Tomasz Żylicz

Managing nutrient fluxes and pollution in the Baltic: an interdisciplinary simulation study

Abstract This interdisciplinary paper reports the results of a study into the costs and benefits of eutrophication reduction in the Baltic Sea. A large multidisciplinary team of natural and social scientists estimated nutrient loadings and pathways within the entire Baltic drainage basin, together with the costs of a range of abatement options and strategies. The abatement cost results were compared with clean-up benefits on a basin-wide scale, in order to explore the potential for international agreements among the countries which border the Baltic. Most countries would seem to gain net economic benefits from the simulated 50% nitrogen and phosphorus reduction policy.

Costing an international public good: the case of the Baltic Sea

Abstract The paper discusses an economically efficient and internationally equitable provision of a specific public good. The good in question, the Baltic Sea, satisfies a number of needs, but economic values implied may be different in various countries polluting and using the Sea. The level of eutrophication has been identified as a key characteristic of the Baltic Sea relevant for its value. The Chander–Tulkens model of cost-sharing is used to determine a hypothetical allocation of abatement costs across the countries around the sea. The application of the model is based on estimates of national abatement costs as well as national willingness to pay for reduced eutrophication. Estimating willingness to pay in a collection of countries (some of which undergo a transition from centrally planned systems) has been the main challenge of this study. The results were derived from a coordinated series of contingent valuation surveys in Lithuania, Poland and Sweden, combined with benefit transfer studies to cover the rest of the region. Predictions of cost-sharing schemes obtained from the Chander–Tulkens model are confronted with actual data on abatement expenditures and international assistance. Several recommendations on how to optimize the Baltic-wide programmes conclude the paper.

Valuing the commons: An international study on the recreational benefits of the Baltic Sea

The Baltic Sea provides benefits to all of the nine nations along its coastline, with some 85 million people living within the catchment area. Achieving improvements in water quality requires international cooperation. The likelihood of effective cooperation is known to depend on the distribution across countries of the benefits and costs of actions needed to improve water quality. In this paper, we estimate the benefits associated with recreational use of the Baltic Sea in current environmental conditions using a travel cost approach, based on data from a large, standardized survey of households in each of the 9 Baltic Sea states. Both the probability of engaging in recreation (participation) and the number of visits people make are modeled. A large variation in the number of trips and the extent of participation is found, along with large differences in current annual economic benefits from Baltic Sea recreation. The total annual recreation benefits are close to 15 billion EUR. Under a water quality improvement scenario, the proportional increases in benefits range from 7 to 18% of the current annual benefits across countries. Depending on how the costs of actions are distributed, this could imply difficulties in achieving more international cooperation to achieve such improvements.

Cost-effectiveness of air pollution abatement in Poland

The aim of the paper is to discuss the concept of cost-effectiveness of national air pollution abatement programmes, analyze it from a region-wide perspective, and outline a framework for integrating international and domestic environmental priorities. The paper refers to air protection policy priorities adopted by the government of Poland in 1990, and reviews policy instruments envisaged for their implementation. Additionally, it discusses international priorities and how the government of Poland attempts to address these in its policy.After defining cost-effectiveness, this paper reviews how the choice of policy instruments influences the costs of pollution control policy. Then, the recent Polish experience with charges, environmental funds, and transferable permits is confronted with the cost-effectiveness principles. The paper concludes that Poland has developed an extensive system of pollution fees which serves a revenue-raising purpose and gives modest incentives to abate, although the cost-effectiveness of this mechanism needs improvement. A potential role for transferable permits is emphasized.

Environmental Financing in European Economies in Transition

The paper offers a perspective on environmental predicament of economies in transition. Emphasis is put on how these economies finance their environmental needs. It is observed that the demand for environmental financing can be affected both by environmental policy measures (such as internalization of externalities) and by other factors (such as the softness of budget constraints faced by firms). The role of subsidies – in many countries of the Central and Eastern European region provided through special purpose ‘environmental funds’ – is then scrutinized. In particular the question is asked whether such funds crowd out commercial capital from the market. Conditions are discussed that would allow the funds to play their constructive environmental roles without crowding out private financing.

Economic and environmental effects of unilateral climate actions

Unilateral climate policy can be detrimental to global climate protection. Our objective is to provide insight into such a policy, to quantify the risk of carbon leakage, and to investigate the effects related to potential anti-leakage measures. We analyze existing definitions of carbon leakage and propose an alternative, rigorous one, which is different in three respects. The definition is then tested using computable general equilibrium analysis of the global economy and decomposition analysis. We identify a list of parameters that affect not only the magnitude but also the sign of the carbon leakage rate. Manipulating elasticities of substitution suggests that carbon leakage can be either positive or negative. Computable general equilibrium models, which are widely applied, including by the European Commission in this area, should be transparent, and their assumptions call for careful validation. We find that emission limits are properly distributed between sectors covered by the European Union Emissions Trading System and other sectors for the first commitment period (ended in 2012) but not for the second one (ending in 2020), where the target for the non-trading sectors should be reduced relative to the target for the trading sectors in order to equlize marginal abatement costs.

Pollution Taxes as a Source of Budgetary Revenues in Economies in Transition

Like other countries in Central and Eastern Europe, Poland has a mixed system of standards and environmental and resource taxes to address environmental problems. Through a series of rate increases, Poland’s pollution taxes are among the highest in the world and generate substantial revenue that is used to finance environmental improvements. A number of tax measures are also employed to encourage environmental investments, recycling, and consumption of “green” products.

Conservation of disappearing cultural landscape’s biodiversity: are people in Belarus willing to pay for wet grassland restoration?

Abandonment of traditional farming practices, such as hay-making and pasturing, has resulted in rapid loss of open wet grassland habitats in Europe. The globally threatened Aquatic Warbler (Acrocephalus paludicola L.) is a bird species that occurs almost exclusively in open fen mires, which have virtually disappeared in Western Europe, but still persist locally in Eastern Europe. Focusing on the world’s most important breeding site for Aquatic Warbler, the Zvaniec fen mire in Belarus, we estimated Belarusian citizens’ willingness-to-pay for adequate conservation management of this fen mire and its focal species the Aquatic Warbler. Results from a discrete choice experiment indicated that Belarusian citizens were willing to pay for appropriate conservation programmes of the Zvaniec fen mire. Scything and mechanical mowing were preferred compared to controlled burning, and especially over herbicide treatment of encroaching shrubs. Conservation management was preferred over legal protection of wetland areas without management. Respondents considered such passive conservation to be insufficient to maintain open fen mire habitat and gave a higher priority to active conservation management programmes. These preferences are consistent with evidence-based knowledge about what is effective conservation management for the Aquatic Warbler. Given the gradual disappearance of Europe’s traditional cultural landscapes, we discuss the challenge to fund the maintenance of this biocultural biodiversity legacy.