Least Cost Emission Reductions in Transboundary River Basins: The Case of Diffuse Emissions of Nutrients in the Rhine River Basin

Excessive nutrient loads to rivers and receiving water bodies cause water quality problems and a cascade of negative impacts on ecosystems and human activities. Emission reduction policies can help to reverse this situation. As is often shown in economic literature, a flat rate emissions reduction objective applied to all sources may not be cost-effective. When differences in abatement costs between sectors are taken into account, as well as differences in the relative impacts of emission reductions by various upstream regions on downstream water quality levels, the same objectives may be achieved at lower costs. A methodology to explore these cost-effective allocations for nutrient emission reduction strategies is presented for the Rhine river basin. Results indicate that emission reduction policies should well account for differences between agricultural activities and their locations when water quality targets are to be met at least costs.