Hasler, B. & Jacobsen, B.H. 2022. Økonomiske konsekvensberegninger for vandrammedirektivet i 2027. Sammenligning af resultater fra de økonomiske modeller SMART og TargetEconN. Aarhus Universitet, DCE – Nationalt Center for Miljø og Energi, 55 s. - Videnskabelig rapport nr. 503. dce2.au.dk/pub/SR503.pdf
The report compares and summarizes model analyses carried out with the two models SMART (Jacobsen, 2022) and TargetEconN (Hasler et al., 2022), both of which are used to calculate cost-effective achievements of the total effort required in the Danish River Basin Plans 2021-2027, which contributes to the Water Framework Directive's goals on good ecological status in 2027. The overall description and comparison in the report is based on detailed descriptions and analyses in two reports on each of the two models (Jacobsen, 2022 and Hasler et al., 2022).
The two models are set up using as equal data and assumptions as possible. By performing the calculations with the two different economic models, it is revealed and explained what differences in the modelling, the potentials for measures and other data mean for the calculated costs, effects and cost effectiveness. The purpose of the comparison is to obtain a consolidated basis for assessing the costs. The final, actual costs will depend on how the efforts are implemented and which policy instruments are used.
The model analyses were carried out at catchment level, for a total of 108 catchment areas, and are presented both at catchment level and for the whole country. There is a need for action in 78 of the 108 coastal catchments, corresponding to 79 percent of the agricultural area. The data used for the models (costs, effects and potential for where the measures can be implemented) is updated in the period 2019 to 2021.
Two scenarios have been calculated with both models:
The report presents the results at national level, with maps showing the results distributed by catchment area. More detailed results are found in the individual reporting of each of the models.
Table S.1 summarizes some of the key results of modeling with SMART and TargetEconN.
Table S1 Summary description of selected results for the two models and two scenarios.
Scenario 1 1) | Scenari0 2 1) | |||
SMART | TargetEconN | SMART | TargetEconN | |
Total costs, million DKK, per year Financial costs Welfare economic costs | 938 1,200 | 532 (MR 881)2) 679 | 941 1,205 | 545 698 |
Cost-effectiveness , national level Financial Welfare economic | 78 100 | 41 52 | 81 104 | 42 54 |
Total achieved reduction of nitrogen i tons. The target in total is 13.075 tons N. | 12,070 | 13,014 | 11,666 | 13,000 |
The most used measures in the models, in terms of area (hectares) | Fertiliser | Forestation, | Fertiliser | Permanent set aside mineral soils, energy crops. constructed wetlands, Fertiliser |
The most used measures in terms of effect (tons N) | Catch crops, wetlands, | Forestation, | Catch crops. Wetlands Fertiliser reduction, permanent set aside mineral soils | Permanent set aside mineral |
Note: 1) Target fulfillment is not achieved in all catchment areas. 2) MR stands for targeted regulation and indicates a scenario where an area with follow-on crops corresponding to MR requirements is required in 2022.
It is not possible to achieve the full reduction of 13,075 tonnes of N in any of the scenarios, but the TargetEconN solutions are closer to fulfillment than the SMART solutions.
In the overview of the most used measures, only agricultural measures are mentioned, but the analysis also includes increased treatment of waste water. Due to relatively high costs, clean-up measures appear largely only in the solutions for coastal water catchments where the possibility of other means of action has been exhausted. It is assessed that there is a need for better data to improve the analysis of treatment plants and also rainwater overflows, both when it comes to costs and effects, including any seasonal aspects of the effects.
The cost-effectiveness presented in the summary table is a national estimate of average for the effort. The calculated marginal costs are between DKK 0 and 4900 per kilo N, and it is specific for each of the 108 catchments that have specific input requirements for N.
The total costs are calculated to be between DKK 532 and 941 million per year, calculated as financial economic costs, with the lowest cost calculated with TargetEconN and the highest with SMART. The costs are thus almost twice as high in SMART compared to TargetEconN, for both scenarios. The primary explanation for the difference between the two models is mainly the difference in spatial differentiation. In TargetEconN, the use of measures is
modelled at field level within the catchment areas, while the SMART model does not differentiate the spatial location of measures within the catchment area. In TargetEconN, therefore, the measures are localized where the lost gross margins by implementing a measure are low, while more average costs are used in SMART. This difference contributes to the fact that, in the SMART model, catch crops and fertilizer reduction are used on a larger part of the area within the catchment areas, while in TargetEconN, afforestation and permanent set aside on mineral soils are used to a greater extent on a smaller part of the area. In a sensitivity scenario in TargetEconN, a requirement for catch crops corresponding to the targeted regulation (MR) requirement in 2022 has been inserted, and by that, the costs in TargetEconN are increased to DKK 881 million DKK annually, in financial economic prices.
The budget economic costs are calculated to be DKK 78-81 per kg N in SMART and DKK 41-42 per kg N in TargetEconN for the two main scenarios, while the welfare economic costs per kg N are calculated to be, on average, for all catchments DKK 52-54 per kg N for TargetEconN and DKK 100-104 per kg N for SMART.
