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Abstract
In the paper we combine several analytical tools in search of an effective pesticide reduction instrument and an optimal application of such an instrument. The tools under consideration are a CGE model used for evaluating the cost and to calculate general economic and sectoral consequences. The CGE model is linked to an agricultural sector model calculating the optimal use of land and application of pesticides. The agricultural sector model is then linked to a biological agent based simulation model (ABM) calculating changes in the population of a key species of farmland bird, due to changes in production and landscape. The results from the agricultural sector model are also used in a Bayesian network evaluation of pesticide usage and the leaching of pesticides to ground water. In this combined model framework three scenarios are analyzed. All three scenarios are constructed such that they result in the same welfare implication (measured by national consumption in the CGE model). The scenarios are: 1) pesticide taxes resulting in a 25 percent overall reduction; 2) use of unsprayed field margins, resulting in the same welfare loss as in scenario 1; and finally 3) increased conversion to organic farming also resulting in the same welfare loss as in scenario 1. Biological and geological results from the first part of our analysis allow us to select the most costeffective instrument of those analysed for improving bio-diversity and securing drinking water. We proceed by including valuation studies of increased bio-diversity and secure water resources which thus contribute to a cost-benefit analysis. Furthermore, we address the question of optimal application of the selected instrument by calculation of the total abatement cost and benefit curves. From these curves we can then deduce the marginal benefit and cost curves, which allow us to determine the optimal instrument application. Results suggest that Denmark could benefit from adaptation of unsprayed field margins and further that the optimal application of such margins should exceeds 20 percent of the total agricultural area.