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Optimal Control of Nutrient Pollution in a Coastal Ecosystem: Agricultural Abatement versus Investment in Wastewater Treatment Capacity

Marita Laukkanen () and Anni Huhtala ()

No 24451, 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark from European Association of Agricultural Economists

Abstract: We examine in a dynamic framework how public resources should be allocated to small-scale water protection efforts in agriculture or alternatively to investments in large-scale waste water treatment plants to control point source loads. The building of waste water treatment capacity is characterized by high set-up costs as compared to the operating costs. We determine the optimal timing of investment, the rate of nutrient load reduction from point versus non-point sources, and the optimal switching policies from control of non-point pollution only to control of both non-point and point sources. The results of the analytical model are illustrated with simulation of optimal abatement policies for the Finnish coastal waters in the Gulf of Finland.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 18
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae05:24451

DOI: 10.22004/ag.econ.24451

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