Swedish nutrient reduction policies: an evaluation of cost-effectiveness

Since more than 30 years, the Swedish government as well as other governments in the drainage basin strives toward a reduction in nutrient loads to Baltic Sea coastal waters in order to combat eutrophication of the sea. In spite of this, the cost-effectiveness of actual environmental policy for meeting Baltic Sea nutrient targets has not been evaluated by national or international bodies in the region. The aim of this paper is to evaluate Swedish national nitrogen and phosphorus policies with regard to cost-effectiveness. This is done through a comparison of nutrient measures implemented through environmental policy decisions 1995–2005 with cost-effective policies for present national as well as Baltic Sea Action Plan (BSAP) targets. The cost-effective measures are calculated using an empirical programming model including all countries adjacent to the Baltic Sea. Calculations show that measures that jointly reduce nitrogen and phosphorus are hardly applied in actual policy and that reductions in the agricultural sector are much smaller than is cost-effective. Data show, surprisingly, that considerable reductions have been carried out in the Bothnian Sea catchment in spite of there being no nutrient reduction target for this catchment. Results suggest also that the Swedish costs for meeting the new and geographically more restricted targets under the BSAP can be reduced if a policy with less restrictions on the location of phosphorus abatement is applied, compared to what is now suggested.