The Economics of Nutrient Pollution from Agriculture

Nutrient pollution from agricultural sources, coming primarily from fertilization of row crops and manure from livestock operations, affects ecological health in the United States through water and air pollution. We summarize data trends on commercial fertilizer use, manure, cropland, and concentrations of nitrogen and phosphorus in waterways. We present data indicating that fertilizer applications per acre of US cropland exhibit an upward trend, with a strong spatial correlation between agricultural intensification and nutrient contents in waterbodies. While biophysical science has advanced our understanding of how nutrient pollutants affect the functioning of physical ecosystems, economic research has quantified only some of the economic damages related to losses in ecosystem services due to nutrient pollution. Our summary of this work indicates that quantification is incomplete and does not yet provide full characterization of these damages across the country. We summarize key available damage estimates and the limited evidence on cost-effective policy design. We conclude by identifying important yet understudied areas, including a focus on contaminated drinking water sources, health damages from nutrient pollution, and the need for holistic estimates of the costs of the externalities from pollution, where new research efforts will greatly benefit society. Expected final online publication date for the Annual Review of Resource Economics, Volume 15 is October 2023. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.