مدل سازی زیستی اقتصادی بهبود کیفیت آب با استفاده از یک رویکرد پویا اعمال شده تعادل عمومی

An integrated bio-economic model is developed to assess the impacts of pollution reduction policies on water quality and the economy. Emission levels of economic activities to water are determined based on existing environmental accounts. These emission levels are built into a dynamic economic model for the Dutch economy and subsequently coupled to a national water quality model. The modular approach has the advantage that the impacts on the economy and water quality are evaluated simultaneously, but each within their own domain based on the appropriate scale and level of detail. The dynamic nature of the economic model allows us to also evaluate a derogated water policy as foreseen in the European Water Framework Directive. The indirect costs of different water quality improvement policy scenarios are at least as high as the direct costs related to investments in pollution abatement technology. The stricter the policy scenario, the more important the role of economic adjustment and restructuring mechanisms at the macro-economic level. Significant water quality improvements can be achieved through stringent domestic emission reductions. However, reaching water quality standards is highly dependent on water quality improvement policy in surrounding river basin countries and climate change. Highlights ► A dynamic model is presented to link water quality and economic activity. ► Impacts of emission policies on water quality and economic costs are evaluated. ► Water quality depends also on policies in neighbour countries and on climate change. ► Improved quality of water inflow is necessary to reach European targets downstream. ► Indirect costs of policies are at least as high as the direct abatement costs.

Methods of analysis to conduct economic evaluation of water policy interventions such as cost-effectiveness and cost–benefit analysis are often ad-hoc and based on a partial economic equilibrium analysis (Brouwer and Hofkes, 2008). The limited number of existing input–output and general equilibrium models addressing water policy issues focuses on the optimization of water resource allocation across different uses, mostly agriculture, or the wider economic impacts of different resource allocation rules (e.g. Strzepek et al., 2008, Van Heerden et al., 2008 and Velázquez, 2006). Cost–effectiveness analysis of water quality improvements typically focus on the direct cost of policy measures to reduce emission levels of water polluting substances such as nutrients and pesticides (e.g. Gren et al., 1997, Ribaudo et al., 2001, Schleiniger, 1999 and Van der Veeren and Lorenz, 2002). Studies addressing the impact of these emission reduction measures on water quality, and hence minimizing costs based on water quality objectives, are rare (e.g. Barton et al., 2008 and Brouwer and De Blois, 2008). In those cases where emission reduction levels are linked to a water quality model, the economic part consists at most of a partial equilibrium analysis. The only study attempting to estimate the total economic costs of emission reduction water policy scenarios using an applied general equilibrium (AGE) model we are aware of is the one by Brouwer et al. (2008). However, they use a static economic model, with no further details of the impact of the emission reduction scenarios on the national economy and its sectoral components in time. In this paper, we present the results of an extended dynamic AGE model coupled to a water quality model for the Netherlands. The main objective is to illustrate the use and usefulness of a coupled bio-economic model to simultaneously assess the impacts of water policy interventions on the national economy and water quality. The novelty of the model presented here is twofold. First, it is based on a dynamic representation of the (Dutch) economy. Second, the emission levels of nutrients (nitrogen N and phosphorus P) and a number of eco-toxic metals (cadmium Cd, copper Cu, nickel Ni and zinc Zn) associated with specific water polluting economic activities are linked to a spatially explicit water quality model, allowing us to assess the impact of changes in emission levels on water quality conditions in the main water systems in the country. Thus, we are able to dynamically trace the entire chain from economic activity to emissions to changes in water quality in different water systems and the other way around. More specifically, we test to what extent emission reduction policy scenarios, for instance in the context of the European Water Framework Directive (WFD), affect both the national economy and respect or exceed existing water quality standards measured in the Netherlands by a pollutant's maximum permissible concentration (MPC). The latter are based on eco-toxicological understanding of the risks of adding specific pollutants such as nutrients and metals to aquatic ecosystems (lakes, rivers etc.) and are fixed by the Dutch Environmental Assessment Agency. The effects of six different policy scenarios on the economy and water quality are assessed: a lenient scenario aiming to reduce 20% of emission levels in 2000 by 2015 when the environmental objectives of the WFD have to be achieved for the first time, a strict scenario aiming for a 50 percent emission reduction by 2015 compared to emission levels in 2000, and a ‘precautionary scenario’ where the necessary economic adaptation is determined by the necessary emission reduction to achieve the WFD water quality objectives in all water bodies. Both the lenient and strict scenarios are assessed using two different assumptions related to the influx of water pollution from neighboring countries. One where these levels remain as they currently are and one where it is assumed that water quality levels at the border are reduced by neighboring countries to MPC level as these neighboring countries too have to comply with the new environmental water quality objectives in the WFD. The Netherlands are part of the international river basins of the Rhine, Meuse and Scheldt, and as is typical for downstream transboundary basins, more than half of all the water pollution in Dutch waters is of foreign origin.1 The impacts of a sixth water policy scenario are also estimated. In this scenario reaching the stringent reduction level is delayed in time until 2027. This is a possibility provided in the WFD to delay reaching the environmental objectives in time, and the dynamic AGE model is especially suited to investigate the impacts of following this option. Finally, the impact of climate change on reaching water quality standards in Dutch water bodies is investigated. The remainder of this paper is organized as follows. Section 2 describes the integrated bio-economic modeling procedure. Section 3 addresses model calibration, while model results are presented in Section 4. Section 5 discusses the direct and indirect economic impacts of the investigated water quality improvement scenarios. Finally, Section 6 concludes.

