Epsilon Archive for Student Projects

Abstract

The Baltic Sea suffers from eutrophication, which is due to leaking soil and emissions from industries, sewage plants and the agricultural sector. Helcom, the Convention of Helsinki has stated that the abatement targets for phosphorus and nitrogen have still not been reached. Research has shown that mussel farming could function as an abatement technique at a low cost. The purpose of this paper is to estimate if mussel farming could function as an offset in mitigating eutrophication in the Baltic Sea. Additional, the purpose is also to estimate an uncertainty discount for mussel farming since the mussel has an uncertainty treatment capacity. The theoretical framework is a mathematical optimization model where the cost of the total abatement in the sea is minimized subject to the level of total abatement, which includes other abatement techniques plus the abatement level of mussel farming, should be equal or larger than the abatement requirement that is set for the country. The cost minimization problem is then solved by the Lagrange method. The result shows that Sweden and Germany would benefit when crediting mussels for nitrogen. For phosphorus, Sweden, Poland, Denmark, Germany and Lithuania would benefit from introducing mussel farming. When including the uncertainty factor the level of mussel farming decreases in all countries. In a scenario analysis the marginal cost of mussel farming were given weights of 0.5 for nitrogen and phosphorus respectively. The result showed that additional countries would benefit from introducing mussel farming as an offset.