Basset, K. Muehmel, S. Lockwood, H. Ding, N. Oudet, S. Mudgal, V. Cherrier, B. Grebot, S. Naumann, E. Dooley, E. Lukat, A. Frelih-Larsen, S. Wunder, M.S. Carter, P. Ambus, G. Provolo, T.D. Koeijer, V. Linderhof, R. Michels (2016) Resource efficiency in practice : closing mineral cycles : final report. dx.doi.org/10.2779/710012  - Luxembourg : European Commission, Directorate-General for the Environment, 2016.
  • Sidomo-Holm, W., H. G. Smith and M. V. Brady, 2017. "Improving agricultural pollution abatement through result-based payment schemes." Land Use Policy, (Submitted).
  • Thorsøe, M.; Dalgaard, T.; Graversgaard, M., 2017 Nabotjek af kvælstof- og fosforvirkemidler [Neighbour check on policy instruments for nitrogen and phosphorous]. Aarhus University: DCA Rapport nr. 104. 105 pp.
  • Vesterager, Jens Peter; Frederiksen, Pia; Kristensen, Søren Bech Pilgaard; Vadineanu, Angheluta; Gaube, Veronica; Geamana, Nicoleta; Pavlis, Vangelis; Terkenli, Theano; Bucur, Magda; van der Sluijs, Theo; Busck, Anne G., 2016. Dynamics in National Agri-environmental Policy implementation under Changing EU Policy Priorities: does one size fit all? In: Land Use Policy, Bind 57, 764-776.
  • Weber, Jakob, 1993. Mod strømmen – en vurdering af styringsmidler overfor afstrømningen af næringssalte fra landbruget I de nordiske lande (Assessment of policy instruments towards leaching of nutrients from agriculture in Nordic countries], Nordiske seminar- og arbejdsrapporter 1993:565, Copenhagen: Nordic Council of Ministers.