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Nutrient Pollution and US Agriculture: Causal Effects, Integrated Assessment, and Implications of Climate Change

In: American Agriculture, Water Resources, and Climate Change

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  • Konstantinos Metaxoglou
  • Aaron Smith

Abstract

We study the relationship between water nutrient pollution and U.S. agriculture using data between the early 1970s and late 2010s. We estimate a positive causal effect of corn acreage on nitrogen concentration in the country’s water bodies using alternative empirical approaches. We find that a 10% increase in corn acreage causes an increase in nitrogen concentration in water by at least 1% and show that the magnitude of the acreage effect increases with precipitation but not with extreme temperature. Based on the average streamflow of the Mississippi River at the Gulf of Mexico during this period and damages of about $16 per kilogram of nitrogen, this 1% increase in average nitrogen concentration implies an annual external cost of $800 million. We also report the results of additional integrated-assessment type of exercises aimed to inform policy makers, and we use recent climate models to project the implications of climate change on the magnitude of the estimated effects. We estimate that climate change will not materially change the relationship between corn acreage and nitrogen concentration in waterways
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Suggested Citation

  • Konstantinos Metaxoglou & Aaron Smith, 2022. "Nutrient Pollution and US Agriculture: Causal Effects, Integrated Assessment, and Implications of Climate Change," NBER Chapters, in: American Agriculture, Water Resources, and Climate Change, pages 297-341, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:14692
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    1. Ribaudo, Marc O. & Heimlich, Ralph & Claassen, Roger & Peters, Mark, 2001. "Least-cost management of nonpoint source pollution: source reduction versus interception strategies for controlling nitrogen loss in the Mississippi Basin," Ecological Economics, Elsevier, vol. 37(2), pages 183-197, May.
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    4. Michael J. Roberts & Wolfram Schlenker, 2013. "Identifying Supply and Demand Elasticities of Agricultural Commodities: Implications for the US Ethanol Mandate," American Economic Review, American Economic Association, vol. 103(6), pages 2265-2295, October.
    5. Claassen, Roger & Bowman, Maria & McFadden, Jonathan & Smith, David & Wallander, Steven, 2018. "Tillage Intensity and Conservation Cropping in the United States," Economic Information Bulletin 277566, United States Department of Agriculture, Economic Research Service.
    6. Ribaudo, Marc & Delgado, Jorge & Hansen, LeRoy T. & Livingston, Michael J. & Mosheim, Roberto & Williamson, James M., 2011. "Nitrogen in Agricultural Systems: Implications for Conservation Policy," Economic Research Report 118022, United States Department of Agriculture, Economic Research Service.
    7. Hellerstein, Daniel & Vilorio, Dennis, 2019. "Agricultural Resources and Environmental Indicators, 2019," Economic Information Bulletin 288293, United States Department of Agriculture, Economic Research Service.
    8. Konstantinos Metaxoglou & Aaron Smith, 2020. "Productivity Spillovers From Pollution Reduction: Reducing Coal Use Increases Crop Yields," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(1), pages 259-280, January.
    9. Marshall, Elizabeth & Aillery, Marcel & Ribaudo, Marc & Key, Nigel & Sneeringer, Stacy & Hansen, LeRoy & Malcolm, Scott & Riddle, Anne, 2018. "Reducing Nutrient Losses From Cropland in the Mississippi/Atchafalaya River Basin: Cost Efficiency and Regional Distribution," Economic Research Report 277567, United States Department of Agriculture, Economic Research Service.
    10. Jeff C. Ho & Anna M. Michalak & Nima Pahlevan, 2019. "Widespread global increase in intense lake phytoplankton blooms since the 1980s," Nature, Nature, vol. 574(7780), pages 667-670, October.
    11. Francis Annan & Wolfram Schlenker, 2015. "Federal Crop Insurance and the Disincentive to Adapt to Extreme Heat," American Economic Review, American Economic Association, vol. 105(5), pages 262-266, May.
    12. H. Von Blottnitz & A. Rabl & D. Boiadjiev & T. Taylor & S. Arnold, 2006. "Damage costs of nitrogen fertilizer in Europe and their internalization," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 49(3), pages 413-433.
    13. F. Y. Cheng & K. J. Van Meter & D. K. Byrnes & N. B. Basu, 2020. "Maximizing US nitrate removal through wetland protection and restoration," Nature, Nature, vol. 588(7839), pages 625-630, December.
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    Cited by:

    1. Jacqueline Amaya & Emily Bednarski & Allison Guccione & Zachary Raniszeski & Megan Tierney & Samantha Trajcevski & Isabella Waite & Robert J. Brecha, 2024. "The Food, Energy, and Water Nexus through the Lens of Electric Vehicle Adoption and Ethanol Consumption in the United States," Sustainability, MDPI, vol. 16(13), pages 1-19, June.
    2. Hsin‐Chieh Hsieh & Benjamin M. Gramig, 2024. "Estimating the impact of cover crop adoption on ambient nitrogen concentration in the upper Mississippi River drainage," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 46(2), pages 609-626, June.
    3. Choi, Eseul & DePaula, Guilherme & Kyveryga, Peter & Fey, Suzanne, 2024. "The Trade-off between Yield and Nitrogen Pollution under Excessive Rainfall: Evidence from On-farm Field Experiments in Iowa," ISU General Staff Papers 202402222018560000, Iowa State University, Department of Economics.

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    More about this item

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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