Nitrogen loading and the economy — results and discussion

Fig. 2. Marine nitrogen loading from industry and agriculture apportioned by demand 1988; metric tonnes N. uptake coefficients used are from 1970. It should be mentioned, though, that our estimates are in full agreement with those of the Ministry of Agriculture 1991. It should also be noted that nitrogen removal has not increased much during the study period 6, which is in poor agreement with the far greater simultaneous increase in crop yield. This is attributable to changes in crop composition, primarily due to the decrease in areas planted with clover grass since the latter takes up three times as much nitrogen per hectare as cereals. Thus, clover grass fields accounted for 29 of the total area of arable land in 1965 but only 7.5 in 1988. Finally, leaching was calculated as the resid- ual rounded up. As such, leaching also in- cluded the non-quantifiable loss in connection with silage and changes in the soil nitrogen pool. As there is a considerable time lag in the transport of nitrogen in soil and water bodies due to chemical and biological processes, 70 of the nitrogen leaching from the root zone was assumed to be retained in inland waters, with only 30 eventually reaching the sea Danish Environmental Protection Agency, 1991a. As is apparent from Table 1, leaching from the root zone has increased considerably since the mid 1960s especially in the first half of the period. This is due to the increase in nitrogen input from animal and commercial fertilizers, to- gether with almost unchanged nitrogen removal in crops. The nitrogen input surplus has more than tripled during the period. 2 . 2 . 3 . Nitrogen loading from sewage effluents The sewage part of the nitrogen sub-model is quite simple, concerning only loading from indus- trial sectors. Nitrogen loading from sewage works is measured in a nationwide monitoring pro- gramme, which was initiated in 1988 as part of the Action Plan on the Aquatic Environment. The estimates back through time were made by cor- recting 19881989 discharges with data on the development in sewage treatment technology Tonni Christensen, Danish EPA, personal communication.

3. Nitrogen loading and the economy — results and discussion

3 . 1 . Allocation of final demand As already stated, agriculture is the main sector contributing to nitrogen loading. With regard to sewage effluent inputs to inland and marine wa- ters, the sectors which pollute most include the food industry abattoirs in particular, the chemi- cals industry, fish farming and fish processing. Production activities reflect the composition of the final demand, changing with changes in ex- port, consumption and investments. In Fig. 2, total nitrogen loading of marine waters in 1988 is shown apportioned by final demand, i.e. the direct and indirect loading due to each demand cate- gory. Total nitrogen loading of the sea by agricul- ture and industry amounted to 87 000 tonnes in the late 1980s, of which the industry accounted for 13. Table 2 Decomposition analysis of changes in marine nitrogen loading from agriculture 1000 metric tonnes N a Technology Final demand Total Emission factor Input mix Composition Level 30 520 60 1966–1976 − 13 940 14 360 31 000 3330 − 7130 1976–1986 2410 20 400 19 000 1986–1988 830 − 1480 − 2840 6490 3000 40 690 − 6740 1966–1988 − 14 920 33 970 53 000 a Source: The authors. As is apparent from Fig. 2, export and pri- vate consumption are by far the most important categories of final demand with regard to nitro- gen loading. Thus, export is responsible for 65 of the agricultural loading and 74 of the in- dustrial loading, while the corresponding figures for private consumption are 32 and 17, respec- tively. In contrast, public consumption and in- vestments demand commodities from less polluting production sectors, accounting for only 3 – 4 of nitrogen loading. 3 . 2 . Decomposition analysis The calculations indicate that since the mid 1960s, nitrogen loading from the economy has undergone major change. According to the esti- mated nitrogen budget Table 1 and the input – output calculations, nitrogen leaching from agriculture has risen by 240, while loading from sewage effluent has fallen by 16. Produc- tion technology, abatement technology, shifts in commodity mix in the production and house- hold sectors and economic growth are all of im- portance for this development. In the following, structural decomposition analysis is employed to clarify how these different factors have affected nitrogen loading. Total change in loading is de- composed into the effects due to the four com- ponents; loading per unit produced emission factor effect, input mix in production sectors, commodity mix of final demand and level of final demand. The emission factor effect incorporates techni- cal, chemical and legislative factors. For agricul- ture, the effect depends on production behaviour and other factors influencing nitrogen input to agricultural land. For industry, the emission fac- tor effect depends on production technology and legislation on sewage treatment. The