Policy Solutions for Tackling Nutrient Pollution Hotspots in EU Agriculture: Balancing Environmental and Economic Goals with the CAPRI Model

Ekaterina Iovleva, Davit Stepanyan and Alexander Gocht

No 397904, 100th Annual Conference, March 23-25, 2026, Wadham College, University of Oxford, Oxford, UK from Agricultural Economics Society (AES)

Abstract: Nutrient pollution in EU agriculture is highly uneven, with the strongest pressures concentrated in regions with intensive livestock production and high nitrogen (N) inputs. This discussion paper evaluates the environmental and economic effects of a spatially targeted N-surplus tax using the CAPRI partial equilibrium model for 2035. First, a multi-indicator framework is applied to identify agricultural pollution hotspots at NUTS2 level. Based on gross N surplus, total N input, mineral fertiliser input, nutrient use efficiency, and livestock density, 35 hotspot regions are selected across the EU. Second, four tax scenarios are simulated, ranging from €250 to €1000 per tonne of N surplus, applied only in the identified hotspot regions. The results show that the targeted tax reduces total EU N surplus by 5.0% to 6.8% and agricultural greenhouse gas emissions by 10.4 to 13.6 Mt CO2eq relative to the baseline. The strongest responses are observed in Belgian, Dutch, and other intensive production regions. Adjustment mechanisms differ across regions, but mainly include lower mineral fertiliser use, lower livestock density, and, at higher tax levels, greater uptake of mitigation technologies. Production effects at EU level remain moderate, while some redistribution of N pressure occurs towards non-targeted regions. Of the 35 initially identified hotspot regions, a maximum of 4 were removed from hotspot status under the simulated policy scenarios, while no new hotspots were created. The findings suggest that a targeted N-surplus tax can be an effective instrument for reducing nitrogen pressure in hotspot regions, but additional policy measures will likely be needed to deliver a broader and more durable solution.

Keywords: Food; Consumption/Nutrition/Food; Safety (search for similar items in EconPapers)
Pages: 25
Date: 2026-03
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aes026:397904

DOI: 10.22004/ag.econ.397904

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