Increasing the cost-effectiveness of water quality improvements through pollution abatement target-setting at different spatial scales

In this paper, we investigate the potential gains in cost-effectiveness from changing the spatial scale at which nutrient reduction targets are set for the Baltic Sea, focusing on nutrient loadings associated with agriculture. Costs of achieving loadings reductions are compared across five levels of spatial scale, namely the entire Baltic Sea; the marine basin level; the country level; the watershed level; and the grid square level. A novel highly disaggregated model, which represents decreases in agricultural profits, changes in root zone N concentrations and transport to the Baltic Sea is proposed, and is then used to estimate the gains in cost-effectiveness from changing the spatial scale of nutrient reduction targets. The model includes 14 Baltic Sea marine basins, 14 countries, 117 watersheds and 19,023 10-by-10 km grid squares. A range of policy options are identified which approach the cost-effective reductions in N loadings identified by the constrained optimization model. We argue that our results have important implications for both domestic and international policy design for achieving water quality improvements where non-point pollution is a key stressor of water quality.