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Experiences with Fertilizer Taxes in Europe

Author

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  • C. W. Rougoor
  • H. Van Zeijts
  • M. F. Hofreither
  • S. Backman

Abstract

A levy on nitrogen fertilizer is evaluated, using real life experiences in Austria, Finland and Sweden until 1995. In these countries such a levy system was introduced in 1986, 1976 and 1985, respectively. Rates varied from between 10% and 72% of the price of fertilizer. Price elasticity in these situations was estimated to vary between - 0.1 and - 0.5. In Austria the fertilizer industry at first did not pass the costs of the levy on to the farmers, but fertilizer use decreased by 15%, indicating that not only economic stimuli but also other aspects, such as a growing environmental awareness, influence fertilizer use as well. The decrease in fertilizer use in the three countries has probably led to a reduction of nitrogen load to the environment. Levy revenues were mainly used to support grain exports. Administration costs were low, about 0.75% of the tax revenues. It is concluded that a fertilizer tax as a policy instrument is not a perfect method, but that such economic instruments can be part of an effective policy mix to solve nitrogen problems.

Suggested Citation

  • C. W. Rougoor & H. Van Zeijts & M. F. Hofreither & S. Backman, 2001. "Experiences with Fertilizer Taxes in Europe," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 44(6), pages 877-887.
  • Handle: RePEc:taf:jenpmg:v:44:y:2001:i:6:p:877-887
    DOI: 10.1080/09640560120087615
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    Cited by:

    1. Hu, Yumeng & Liu, Yu, 2024. "Impact of fertilizer and pesticide reductions on land use in China based on crop-land integrated model," Land Use Policy, Elsevier, vol. 141(C).
    2. Alena Schmidt & Magdalena Necpalova & Albert Zimmermann & Stefan Mann & Johan Six & Gabriele Mack, 2017. "Direct and Indirect Economic Incentives to Mitigate Nitrogen Surpluses: A Sensitivity Analysis," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 20(4), pages 1-7.
    3. Iho, Antti & Parker, Doug & Zilberman, David, 2015. "Optimal Regional Regulation of Animal Waste," 2015 Conference, August 9-14, 2015, Milan, Italy 211780, International Association of Agricultural Economists.
    4. Sumelius, John & Grgic, Zoran & Mesic, Milan & Franic, Ramona, 2002. "Farm level cost of reducing nitrate leaching by economic instruments in Croatian farming systems," Discussion Papers 18884, CEESA: Central and Eastern European Sustainable Agriculture International Research Project.
    5. Pearce, David & Koundouri, Phoebe, 2003. "Diffuse Pollution and the Role of Agriculture," MPRA Paper 38443, University Library of Munich, Germany.
    6. Martin Henseler & Ruth Delzeit & Marcel Adenäuer & Sarah Baum & Peter Kreins, 2020. "Nitrogen Tax and Set-Aside as Greenhouse Gas Abatement Policies Under Global Change Scenarios: A Case Study for Germany," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(2), pages 299-329, July.
    7. Finger, Robert, 2012. "Nitrogen use and the effects of nitrogen taxation under consideration of production and price risks," Agricultural Systems, Elsevier, vol. 107(C), pages 13-20.
    8. Mukherjee, Sacchidananda, 2008. "Factors influencing farmers\u2019 willingness to protect groundwater from nonpoint source of pollution in the Lower Bhavani River Basin, Tamil Nadu," Conference Papers h041886, International Water Management Institute.
    9. Kaitlin E. Kelly & Ken Belcher & Mohammad Khakbazan, 2018. "Economic Targeting of Agricultural Beneficial Management Practices to Address Phosphorus Runoff in Manitoba," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(1), pages 143-166, March.
    10. Finger, Robert, 2011. "Reductions of Agricultural Nitrogen Use Under Consideration of Production and Price Risks," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114356, European Association of Agricultural Economists.
    11. Abeer Elshennawy, 2011. "Is There A Triple Dividend Effect from A Tax on Fertilizer Use? A Computable General Equilibrium Approach," Working Papers 582, Economic Research Forum, revised 05 Jan 2011.

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