Evaluating the efficiency of a N-input tax under different policy scenarios at different scales

Nitrate pollution from agriculture is an important environmental problem, caused by the excessive use of inorganic fertilizers. The internalization of this externality, via a tax on mineral nitrogen, could lead to a second best solution, reducing nitrate emissions. Several authors suggest that a reduction in agricultural support could produce similar results. In this paper we examine the effects of a nitrogen levy on nitrate pollution from agriculture in northern France under two different policy scenarios corresponding to (i) the Agenda 2000 and (ii) the Luxembourg reform of 2003, including the 2006 arrangement. The analysis aims at revealing what synergies or conflicts are created between a fertilizer levy and the policy scenarios, with respect to nitrate pollution mitigation. The applied methodology is based on the coupling of the economic model AROPAj with the crop model STICS. For each policy scenario, a nitrogen tax is simulated, involving different tax levels up to 100% the input price. Results reveal that at higher tax levels the reformed CAP can lead to slightly greater nitrate reductions than Agenda 2000, while the opposite applies when the tax is low. A down-scaling method is then used for the spatial distribution of the outputs, allowing for a more detailed representation of the nitrate abatement effects of the N-tax at different geographical levels.