In this paper, an integrated bio-economic model is presented, which has been developed to simultaneously assess the consequences of water quality improvement policy as foreseen for example in the European WFD on the economy and ecological status of the main river basins in the Netherlands. The novelty of the model presented here is found in the coupling of emission levels related to economic activities in a dynamic economic computable general equilibrium model to an existing national water quality model. This link to water quality modeling is missing in many existing modeling frameworks and allows for an integrated evaluation of different water policy scenarios in terms of their impact on existing water quality standards across different river basins and their direct and indirect economic costs and benefits at macro level. The existing standards are based on eco-toxicological understanding of the risks of adding specific pollutants such as nutrients and metals to aquatic ecosystems. The most important advantage of the modular approach used here is that the impacts on the economy and water quality are evaluated simultaneously, but each within their own domain based on the appropriate scale and level of detail. The dynamic nature of the economic model allows us to evaluate the flow of costs and benefits of water quality improvements in time and also assess a derogated water policy as foreseen in the WFD. This means that meeting the water quality objectives is delayed in time, by 2027 for instance instead of 2015. We show that the derogation only has a temporary effect on the state of the economy between 2010 and 2027, but once the emission reduction targets are fully implemented, the impacts are comparable to the scenario simulations when the water quality objectives are reached in 2015. At low emission reduction levels, economic agents have the opportunity to adjust to the new circumstances at relatively low costs, investing in low-cost pollution abatement technology. The impact of a lenient policy on water quality is, however, also very limited. A multilateral policy, where water quality flowing into the country at the border is improved in surrounding river basin countries to respect Dutch national water quality standards, helps to solve water quality problems in the Dutch river basins, but is insufficient to meet the maximum permissible concentration levels of all pollutants in all basins. The most important problems are found in the Rhine river basin and related to the polluting substances copper, nickel and nitrogen. Therefore, stricter water quality policies are required. We show that the stricter the policy scenario, the more important the role of economic adjustment and restructuring mechanisms at the macro-economic level, and hence the need for appropriate macro-economic models like the one presented in this paper. The indirect costs of different water quality improvement policy scenarios are at least as high as the direct costs related to investments in pollution abatement technology, and potentially much higher. An optimal mix arises from the trade-off between the implementation of technical measures, a restructuring of the economy and a temporary slowdown of economic growth, such as increasing short-term consumption at the expense of savings. Especially emission intensive sectors such as agriculture and a number of industrial sectors suffer from more stringent emission reduction scenarios. On the other hand, other sectors benefit from such more stringent emission reduction policies due to a reallocation of resources and substitution effects. A strict policy, either implemented unilaterally or multilaterally, will improve water quality for most pollutants and most water bodies, but even the strict multilateral scenario (a 50% reduction in total domestic emission levels and an inflow from abroad that does not exceed existing water quality standards) will not resolve all water pollution problems in the Netherlands. A precautionary scenario based on an estimation of the necessary emission reduction of substances to adhere to the existing maximum permissible concentration levels for all pollutants in all basins implies much higher economic costs. This is partly due to limited possibilities to implement metal emission abatement technology and the costly restructuring of economic activities required to achieve the water quality standards. Derogation of reaching the target by 2027 may lead to smaller economic effects in the short term, but are likely to only postpone the economic and water quality impacts of such a derogated policy. A preliminary analysis of the impact of climate change in these scenarios furthermore reveals that reaching the WFD objectives is likely to become even more difficult in the longer run. Climate change is expected to result in lower river discharges and higher pollution concentration levels. There are some obvious areas for improvement of the presented modeling framework. Most importantly, the feedback relationship between water quality levels, emission levels and the level of economic activities is currently still weak or even missing. The economic consequences of improved quality of the water flowing into the country are twofold. First, they may affect water purification efforts and hence result in cost savings in water intense sectors such as the drinking water sector and the food processing industry. These feedback mechanisms and relationships are currently not yet part of the economic model used in this study. Second, additional efforts to improve water quality abroad may reduce the necessary domestic efforts to reduce emission levels and are therefore likely to reduce the domestic economic costs of reaching the water quality objectives. However, in order to be able to assess how much emission levels would still have to be reduced to reach the water quality objectives under these circumstances would require a location specific analysis, linking water quality status for each individual water body to specific economic activities and their emission levels. It is also not possible yet to estimate the reduction in economic costs (cost savings) of pollution abatement measures when water quality at the borders flowing into the country reaches MPC levels. Ideally, both the economic costs abroad and the cost savings in the Netherlands are estimated in order to estimate the least cost way of reaching the water quality objectives in a transboundary river basin context. Work on such an international river basin model is underway.