Benefit-Cost Analysis of Precision Agriculture for Nitrogen Pollution Reduction: Evidence from the Zelivka Catchment

Matej Opatrny, Milan Scasny, Csilla Farkas, Mikael Skou Andersen and David Zilberman
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Matej Opatrny: Charles University, Faculty of Social Sciences, Institute of Economic Studies & Charles University Environment Center
Milan Scasny: Charles University, Faculty of Social Sciences, Institute of Economic Studies & Charles University Environment Center
Csilla Farkas: Norwegian Institute of Bioeconomy Research (NIBIO)
Mikael Skou Andersen: Aarhus University
David Zilberman: University of California, Berkeley

No 2026/18, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: This paper presents a social benefit-cost analysis (BCA) of Precision Agriculture (PA)and Enhanced Efficiency Fertilizers (EEF) for reducing nitrate pollution in the Zelivka catchment, the drinking-water source for 1.5 million people in Prague and surrounding regions. The analysis combines field-level data (50,309 ha, 729 farms), meta-analytical biophysical parameters, a dynamic heterogeneous-agent adoption model, and cross-validation against an independent SWAT+ hydrological simulation. Technology adoption generates a mean Net Present Value of EUR 291 million (95% CI: EUR 94 775 million) over fifty years, with a deterministic benefit-cost ratio of 19.8. Even with health benefits set to zero, the NPV remains positive at EUR 44 million, indicating that private benefits alone cover adoption costs. BCA and the SWAT+ approaches imply comparable rates of reservoir-concentration decline (≈0.15 mg/L/yr in SWAT+ over its lag-free window versus a ≈0.13 mg/L/yr peak in the BCA once the lag has elapsed). At-source nitrogen prevention via agricultural technology adoption offers a cost-effective complement to structural catchment measures and end-of-pipe water treatment.

Keywords: benefit-cost analysis; precision agriculture; enhanced efficiency fertilizers; nitrogen pollution; water quality; technology adoption (search for similar items in EconPapers)
JEL-codes: D61 Q12 Q15 Q25 Q51 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2026-07, Revised 2026-07
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