results of the decomposition analysis are presented in Tables 2 and 3 grouped in intervals of 10 years except from the third period, which is shorter because the data only runs to 1988. Please note that the total change cannot be derived by simple addition of the changes dur- ing the three intervals studied as all changes in a component are multiplied with the values which the other components initially have in the period i.e. at time t − 1. Nitrogen loading from agriculture increased by 53 million tonnes from 1966 to 1988, due to increased nitrogen loading per unit of produc- tion and increased level of final demand i.e. export, consumption and investment. Intensified nitrogen loading per unit of agricultural produc- tion was the most important factor in the first decade, whereafter growth in the level of final demand led to increased loading. More detailed decomposition shows that it is export in particu- lar that has grown markedly. As is apparent from the agricultural nitrogen budget Table 1, fertilizer inputs have been in- creasing without a corresponding increase in ni- trogen removal with harvested crops. This trend is attributable to the enhanced input of commer- cial fertilizer and the resulting poorer utilization Table 3 Decomposition analysis of changes in marine nitrogen loading from sewage 1000 metric tonnes N a Final demand Total Technology Input mix Emission factor Composition Level 460 2750 7260 1966–1976 − 900 − 11 370 420 1980 − 10 500 6420 1976–1986 − 1680 − 1890 1986–1988 − 20 − 1210 1870 − 1250 1966–1988 880 − 27 150 6290 17 170 − 2810 a Source: The authors. of animal fertilizer Dubgaard, 1994; Hasler, 1998 5 . The tendency is especially clear up to 1980, whereafter fertilizer inputs stagnated. This is supported by the fact that the input – output anal- ysis Table 2 shows that it is the first half of the period in particular that is characterized by in- creasing nitrogen intensity; in contrast, the second half of the period is characterized by an increase in the demand for agricultural products, and hence increased nitrogen loading. Thus, nitrogen loss during this second half of the study period cannot be chiefly explained by increased nitrogen input per unit of production, but rather by an increase in the production of both vegetable and animal agricultural products. The analysis thus indicates that even if the nitrogen input flows per unit of production had remained unchanged dur- ing the period, the growth in production would per se have led to an increase in nitrogen loading in the environment. The environmental impact can thus be viewed as a resultant from a few dominant trends. The economic driving force during the study period has been a high level of growth in agricultural exports. Due to Denmark’s small geographic size, this has necessitated particularly intensive agricul- ture with a high environmental impact per unit area. The agricultural production has been inten- sified through increasing the use of production inputs, including markedly growing use of nitro- gen, especially during the first half of the study period. Thus, in order to reduce future nitrogen load- ing, policy measures should aim at controlling production by, e.g. approval schemes for or limits on livestock production. Also, levies on nitrogen loss would encourage more efficient use of nitro- gen input, i.e. by better utilization of animal fertilizers or by optimization of fodder mix. Structural shifts, i.e. commodity composition in the household and production sectors have had minor effects, an exception being during the first decade, when a shift in the composition of final demand commodity mix of export, consumption and investments reduced loading by almost 14 000 tonnes. Further decomposition revealed this to be mainly due to a decrease in the agricul- tural exports during that period. From 1976 – 1986, changes in input mix also reduced nitrogen loading by 7130 tonnes as the production sectors reduced demand for inputs from agriculture per unit of production. Table 3 summarizes the decomposition analysis of total change in nitrogen loading from sewage. This has fallen by 2.8 million tonnes and this again is mainly due to changes in emission inten- sity and level of final demand particularly exports 5 There are several explanations for this development. Ac- cording to Hasler 1998, it is partly due to changes in crop mix, as different crops have different nitrogen requirements and nitrogen leaching per hectare differs. An example is clover grass which was substituted for grass during the period 1965 – 1975. Clover grass fixes nitrogen from the air, while grass requires nitrogen to be supplied in the form of fertilizer. This means that nitrogen input increased without a similar increase in nitrogen removal in the crops. Moreover, as commercial fertilizers are relatively cheap compared to other inputs, farm- ers are encouraged to apply surplus nitrogen. Finally, accord- ing to most functions of crop response to nitrogen, both yield and nitrogen uptake exhibit diminishing returns Hasler, 1998. from abattoirs and the fish processing industry. In this case, however, emission technology lowers nitrogen loading, sewage treatment having inten- sified considerably during the whole period. In addition to the rising level of final demand, struc- tural shifts also increase nitrogen loading. How- ever, treatment technology is able to compensate for the effects of economic growth and structural shifts, ensuring a total decline in nitrogen loading of 2.8 million tonnes. 