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Dynamic Reallocation of Marketable Nitrogen Emission Permits in Danish Freshwater Aquaculture

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  • Rasmus Nielsen
  • Jesper Levring Andersen
  • Peter Bogetoft

Abstract

The potential gains from a regulatory change allowing for reallocation of marketable nitrogen emission permits under a cap and trade system are analyzed in a dynamic context using Data Envelopment Analysis to formulate linear programming models. In these models new, more environmental friendly farms are gradually introduced to the industry over 10 years. The new industry structure, production, and profitability gains are investigated, and the effect of changing the overall level of nitrogen emission is analyzed. Our results show that there is scope for a more efficient allocation of resources to either increase the production level or to reduce the emission level. This article adds to the literature by extending previous static reallocation models to a dynamic model, which allows for a gradual introduction of new firms. This makes it possible for managers to analyze the effects of reallocating production across firms and time.

Suggested Citation

  • Rasmus Nielsen & Jesper Levring Andersen & Peter Bogetoft, 2014. "Dynamic Reallocation of Marketable Nitrogen Emission Permits in Danish Freshwater Aquaculture," Marine Resource Economics, University of Chicago Press, vol. 29(3), pages 219-239.
    • Handle: RePEc:ucp:mresec:doi:10.1086/677758
    DOI: 10.1086/677758
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    References listed on IDEAS

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    4. Peter Bogetoft & Kristoffer Boye & Henrik Neergaard-Petersen & Kurt Nielsen, 2007. "Reallocating sugar beet contracts: can sugar production survive in Denmark?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 34(1), pages 1-20, March.
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    Cited by:

    1. Ayouqi, Hossein & Knowler, Duncan & Reid, Gregor & Cox, Sean, 2021. "Marginal damage cost functions for particulate organic carbon loading from open-net pen salmon farms in British Columbia, Canada," Ecological Economics, Elsevier, vol. 179(C).
    2. Geret S. DePiper & Douglas W. Lipton & Romuald N. Lipcius, 2017. "Valuing Ecosystem Services: Oysters, Denitrification, and Nutrient Trading Programs," Marine Resource Economics, University of Chicago Press, vol. 32(1), pages 1-20.
    3. Frank Jensen & Rasmus Nielsen & Henrik Meilby, 2023. "Regulation of aquaculture production," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 25(2), pages 161-204, April.
    4. Ankamah-Yeboah Isaac & Max Nielsen & Rasmus Nielsen, 2015. "Organic Salmon – Considered a Fisheries or Agricultural Product Among Consumers?," 2015 EAFE (European Association of Fisheries Economists) Conference Papers 003, Nisea.
    5. Jacobsen, Lars-Bo & Nielsen, Max & Nielsen, Rasmus, 2016. "Gains of integrating sector-wise pollution regulation: The case of nitrogen in Danish crop production and aquaculture," Ecological Economics, Elsevier, vol. 129(C), pages 172-181.
    6. Bronnmann, Julia & Asche, Frank, 2017. "Sustainable Seafood From Aquaculture and Wild Fisheries: Insights From a Discrete Choice Experiment in Germany," Ecological Economics, Elsevier, vol. 142(C), pages 113-119.
    7. Ankamah-Yeboah, Isaac & Nielsen, Max & Nielsen, Rasmus, 2016. "Price premium of organic salmon in Danish retail sale," Ecological Economics, Elsevier, vol. 122(C), pages 54-60.

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