Costs of Reducing Nitrogen leaching from Agriculture when implementing the WFD in Denmark Senior Researcher Brian H. Jacobsen Institute of Food and Resource Economics University of Copenhagen E-mail: Brian@foi.dk

Content Danish background What have we done in DK ? Detailed regulation- but how ? Conclusions

Analysis prior to WFD implementation Denmark has implemented 3 actions plan with focus on nitrogen (50% reduction in N-leaching – large effect on point source) Action Plan II in 1998 was followed by economic analysis (FOI report 169) Action Plan III in 2003-4, based on detailed work on scenarios and economics of different measures. Midterm 2008. - FOI report 167 and www.vmp3.dk

Danish – Dutch implementation Danish focus on N, NL more focus on P Fertiliser accounts vs MINAS (surplus) - good idea, but….. The need for control with animal manure (costs) and self-complience (avoid fraud) Derogation for the Nitrate Directive (2.5 LU/ha) on 45% of the area in NL whereas it is 2.3 LU/ha on 4% of the area in DK. N application similar on sandy soils, but higher in NL on clay soils DK 10-15% below economic optimum

N-surplus, N-leaching and N-loss in DK WFD target

Steps in implementation Target 2015 Baseline 2015 Action Plan III Scattered housing and sewage Present condition Nitrate directive

Steps in implementation Target 2015 N-quota model No atumn cultivation Organic farming Wetlands Catch crops Baseline 2015 Action Plan III Sewage from scattered housing Present condition Nitrate directive

4 water districts and 23 main catchment areas Fødevareøkonomisk Institut Denmark 4 water districts and 23 main catchment areas

Reduction required to reach target Share (%) Streams (km) Target not meet Improve physical conditions 7.300 41 16 Lakes: Reduction (ton P) 50 30 Fjords : Reduction (ton N) 19.000+ 80-90

Choosing measures in DK Step 1: Make a list of all possible measures Step 2: Analyse the effectiveness and costs of selected measures also looking at : - Side effects (CO2, NH3, pestides, Biodiversity) - Certainty with respect to estimates - Budget and socio- economic costs DMU report no. 625 from 2007 Detailed analysis on the use of cost-effectiveness in FOI report no. 191.

Choosing measures in DK Step 3: Select the most cost-effective measures for detailed analysis (3 regions) in 2008 - likely potential - administrative costs - control issues Step 4: An element in Green Growth (2009) - Water, CO2, NH3 and Biodiversity plans - Search for synergies - Co-operation between ministries takes time  - Draft analysis of reduction requirements in catchments - Implementation is difficult Step 5: RBMP (2011?) Step 6: Local action plans (2012?)

Division of marine area according to knowledge level (): V1-area (10%) V2-area (20%) V3-area (30%) In the 1st plan period focus is mainly on measures in V1 and V2

Reduction requirement Efterafgrøder FOI og DJF antager få sædskifteændringer og jævn placering i DK DMU angiver at der er plads til flere efterafgrøder (250-500.000 ha) Andel stiger fra 10/14% op til et gennemsnit på ca. 22%. (maks. 37%) (V1+V2 er 70% af det samlede areal) Arealet med yderligere 24% efterafgrøder er ca. 6% af arealet (Jylland). Areal med yderligere 0-5% er noget større. Stor geografisk forskellighed

Cost efficiency (€ / kg N) – Green Growth Genereal measures Efficiency (kg P/ha) Costs (€/ha) (kg N /ha) € / kg N Limit ploughing in the autum 0.2 1.2 7 Limit ploghing of grass 9.0 15 0.6 Catch crops 56.4 14 4.1 10 meter buffer strips 3 277 48 5.8

Catch crops in waterplans 2010 Efterafgrøder Add. Catch crops (%)

Cost efficiency (€ / kg N) – Green Growth Specific measures Efficiency (kg P/ha) Costs (€/ha) (kg N /ha) € / kg N Targeted catchcrops 56.4 14 4.1 Wetlands (N) 1.043 113 9.2 Tradeable quota (N) 4.8 – 20

Cost efficiency (€ / kg N) Green Growth Other measures Costs (€/ha) Efficiency (kg N /ha) € / kg N Biogas 2 Organic dairy farming 37 9 4 Energy crops (willow) 188 17 11 Reduced N-norm (10%) 26

Cost efficiency Lakes (€ / kg P) P-measures Costs (€/ha) Efficiency (kg P /ha) € / kg P P-wetlands 457 10 46 Grass to reduce erosion 388 0,16 2.550 Non farm measures : Sewage scattered housing <800 Waste water treatment Rain water storage

Danish – Dutch WFD implementation Both has a need for large reductions in nutrient losses NL focus on physical changes as N is believed to have been solved and P is too costly? Agricultural measures in NL are relative few Likely WFD exemptions are required in NL in 2027, DK have aimed more for 2015/2021.

NICA research project N-loss to the aquatic environment has to be reduced by up to 50% 2/3 of the N lost from the root zone disappears on the way, but when and where ? Uniform regulation is not efficient, but can we point to the robust areas ? What is the certainty of these predictions (scale) and economic gain ?

The Ringkøbing Fjord analysis Jacobsen et al., 2009

- Marginal land rent and livestock intensity

Target : Increased certainty and fewer costs related to mapping

Model approach : Newer, better and cheaper technologies to asses N-flow

Conclusions The low hanging fruits have been picked Synergy between measures for environmental policies is good, but does delay the process Implementation of measures has proven to be a challenge The DK approach to WFD is top-down and so local action plans are less required Local participation might help to engage farmers more, but it is time consuming Regulation based on field level knowledge requires good data and control

For more info look at www.foi.dk