Integrated assessment of nitrogen runoff to the Gulf of Mexico

Authors: XU, YUELU - West Virginia University; ELBAKIDZE, LEVAN - West Virginia University; YEN, HAW - Auburn University; Arnold, Jeffrey; GASSMAN, PHILIP - Iowa State University; HUBBART, JASON - West Virginia University; STRAGER, MICHAEL - West Virginia University

Submitted to: Resource and Energy Economics
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 11/20/2021
Publication Date: 11/23/2021
Citation: Xu, Y., Elbakidze, L., Yen, H., Arnold, J.G., Gassman, P.W., Hubbart, J., Strager, M.P. 2021. Integrated assessment of nitrogen runoff to the Gulf of Mexico. Resource and Energy Economics. 67. Article 101279. https://doi.org/10.1016/j.reseneeco.2021.101279.
DOI: https://doi.org/10.1016/j.reseneeco.2021.101279

Interpretive Summary: An integrated hydro-economic agricultural land use model was developed in the Mississippi River Basin (MRB). The model can be used to help quantify the impacts of different energy and fertilizer prices on nitrogen runoff in the Mississippi River Basin and to estimate the opportunity cost of N runoff abatement. The study found that a 30% increase in fertilizer prices would lead to a 2.9 % decrease in nitrogen use and runoff. The model also predicted a $6 billion annually opportunity cost to reduce nitrogen runoff from crop production by 45%.

Technical Abstract: An integrated hydro-economic agricultural land use model was developed with endoge-nous and spatially explicit crop planting, nitrogen (N) fertilizer use and irrigation in theMississippi River Basin (MRB). We used the model to quantify the effects of energy and Nfertilizer prices on N runoff to the Gulf of Mexico. Results show a modest effect of energycosts and a more substantive impact of N fertilizer costs on N delivered to the Gulf of Mexico.A 30 % reduction (increase) in N fertilizer price leads to a 3.5 % and 1.5 % increase (2.9 %and 1.5 % decrease) in N use and runoff, respectively. The model was also used to estimatethe opportunity cost of N runoff abatement. The opportunity cost of reducing N runoff fromcrop production to the Gulf by 45 % is estimated to be $6 billion annually, which correspondsto an average cost of $29.3 per kg of N runoff reduction. The results show heterogeneitiesin the optimal N runoff reduction efforts across counties within the MRB, demonstratingthe significance of a targeted abatement strategy.