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The Costs of Meeting the Environmental Objectives for the Baltic Sea: A Review of the Literature

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Abstract

The environmental targets of the recently agreed Baltic Sea Action Plan (BSAP) targets are likely associated with a considerable cost, which motivates a search for low-cost policies. The following review shows there is a substantial literature on cost-efficient nutrient reduction strategies, including suggestions regarding low-cost abatement, but actual policies at international and national scale tend to be considerably more expensive due to lack of instruments that ensure a cost-efficient allocation of abatement across countries and sectors. Economic research on the costs of reducing hazardous substances and oil spill damages in the Baltic Sea is not available, but lessons from the international literature suggest that resources could be used more efficiently if appropriate analysis is undertaken. Common to these pollution problems is the need to ensure that all countries in the region are provided with positive incentives to implement international agreements.

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Notes

  1. The initial loads are calculated as the average load 1997–2003, minus the reductions that would take place if all countries had fully implemented the Wastewater Directive or HELCOM Recommendation for municipal wastewater treatment.

  2. Or, more precisely, a popular presentation of the results in (Gren 2000).

  3. Although all the included studies have been published in different years, the effect of the time of data collection is not easily established. From a theoretical viewpoint, the costs for abating a given additional quantity of nutrients should increase over time, if the cheapest abatement options are successively used up. However, there is no evidence that the cheapest measures are the ones that have actually been implemented first (see e.g., Elofsson and Gren 2004). Moreover, the capacity estimates of different measures used in the studies are rather qualified guesses than built on hard data, as such data cannot be found. Hence, one cannot expect to find that the chosen capacities in the studies decrease over time.

  4. This completely outweighs the effect of inclusion of Ukraine and Belorussia in the COWI study, which could be expected to lead to lower total costs.

  5. Instead, most studies suggest many low-cost abatement options in the agricultural sector.

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Acknowledgments

Financial support from the Swedish Environmental Protection Agency is gratefully acknowledged. The author is also indebted to two anonymous referees for helpful comments.

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  1. Department of Economics, Swedish University of Agricultural Sciences, Box 7013, 750 07, Uppsala, Sweden

    Katarina Elofsson

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Elofsson, K. The Costs of Meeting the Environmental Objectives for the Baltic Sea: A Review of the Literature. AMBIO 39, 49–58 (2010). https://doi.org/10.1007/s13280-009-0005-8

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