3 . 3 . The global aspect The above analysis is based exclusively on ni- trogen loading within Denmark. However, the import of commodities gives rise to loading in the countries from which they are imported. Analogously, foreign demand for Danish com- modities leads to loading in Denmark through Danish production of goods for export. To obtain a full picture of the effects of Danish economic activities, nitrogen loading caused abroad as a result of Danish imports has to be included. Such estimates are based on two impor- tant assumptions. Firstly, foreign technology is identical to Danish technology, i.e. foreign pro- ducers use the same inputs per unit of production as the corresponding Danish producers. Secondly, foreign production activities generate the same nitrogen loading per unit of production as the Danish activities, i.e. the activities are assumed to have the same abatement technology. It is impor- tant to note that while these assumptions are critical and entail considerable uncertainty, they are nevertheless widely applied in input-output analysis. The nitrogen-intensive imported goods primar- ily derive from the chemicals industry and the production of commercial fertilizer and pesticides Danish Environmental Protection Agency. Dif- ferences in the production of these goods between countries are not taken into account as the tech- nologies used at home and abroad are assumed to be equivalent. However, as our imports of agricultural goods are relatively small compared with production for export Statistics Denmark, any major difference in agricultural practice between Denmark and the Table 4 Import and export of nitrogen loading due to foreign trade metric tonnes N a 1966 1988 61 260 25 720 Loading due to export of goods, i.e. import of nitrogen loading 6760 7460 Loading due to import of goods, i.e. export of nitrogen loading 54 500 18 260 Residual a Source: The authors. countries we import from will be of limited signifi- cance in the present context. However, an excep- tion would include fodder, where imports are considerable. In this case, the assumption of equivalent technology at home and abroad is more problematic as agricultural conditions in the countries from which Denmark imports fodder deviate somewhat from those in Denmark. The estimated nitrogen loading in Denmark and abroad resulting from foreign trade is shown in Table 4. The first row shows loading occurring in Denmark as a result of the export of goods excluding the import content of the exports. This can be considered as ‘imported’ nitrogen loading as it would otherwise have occurred in the importing country had the goods instead been produced there. The next row shows nitrogen loading occurring abroad as a result of Danish imports of goods exclusive of imports for export purposes. This corresponds to ‘exported’ nitro- gen loading as it would otherwise have occurred in Denmark. Finally, the third row shows the residual of loading due to exports minus loading due to imports. If the residual is negative, Den- mark is a net exporter of nitrogen loading through the import of goods whereas if the residual is positive, Denmark is a net importer of nitrogen loading through the export of goods. As is apparent from Table 4, Denmark is a net importer of nitrogen loading, loading due to ex- ports being much greater than imports. The main reason for this is the sizeable Danish exports from agriculture and the food industry relative to total production, Denmark being the seventh largest exporter of agricultural products in the world Statistics Denmark. International trade, in which Denmark has specialized in the export of a number of agricultural products, thus entails en- hanced pressure on the environment. The nitrogen loading ‘deficit’ was much smaller in 1966, however. While loading due to exports increased by 140 during the period, loading due to imports fell by 10, thereby increasing the deficit. This development was partly a result of the growing agricultural exports, partly a result of difference in commodity mix in exports and im- ports. This is because nitrogen loading imports are mainly due to the export of agricultural prod- ucts, while loading exports are mainly due to imports from the pulp and paper, fertilizer and chemical sectors. As agricultural production has become more nitrogen-intensive, leaching from agricultural land has increased throughout the period and ‘imported’ nitrogen loading has there- fore increased. Conversely, improved abatement technology abroad has reduced ‘exported’ nitro- gen loading. Thus, the environmental impact of Danish exports has increased while that of im- ports has declined.

4. Conclusions