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Water Quality Management and Climate Change Mitigation: Cost-effectiveness of Joint Implementation in the Baltic Sea Region

Doan Nainggolan, Berit Hasler, Hans E. Andersen, Steen Gyldenkærne and Mette Termansen

Ecological Economics, 2018, vol. 144, issue C, 12-26

Abstract: This paper explores the scope for simultaneously managing nutrient abatement and climate change mitigation in the Baltic Sea (BS) region through the implementation of a selection of measures. The analysis is undertaken using a cost-minimisation model for the entire BS region, the BALTCOST model. In the present research, the model has been extended to include greenhouse gas (GHG) emissions effects, enabling us to analyse the trade-offs between cost-effective GHG and nutrient load reductions. We run the model for four different scenarios in order to compare the environmental and economic consequences of contrasting strategies: single environmental objective management versus joint implementation strategy. The results show that implementing land-based measures with a sole focus on water quality (to meet the HELCOM's 2013 Baltic Sea Action Plan nutrient abatement targets) can produce climate change mitigation co-benefits equivalent to 2.3% of the 2005 emission level (from agriculture and waste water combined) for the entirety of the BS region. More interestingly, a joint implementation strategy can deliver further climate change mitigation benefit (i.e. up to 5.4%) at a marginal cost that is comparable to mitigation costs reported by other studies for efficient technologies. All in all the results demonstrate that a joint strategy to improve water quality and to reduce climate change is economically beneficial. Our findings show that the cost and the outcome of the implementation vary between countries. This illustrates the need to develop a joint regional policy for water and climate regulation that fully considers the asymmetry in both the expected effects and cost distribution across the countries in the region.

Keywords: Trade-off; Water management; Climate change mitigation; Co-benefit; Cost-minimisation; Economic-hydrological model (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:ecolec:v:144:y:2018:i:c:p:12-26